cutting edge: our weekly analysis of marketing newstechnology-savvy millennials. havas media group...

1

Don’t forget, reading this publication can

count towards your annual CPD record.

www.cim.co.uk/charteredcpd

Cutting Edge: Our weekly analysis of marketing news

28 January 2015

Welcome to our weekly analysis of the most useful marketing news for CIM and CAM members.

Quick links to sections

Marketing trends and issues

Advertising Adspend slows but room for optimism

Last week we reported on the latest Bellwether report (21 January) which revealed a slowdown in

fourth quarter growth for marketing budgets. The IPA report, a quarterly survey of senior marketers,

revealed that 6.1% of companies registered an

increase in budgets for the fourth quarter, down from 12.6% who did so in the third quarter. It noted

that the level of optimism has also fallen. The Advertising Association and Warc have forecast that

UK adspend for 2015 will grow by 5.7%, down from the 6.5% which was forecast last year. CEO of WPP,

Sir Martin Sorrell, has warned companies not to “cut

their way to growth”. Bellwether and AA/Warc attribute the figures to the uncertain political climate

leading up to the UK General Election. But analysts remain upbeat and say there are grounds for

optimism.

Marketing Week, 22 January 2015, p6

Ambient advertising

Advertising clutter has meant that traditional

advertising is becoming less effective in gaining an audience’s attention. One way of addressing this is

through ambient advertising which uses the physical surroundings as a medium. This research draws on

literature to investigate drivers of ambient

advertising effectiveness. A conceptual framework is developed to help gain an understanding of how

ambient advertising can be undertaken effectively. The authors use scheme congruity theory to shed

light on various factors: creativity, unexpectedness,

engagement and subtlety, as well as long-term sales.

Journal of Marketing Communications, Vol 21(1) January 2015, pp48-64 (Jurca and Madlberger)

Agencies Addressing the luxury sector

Luxury brands have been struggling with the digital revolution and adapting to the attitudes of

technology-savvy Millennials. Havas Media Group has launched the LuxHub global luxury marketing

consultancy. First set up in Milan in 2012, it will be present in London, Paris, New York and Dubai

before expanding into other countries. Global leader

for the project, Isabelle Harvie-Watt, believes that many luxury brands need help with digital while

many of them have “rarely engaged in marketing”; Chanel, for example, has restricted its digital

presence in order to maintain exclusivity. Many

luxury brands will have to catch up with the likes of Burberry, which has already adapted to the digital

environment. Another line of business for the new consultancy will be mainstream brands, such as

Heineken’s Affligen beer, who want to enter the luxury arena. Other agencies, including Leo Burnett

and McCann, also have specialist luxury businesses.

Campaign, 23 January 2015, p23

Brands and branding Recalls, brand commitment and purchase This study investigates how product recalls affect

brand commitment and post-recall purchase

intentions. The paper proposes four types of consumers based on their levels of commitment -

Hard Cores, Don’t-Cares, Lovers and Rationalists - and reveals the different effects of product recalls

on the commitment of these groups. The

information is intended to help brand managers to develop post-product recall consumer management

strategies.

Journal of Consumer Marketing, Vol 32(1) 2015, pp1-14 (Byun and Dass)

http://www.cim.co.uk/charteredcpd


© Copyright 2015 CIM 2

Conferences and events The big spenders this year

C&IT takes a look at the sectors which are likely to be the biggest spenders on events over the coming

year. It is not surprising that automotive, which has

experienced a significant upturn in its fortunes, should be included among these. Jaguar Land Rover

is among those who will be big spenders. New technology, green and hybrid models are presenting

further opportunities. Other sectors which are

looking good in event terms are: financial, retail, pharmaceutical and healthcare. New opportunities,

notably in social and digital media, are also identified. The construction industry, biotechnology

and nanotechnology are highlighted as areas to watch.

