Marketing Begins At Home

Doom and gloom or a business opportunity?

House prices are down 1% from April 2007 according to a BBC story. That doesn't sound like a lot to me. The fact that house prices have been rising for four of the last five years is buried in the story. So now instead of being 10% above last year, they are now 1% below last year. But the graph looks much more dramatic.

It does say something that the BBC, on the whole known for balanced reporting, is using language like "sixth monthly decline in a row" and "steep decline". This is after property prices have RISEN 45% in the last 5 years.

So we are talking ourselves into a significant drop in house prices. The question really is - who is going to be really hurt? Anyone who has bought recently and not benefited from the rises. Anyone who remortgaged and spent the cash and now is sitting on a possible deficit. First time buyers because cheap and easy 100% mortgages have disappeared in the UK.

Well, first time buyers are going to be hit, but previously they were being squeezed out because prices were much too high a multiple of their earnings. Now they need a decent deposit to get a mortgage. Well, that doesn't seem unreasonable to me.

There is definitely a market opportunity here for housing that is affordable, and properly targetted at the people who are having difficulty getting on the housing ladder. Perhaps a mixture of owners and renters in professionally mainted properties with proper ongoing funding for maintenance. More commonhold properties would be a good idea. Why haven't we seen more of this in the UK. Well one important reason is that it eliminates ground rent as a source of income for developers and other sources of income from premiums for extending leases, etc. Perhaps a tax break to help encourage this important and cost effective type of housing?

Brainwave that made elevators safe

Elevators (lifts) are complex devices. But the fundamental safety device is incredibly simple. Electromagnetic brakes are held open while there is electric current. In the event of an electricity failure, the brakes are released and the elevator comes to a stop. What a great idea. Simple, positive. I love the thought that the absence of electricity triggers the safety mechanism. Its the inverse of what one might expect. Elisha Otis patented it and created the "safety elevator". How might thinking about the inverse of something create a new product or business opportunity today?

Where's the garage?

Nice story about how the people at HP have restored the house and garage where the company was founded.

But where will the young European entrepreneurs of tomorrow go to do their startup? More and more people are living in smaller and smaller spaces. No room for hobbies, no room for experiments, no room for starting companies.

As I recently found out, even the smallest office in a central city location seems astronomically expensive and has all kinds of strings and limitations.

Is this one of the reasons that European innovation has to come from institutions not individuals?

A new career as a groqiteer?

The groquit allows you to scan all your stuff, so when you go shopping you can check and make sure you don't have whatever you are thinking of buying. Oh dear.

For $95 you can have a device and run around scanning your cds, dvds, books, etc etc and then see if there is a match for your barcode when you get ready to hand over your mastercard in the shop.

My problem with this is that the amount of effort to get all the data into the device isn't worth it. Its a solution looking for a problem. And in most civilised countries all you have to do once you realise you have purchased a duplicate is take it back. Most retailers are very cooperative that way. After all its no skin off their nose. The manufacturer usually pays.

So would I groquit? (rhymes with rocket apparently) Thanks, but even if I lose my job I can't imagine putting the effort in to scanning my collections. I'd rather rely on my fallible memory - and the good will of my favourite retailer.

Great marketing absorbs place and time

Over the weekend I went to an exhibition at Tate Britain of pictures by Peter Doig.

This is one example, called Blotter. Peter Doig says that "The title refers to (amongst other things) the notion of one's being absorbed into a place or landscape, and to the process through which the painting developed: soaking paint into the canvas."

It was a fascinating experience because the paintings evoked real nostalgia for Canada in me. Peter Doig was born in the UK, and spent significant time growing up in Canada. The paintings were mostly done while he was resident in the UK and some done in Trinidad where he now lives.

Blotter is fairly easy for anyone to deconstruct but most of his paintings do have enormous extra resonance for anyone who has lived in Central Canada. The subjects, the detail, the use of reflection on water all provoked  intense reactions from my wife and myself. I doubt that they will achieve the same effect for anyone who has not spent a lot of time there. It's that extra resonance that great marketing achieves and does evoke time and place. How about the iconic volkswagen print ads? The Apple 1984 TV ad? Everyone can relate to them, but they have an especially powerful effect on people who remember the original context.

How old is your airplane?

American Airlines apparently has jets with an average age of 18 years old. Now given that they get maintained and rebuilt a bunch of time during their career, does the age of your airplane matter?

An interesting coalition of groups including the Teamsters and the Business Travel Coalition, have a real bee in their bonnet about where aircraft are maintained. They don't seem to like the fact that it is being done in Korea. Now I understand that the Teamsters worry more about domestic jobs, but why would people who represent corporate travel departments care? After all, many of their companies are busy outsourcing large chunks of work to low cost environments.

We seem to have great difficulty understanding that  price does have an effect and that services do cost money. In this case, how much was paid for the ticket and how old is your airplane are related. I find this ironic - after all my corporate travel policy forces me to choose these carriers. They do so because the "discount" price they get off the "retail" fare means that I get to pay more as an individual when I fly so that the corporate travel folk can save money. But now they are surprised when the airlines do what they can to squeeze cost out of the equation so that they can offer "discounts" to "corporate customers".

