On the relationship between honesty, towels, and trees

Being honest with your customers

Very often people associate marketing with dishonesty, cheating, or twisting the truth and, let’s be honest, they sometimes have a point. As a consumer I personally prefer to be told truth in the face. As a marketeer I know it is not always easy. But we can at least try our best… A glaring example in this aspect are the signs in hotel bathrooms:“ Do you know how many detergents are used every day in the world…reuse your towel…throw it on the floor if you want it changed…environment will thank you.” Come on, guys, why don’t you just tell me that you spend a load of money on washing expenses and you want to minimize expenses??? Would it not be fairer if you tell me: Look, Mr. X., you can save us 20 cents per towel if you reuse it. Why don’t you do just that, and tell us where to put the saved money – environment, homeless children, wildlife preservation fund, or the hungry people in Somalia. Then I would feel much better knowing that I have been recognized as an intelligent human being, and that I have contributed somehow to a noble cause. The hotel, on its side, will have built a great reputation for honesty in my eyes.

It seems that some hotel chains are actually going in this direction, even though stopping short of telling the whole truth. Novotel (an Accor chain) started telling guests that a tree will be planted for every 5 towels they reuse, thereby implying that there were savings to be made by reusing towels and yet cleverly connecting it to environment. Good job, Accor – I wish more hotels were to follow your example!

Private labels in Eastern Europe

Euromonitor International, a major player in market analysis and data collection, has a very nice section on podcasts to which I often listen. They recently had an interesting podcast on private labels in Eastern Europe (see here http://euromonitor.libsyn.com/private-label-in-eastern-europe). In a few words, while private labels penetration in Eastern Europe is still way below the Western Europe average (the most developed private label market Czechia has 12 % from total turnover with private labels, while average for Western Europe is 16 %), the trend is towards rising private labels penetration, especially in areas like homecare, foods, etc. The podcast also discusses how established brands are fighting this trend via promotions, more aggressive advertising, etc. There is no discussion, however, of the reasons for this development from a branding point of view.

On one hand, most Eastern European markets are very price sensitive, the extreme examples being markets like Hungary and Romania. This means that private labels, being normally cheaper, have a good chance there. On the other hand, many “normal” brands which are established in the West are virtually unknown in the East and will have to invest a lot to promote their products. For example, not many people know the cheeses of Bel Fromageries in Romania or Bulgaria as more local products are consumed. And we come here to the question in investing trust in brands. Eastern European consumers for historical reasons are more distrustful to promises, including brand ones. There is that “they only want to cheat me” feeling in many consumers. People select carefully whom to trust and where to spend their money. And, as the big retailers like Metro, Billa, Carrefour, IKEA, etc. were one of the first to risk and invest in Eastern Europe, they have accumulated a significant amount of goodwill with consumers. This is why I believe that this trust can be easily transferred to private label products by these retailers. This could be easier where generic products like food, homecare, etc. are concerned and more difficult in others, but there is no reason to doubt that by 2020 the levels of private level penetration in Eastern Europe will be equal or even higher than those in Western Europe.

The Ten Marketing Commandments For Central And Eastern Europe

I have thought long and well before starting this blog. After all, there are so many blogs dedicated to the juicy topic of marketing. I will, however, try to concentrate on another aspect of marketing. Firstly, I will try to cover topics that concern marketing from a regional point of view as there are many companies which run a regional marketing setup. Secondly, I will concentrate on the broad region of Central and Eastern Europe (CEE). And lastly, I will try to pay more attention on the funny side of marketing and how to avoid situations where everybody says: I told you not to trust the idiots from marketing – they made complete asses of themselves again and that is why we cannot make any sales…

So let me kick off my first blog with the listing of the Ten Marketing Commandments to be followed by all righteous marketers in CEE. After all, Marketing is a kind of religion with its rituals and prophets (Mr. Kotler, anybody?)