Conference & Incentive Travel, January-February 2015, pp18-19

Marketing to mums

On 18 March Mumsnet is holding its second annual

conference, Mumsnet 15. It will present the latest research conducted among British mums about the

roles they play in their families’ lives. The conference will reveal eight ‘emotional roles’ to

attendees and will also look at how brands can use

this knowledge to connect with mums. Delegates will receive insights into some of the campaigns and

‘most-loved’ brands aimed at mothers. Marketers from Google, Lego and O2 are amongst those lined

up to speak at the one-day event.

eventmagazine.co.uk, 26 January 2015

Consumer behaviour Scenting consumer power and preference Companies are embarking on an era of sensory

marketing in which all five consumer senses are targeted to create a multisensory experience.

Companies have been investing heavily in scent

marketing and are emitting specially-designed ambient scents into service environments such as

stores (Jimmy Choo), hotels (Sheraton Marriott) and banks (Credit Suisse). In this article the authors

examine how ambient scents impact consumers’

spatial perceptions in the retail environment and how this affects their feelings of power, product

preference and purchasing behaviour. They show that in a warm-scented (compared with cool-

scented) environment people feel a greater need for power which leads to a preference for and purchase

of premium brands and products.

Journal of Marketing, Vol 79(1) 2015, pp83-96 (Madzharov et al)

When small actions are big

The Small Big: small changes that spark big influence is a book by academics Steve Martin, Noah

Goldstein and Robert Cialdini (author of Influence: the psychology of persuasion). In it they argue that

small changes requiring small investment can lead to

big changes in customer behaviour. The book covers the latest research from around the world and then

uses it to suggest actionable techniques with which to influence others. In this article Martin and Cialdini

discuss their ideas and offer some examples.

Impact, January 2015, pp56-58

Customer relations Strategic account relationships This article explains how Deutsche Post DHL forms

strategic relationships with its customers through the appointment of executive sponsors. Each of

these is carefully chosen and paired with a strategic

account with the objective of building long-term customer relationships, understanding customer

needs and giving high-level support to DHL’s global customer managers. The author examines the ways

in which DHL meets its goals and explores one

particular executive sponsorship relationship by describing 12 stages in the relationship.

Velocity, Vol 17(1) 2015, pp13-16 (Meahl)

Direct marketing Making e-mail more social Despite the explosion in social media, e-mail is still

top of the pile when it comes to online activity,

customer acquisition and ROI. But, rather than opting for just one channel, why not combine e-mail

and social media? E-mail is both highly targeted and easy to test; around 94% of online users read or

send e-mail while three-quarters of adults say that it

is still their preferred marketing medium. But social media, used in conjunction with e-mail, can provide

a much bigger audience which makes the campaign more effective. One way of synchronising the two is

to include ‘share-to-social’ buttons within the e-mail.

Five experts offer their ideas on the e-mail-social media tie-up.

Database Marketing, January 2015, pp24-27

Law Celebrity public image rights Celebrities’ right to control their public image has

been reinforced in the case of Rhianna vs Topshop.

The UK’s court of appeal has ruled that Topshop’s use of Rhianna’s image on T-shirts, which it has

been selling without her authorisation, equates to “passing off” or illegally exploiting an unregistered

trademark. This ruling will provide more ammunition

for famous people to limit the ways in which their stardom can be commercially exploited. In future

retailers will have to be careful about how they use people’s images.

The Guardian, 23 January 2015, p7

European patents can apply to Morocco

From 1 March it will be possible to validate a European patent in Morocco once it has been

granted. Anyone filing a European patent application can apply for validation and receive the same



benefits as a Moroccan patent. Morocco will be the 41st country in which a European patent can be

validated and the first country in Africa where this is possible. The initiative should provide economic

benefits to the country as well as increasing its

attractiveness to foreign investors.

lexology.com, 23 January 2015

Marketing Creating quality content

Content marketing is on the increase which means that marketers are having to write more. Words can

be very powerful so they need to be used with care

and to the writer’s advantage. Here the author goes back to the basics of good writing. For example, if

you don’t know where to start, then make a note of the objective and think about what the most

interesting or exciting part of the story is. She gives

some tips for plan and structure, covers common errors and talks about what to do after the piece is

written, including proofing and the importance of typography. Reference is made to George Orwell’s

six writing rules.