But will it change our behaviour, let alone those of our corporate travel departments? Or in fact are we behaving like rational economic animals. After all, technical failure is only responsible for 20% of accidents and only 37.28% of accidents are commercial flights. 2007 was one of the safest years on record.

So if you are of nervous disposition - fly in Europe, fly on a jet. North America accounts for 32% of crashes. Hmm. Maybe the Teamsters have something after all.

Why Apple won't worry about iphone clones

Right now a lot of mobile phone companies are trying to design a competitor for iphone. So they are either looking at making it cheaper, faster, more features, bigger camera, bigger memory, bigger storage. Whatever. They might even make a better iphone.

They're missing the fact that they can't overcome Apple's position. OK, Apple might not have hit every feature right on the head when they launched the iphone, but competitors aren't going to be successful with incremental steps. That's because Apple has won the position in the minds of consumers for their phone. Not everyone will buy one, but everyone knows what it is. And they know that the future versions of iphone will contain the incremental steps. So most of them will buy another iphone, and convert more friends as well.

So what is the mobile phone company to do? Easy. Do what Apple did. Pick a consumer segment, meet and delight it, and you have something. Just one example - the way that the iphone screen flips from vertical to horizontal. Cool, practical, intuitive all in one. The little gizmo that is inside the iphone that does this has been available for some time. I remember getting pitched by the company that makes it. I thought it was cool but too expensive for the products we were thinking of making. I still think I was right, but I missed what the Apple team didn't. Combined with a touch screen, fast software and a good operating system it works like a dream. Apple probably weren't the first company to see the pitch. But they "got" it and made it core to the iphone.

So to be truly successful and gain a clear position, you have to have a great exploring technology mind combined with a clear focus on how to deliver to consumers. It doesn't get done by committees. It does get done by small teams with both great technology awareness and consumer focus. And that's not easy to do. The best their competitors can hope for is that Apple trips itself up. Or go and really think about what consumers want from technology.

Look Ma, no tip!

5 An intriguing new restaurant called Baggers has opened in Germany. You order your food using a touch screen, the order is picked up and cooked in the kitchen upstairs, then the food is automatically sent to your seat using technology.  The presenter makes a big deal about not having to leave a tip, even though on continental Europe it is not the custom to leave a tip.

What it doesn't show is how the mess left by the diners is cleared. The idea has novelty but does it have longetivity?

Perhaps a better example of how to innovate in the restaurant business is Benihana. The marketing for the chain calls it luxury dining. Well, if you haven't been, here is what happens. You arrive, and they stack you in in the bar until a full table has been assembled from arrivals. Then you get to share a table with a group of strangers. Benihana make it attractive by creating a show with a chef while your fast food is cooked and delivered across the griddle to your plate. Then once the show is over and you have your food, the chef cleans up and leaves. This helps to push you out the door so they can do it all over again. If the preceding paragraph makes you think me unduly negative, then try it for yourself. It is a great entertainment concept with a bit of easy to prepare, fast food attached, at premium prices.

My quibble is with the positioning. Just don't believe either of them when they tell you that they offer luxury dining. They are good entertainment experiences with food attached. Why mess with that?

Which brand gets burned by Olympic flame protests?

The last two days have seen protests in both the UK and France during the ceremonial passage of the Olympic Flame. But whose brand will get most affected?

The one the protesters hope for is the China brand. Will it be badly enough affected by negative publicity to change the way in which the world views the Beijing Olympics? Does any of this rub off on current sponsors of the Beijing Olympics.

But there are other brands at stake here as well. There's the London 2012 Olympics and the impact on potential sponsors. Right now there are just two of eight possible sponsors signed up with clothing and homeware, sportswear, airline, automotive, telecoms, and oil and gas still available. The two committed sponsors are EDF and Lloyds TSB.   

There's the British and French national brands which may be affected by their ability. Locally, the British police haven't come off too well. The friendly bobby reputation isn't helped by TV pictures of yellowjackets throwing people to the ground.

And what about the personal brand of Gordon Brown? Will his reputation for dithering be bolstered by his attitude towards Beijing? He greeted the torch in Fortress Downing Street, but refused to actually touch the torch, as pointed out by the TV commentary.

What does the Olympic flame stand for now? But haven't the protesters neglected history? The symbolic and memorable protests were the ones at the games by the participants. Jesse Owens walking away with a fistful of golds in the Aryan nation; black power salutes by American athletes in 1968. Who remembers that the torch relay was first instituted ahead of the 1936 Summer Games in Berlin by Hitler to bolster the links between Germany and Ancient Greece?

Trust and Baggage Handling

A post entitled "No One Trusts Bloggers" led me to think about how trust needs to be built over time.

I subscribe to technologyevangelist.com and, because I read the contents regularly, I have built trust in the author. I subscribe to Time, The Economist, The Week and MarketingSherpa. Now, none of these are perfect, and I don't always agree. I understand where they are coming from, and what the likely slant that they might take. Time gives me a great snapshot of mainstream opinion in America, while the Economist gives a better European slant.

Both trust and understanding are built over time. There isn't a short cut. And when trust is broken, as with Heathrow's T5, it will take a long time to overcome. One of the core promises for T5 was better baggage handling. In the long term that will probably be true. But the passengers who are inconvenienced by being separated from their bags and those whose flights are cancelled won't care. And I will do my utmost to avoid T5 and BA until they have proved they have it under control.