Paul Jacobs offers a follow up to his piece earlier this month about marketing mistakes:
A while back I wrote a posting about how Diet Coke's market share has fallen and pointed out several lessons that broadcasters could learn from their experience. Here's another example from outside of our business that points out the cost of poor decisions.
Unilever has announced they were putting their laundry detergent business up for sale (remember Wisk?). This is noteworthy because a few decades ago, Unilever was locked in a pitched battle against Procter & Gamble (Tide, etc.) for supremacy in this highly profitable category. Hundreds of millions of dollars in advertising and marketing were spent - this category is extremely important to both companies because of the huge profit margins involved and the proceeds go to invest in new products and increasing market share.
- P&G aggressively conducts research and isn't afraid to innovate. They were one of the first believers in ethnography, where consumers are viewed using the product in their natural environs. They knew that data was valuable, but there's no substitute for observing consumer behavior. While P&G researchers were watching consumers wash their underwear in their basements, the article notes that "Unilever executives hadn't been in a laundry room for years," and in an interview in 1999, their President was quoted as saying, "That would never happen here."
He doesn't have to worry about that any more. Of course, he probably has someone else wash his underwear.
As we learned while conducting "The Bedroom Project" ethnographic study for Arbitron, observing consumers in a natural setting interacting with and talking about a product is incredibly valuable, and something radio needs to do more of. The mystery behind why radio listeners do what they do can be found simply by observing behavior and following up with key questions.
- P&G played hardball. Last year, P&G spent $218 million marketing their laundry brands compared with $25 million for Unilever. They swamped them. In radio, we're trying to defend ourselves with shrinking promotion budgets while Apple spends hundreds of millions to market iPods and iPhones and Sirius and XM spend even more marketing satellite radio. Why are we surprised to learn that usage of these products are cutting into time spent listening to radio?
Some of the solutions for radio's challenges are out there. We can learn from other's mistakes. And mistake number one is, "Don't become Unilever."
You can see both "Bedroom Project" presentations at the NAB/R&R Conventions in Charlotte this September. Conceived by Arbitron and conducted by Jacobs Media, "The Bedroom Project" is an ethnography study about media, technology, and survey research. The presentations are Wednesday afternoon at 3:45 at the NAB; Thursday afternoon at Jacobs Summit 12.