B2B Marketing, January 2015, pp34-35 (Marshall)

Making marketers stand out

Successful managers used to be those who fitted in;

now they are the ones who stand out and make their organisations stand out as well. Here the

authors ask how marketers and marketing can stand out and exert influence over executive strategy-

making and decision-making processes. The article

covers the challenges facing the senior executive team; the new breed of manager who is a customer

champion; and the implications for marketers who want more influence over skills, knowledge and

behaviours. Implications and next steps for marketers are also discussed.

Cambridge Marketing Review, Issue 9 2014, pp10-13 (Fifield and Greenhough)

Evaluating marketing channels

E-commerce and micro-segmentation of consumer

groups have led to the adopting of multi-channel distribution systems by many manufacturers. This

has meant that marketing managers have to deal with complex issues including marketing channel

evaluation. The authors propose a decision-making

framework for multi-channel evaluation using a model which is tested with Cisco China. The

management at Cisco found the model to be transparent, logical and practical as well as

providing a reliable guide for evaluating channel choices.

Industrial Marketing Management, Vol 43(8) 2014, pp1420-1434 (Chen et al)

Ethical marketing

Using ethics in marketing has many advantages

including giving consumers an additional reason to

feel good about the brand. But ethical marketing is difficult and a company’s claims can be questioned:

it could end up facing a court case, a Twitterstorm or other problems. Café Nero, for example, tripped

up over its corporation tax after founder Gerry Ford

had claimed that its tax dealings would be “exemplary”. In fact the most common error in

ethical marketing is not being quite what you claim to be. This article looks at what can go wrong and

how messages should be framed in global markets. An interview with Fairtrade brand Pukka Herbs co-

owner Tim Westwell is included.

The Marketer, January-February 2015, pp33-36

Public relations Effect of inoculation on negative comments The authors examine how negative, user-generated content on Facebook influences stakeholders’ perceptions of the organisation. The research was conducted in two stages using the theory of inoculation to protect against changes in attitude following exposure to negative comments. Phase one covered stakeholders’ perceptions about the organisation: public relationship, corporate social responsibility, attitude and reputation. During phase two participants were exposed to negative Facebook comments. The authors conclude that the use of inoculation can help to protect against shifts in attitude. Communications professionals should be aware of the effect of negative posts and develop a strategy to respond accordingly.

Corporate Communications: An International Journal, Vol 20(1) 2015, pp63-75 (Haigh and Wigley)

Leadership and communication

The author, a partner at PR agency Ketchum, looks at the relationship between leadership and

communication. He discusses the nature of

leadership with reference to reports, conferences and research, such as Deloitte’s 2014 study which

found that more than 60 percent of all companies cited "leadership gaps” as their top business

challenge. He goes on to identify eight factors to maximise the opportunity for leadership and culture

in an organisation. These include the idea that

leadership communication will be more “feminine” and that you should treat your employees as you

would want people to treat your brand or organisation.

Public Relations Strategist, Vol 20(4) 2014, pp6-8 (Cartwright)

Sponsorship Fifa – kicked out by top sponsors Fifa, football’s world governing body, has lost three

more of its biggest sponsors: Castrol, Continental and Johnson & Johnson - following Sony and

Emirates. The loss of five big brands will be a blow

to the body, which earns around £1 billion from its commercial partners every year. Out of the five only

Sony appears to have expressed concerns about the



allegations surrounding the next two World Cups. New Fifa Now, a campaign aimed at reforming Fifa,

has been contacting Fifa sponsors to elicit their support. New Fifa Now co-founder, chairman of

sportswear manufacturer Skins, has announced that

Skins will be Fifa’s first “official non-sponsor”!

The Daily Telegraph, 23 January 2015, ppS1-3

Italian clubs becoming more commercial

Italian football clubs are struggling to make profits. Although plenty of finance derives from television,

with broadcasters paying huge amounts to screen football matches, the clubs are failing to exploit

other sources of revenue such as renting out their

VIP boxes, promoting hospitality packages or selling merchandise to fans. But times are changing and

Roma football club has entered into a ten-year kit sponsorship deal with Nike. It is expected that more

Italian football teams will soon be acquiring foreign investors.