THE TEN MARKETING COMMANDMENTS IN CEE

(in no particular order)

1. Know thy region

This is especially true if you come from the "civilized" world of New York, London, Paris, or Amsterdam. Bulgaria is not at all similar to Burma, regardless of the fact that they are next to each other in the world atlas. Believe it or not but I did know a boss who asked his assistant to book a flight between Vienna and Bratislava (about 45 kilometers distance as the crow flies). And many are those who still mix Slovakia with Slovenia, and Latvia with Lithuania. Therefore it would not hurt to read about the region's geography, history, and culture.

2. Check first, trust second

You will find many (very charming) people who will try to sell you anything. It would not hurt to be extra careful before signing any commitment. This is where a good legal advice would be very handy. But you are already doing that, are you not?

3. Plan for extra time

As a matter of principle it never hurts to budget a couple of more months, especially for bigger projects and campaigns, but this is especially true for CEE, You have to budget for unforeseen delays caused by holidays, slower transport, bureaucracy, legal requirements etc. Just as an example, a promotional campaign can be significantly delayed or even stopped when you learn in the last minute that you have to pay 40 % income tax on all those nice gifts you are giving (as it is the case in Hungary).

4. Be very careful when deploying centralized solutions

I know of many big companies which have made the “copy-paste” mistake without even checking on the consequences. A classic example is the Philips campaign in the 1990s in Bulgaria. In this campaign the slogan “Quality that not everybody can afford” offended many of the poorer potential customers and had to be stopped. Also, a campaign developed for Russia will likely not work very well in Czech Republic or Hungary even only because of the history of the past 70 years. You may therefore have to choose between a very generic message which is cheap to produce and distribute, or a specific one that can work well per country. My personal preference is to cluster countries in terms of proximity, market similarity, languages, etc. Nevertheless, using the same message for both Romania and Bulgaria (which, after all, are both Balkans countries) may not work at all. Simply make your research first before making the clustering.

5. Do not make quick assumptions

Base your actions on facts and research, not on gut feeling. The fact that people live in poorer countries does not mean that your target group is necessarily poor, and cutting the price (or playing with the package size) is your only option. You will often find that people are willing to invest more money that you expect, and that quality is more important to them than other attributes.

6. Branding rules!

Invest time and efforts to develop your brand into one people trust. Stress on your traditions (if you have them) as people in the CEE have seen even some bigger Western brands come and go to invest in the more lucrative pastures of the BRICAs. And finally, do not claim that your product or service is something it is not. People can buy it once but in principle be prepared for a bit more suspicious attitude than in the West.

7. Careful with that media plan!

Media agencies in CEE do tend to sell you media plans which include some not very logical media choices for your product. Normally you will find that the said media agency has some better conditions with these media. It therefore makes sense to double check and challenge every suggested plan. I would actually even recommend going directly to selected media when your budget is limited. This will not only increase your discounts but will also allow you to find the best and most focused investment in your target audience.

8. Stress on frequency, not reach

Of course, your actual strategy will depend very much on your product and budget but I have generally found that stressing on frequency rather than reach brings better results. This is, of course, based on the assumption that your message and execution are good. In principle media noise in CEE can be greater than in Western Europe because of lack of regulation (e.g. number of billboards is much greater), early stage of media market development, willingness of people to try new media etc. It does make sense then to bring your message with a greater frequency to a small but loyal group of customers who can spread word of mouth about your product or service.

9. Go for regional media

There are many media channels or groups which operate on regional level. There are also surprisingly little customers who actually make use of this. Getting into touch with the headquarters of companies like Discovery, Eurosport, RTL, etc. can bring you an additional discount of 15-20 % compared to local media planning.

10. Bigger is not better

And finally, do check also smaller local agencies, even if your parent company has a world contract with one of the behemoths. You will find that some local agencies are not also cheaper but also more creative, more flexible, faster, and more correct in their relationships.

It will be awesome to also get the point of view of other marketing people on these commandments. Who knows, maybe we can extend them to 15 or 20…