The Economist, 24 January 2015, p62

Agriculture, fishing and forestry Cubic farming

Urban Barns, a Canadian food producer, has been

developing “cubic farming” which has the potential to grow 500 lettuces in one square foot of space. It

grows the plants by circulating water and nutrients around cube-shaped frames with LED lights to

provide the light needed. The yield is greater than

that from traditional agriculture and there is the potential for the technology to be used in retailers’

storerooms so that they will be growing the produce in the same place as it is sold.

Retail Week, 23 January 2015, p35

Dairy farms – milk cheaper than water? Morrisons has signed a three-year deal to continue

receiving fresh milk from Dairy Crest but volumes

are due to be reduced by a third from March. Britain’s dairy industry is struggling due to global

pricing pressures, rising animal feed bills, supermarket price wars and Russian sanctions.

Meurig Raymond, president of the National Farmers’ Union, warns that farmers are fighting to survive

now that milk has become cheaper than bottled

water. Supermarkets Morrisons and Sainsbury’s have been defending their actions. There were 35,000

dairy farms in the UK in 1995 but now there are just 13,000.

The Times, 21 January 2015, p43; Financial Times, 21 January 2015, p3

Building industry Spotting a property bubble

The author examines how booming real estate

prices are leading to concerns that there will be a

property bubble. He considers how you can identify a bubble from a boom in the context of real estate

prices in Dubai where residential prices have risen by 77% from June 2011 to June 2014. He also looks

at factors that drive the increase in demand and

supply side of the market and considers some questions relating to the demand for space and a

rush to development.

Business Strategy Review, Vol 25(4) 2014, pp22-25 (Cocco)

Balfour Beatty still calculating losses UK construction group Balfour Beatty has sustained

substantial losses of nearly £250m although the final extent of its losses has yet to be announced. In

September the company, which issued its fifth profit

warning in under two years, hired KPMG to undertake a review into around 25 problem

contracts around the UK. One of the company’s most prominent cost overruns is the Olympic

Stadium in east London where it is undertaking a

£154m conversion. Analysts believe that Balfour Beatty could become a takeover target.

The Times, 22 January 2015, p43

Vertical forest replaces glass High rise development tends to lack green

vegetation. However architect Stefano Boeri has found a solution: his Milan Bosco Verticale (“vertical

forest”) apartment complex is home to 900 trees.

Boeri says that 96% of the tallest buildings constructed in the last ten years are covered in glass

but he wanted to create something more organic. The trees and plants in his development help to

absorb sunlight, filter pollution and protect the

building. As well as human inhabitants, the building has attracted bats and a falcon!

Wired, February 2015, pp82-83

Retail affected by changing consumer habits Retail construction is being influenced by changes in

consumer habits. Tesco has recently abandoned plans to build 49 of its larger stores and is to close

43 existing stores. Sainsbury’s and Morrisons are

also both cutting back. This trend reflects changing shopping habits and the rise of the discounters.

These factors are affecting the retail construction pipeline and demonstrate the changing nature of

retail construction. Some big retail players will focus on the construction of new convenience stores to

boost market share. The growth in online shopping

will also have an impact on demand for dark stores.

Construction News, 23 January 2015, pp34-35

Businesses and strategy Aligning CSR programmes

Many companies practice CSR initiatives that are varied and uncoordinated. These can range from

philanthropy to environmental programmes and are



often run by various managers without input from the CEO. To maximise the impact of their CSR

activities firms need to ensure that they have unified strategies focusing on three areas or “theaters”:

philanthropy; improving operational effectiveness;

and transforming the business model to create shared value. There are four actions they can take

to help form a unified CSR platform: cutting back and aligning programmes in each “theater”;

developing metrics to measure performance; coordinating programmes across the “theaters”; and

developing an interdisciplinary CSR strategy.

Harvard Business Review, January-February 2015, pp40-49 (Rangan et al)

Engaging channel partners

Research suggests that 5% of marketing budgets are allocated to partnership marketing. Customers

have more choices than ever before and brands need to do more to motivate their partners who are

a valuable channel to market. Channel programmes

need to be constantly evolving in response to the competitive environment and to take advantage of

tools such as social media. Here are five pieces of advice for maximising channel engagement and

improving its performance.

B2B Marketing, January 2015, p38 (Horsham)

Radical innovation generalisations and stories

The author offers three generalisations about

success in radical innovation. The first generalisation is that radical innovation is a discovery process

which involves taking action without full knowledge of the outcome. The second is that active marketing

is essential in making radical innovation successful

and the third is that social interaction can stimulate, reinforce and guide radical innovation. These

generalisations are illustrated through five stories: two describe organisations that have had trouble

innovating but eventually succeeded and three describe extremely successful radical innovation.

Industrial Marketing Management, Vol 43(8) 2014, pp1278-1283 (Starbuck)

R&D collaboration in process innovation

This article looks at how research and development

(R&D) collaborations affect process innovation (defined as “the introduction of a new method of

production”). Four types of R&D collaborations are identified - universities, suppliers, competitors and

customers - which are classified in terms of two

dimensions: position in the knowledge chain and contextual knowledge distance. Using this

classification the authors propose a ranking of R&D collaborators in relation to their impact on process

innovation. They suggest that R&D collaborations with suppliers have the greatest impact followed by

those with universities, competitors and finally

customers. The hypotheses are tested on 781 manufacturing firms. The findings suggest that the

main driver of the impact of R&D collaborations on process innovation seems to be position in the

knowledge chain rather than contextual knowledge distance. The implications are discussed.

Journal of Product Innovation Management, Vol 32(1) 2015, pp 138-153 (Un and Asakawa)

Frugal innovation

Frugal innovation initially promised to meet the

demand from consumers in emerging markets but this article questions whether it has made any

impact at all. A new book, entitled Frugal Innovation: How to Do More with Less by Navi

Radjou and Jaideep Prabhu, claims that the concept has made advances, not just in the emerging world

but also in the rich world. Rich world companies are

increasingly turning to frugal innovation practices which have been pioneered in the emerging world.

The launch of the Tata Nano car in India played on people’s perceptions that cheap goods are shoddy

but such prejudices are being brushed aside by the

demand for cheap goods and discounting.


Charities and NGOs Media partnerships

It is not unusual for charities to provide transport and accommodation for journalists in order to gain

publicity for their causes and campaigns. Now charities are coming up with new ideas to gain

coverage for their activities. Christian Aid, for

example, sponsored The Guardian to produce articles and films on issues relating to its Poverty

Over campaign. Other charities make their own films and offer them to broadcasters. Ultimately charities

should not seek to control everything that a journalist publishes about them and must rely on the

journalist to be sympathetic to their cause.

Third Sector, February 2015, p54

BHF wants people to go into the red British Heart Foundation is asking people to “Wear

it. Beat it” on 6 February to raise awareness of heart disease. Over 13,000 people have signed up to wear

red on the day or to host an event.

Third Sector, February 2015, p19

RSPB – flies in new direction

The Royal Society for the Protection of Birds (RSPB)

expected around half a million people to participate in its “big garden birdwatch” this month. The

charity, which was founded in 1889 to protect birds, has recently broadened its remit: a 2013 TV ad

featured frogs and hedgehogs and the charity has

rebranded its Birds magazine to Nature’s Home. The RSPB has strong competition from other nature

charities and growth has been slowing. Its new strategy, which includes a more active marketing

campaign, appears to be working and membership



has exceeded 1.1m for the first time. But some people worry that the campaigning mission of the

Victorian founders may be lost…

The Economist, 24 January 2015, pp26-27

Durable consumer goods Toy company spins a gender yarn

Canadian toy company Spin Master, owner of Meccano, has been criticised for its gender-specific

advertising. A 4ft-high Meccano robot, (the

Meccanoid), appeared on a poster at the London Toy Fair describing the target market as “boys 8+”.

Meanwhile the company has been targeting its Sew Cool thread and chocolate makers at girls. Company

VP, Ben Varadi, believes that marketing campaigns

aimed at both boys and girls would simply “confuse the message”.


Barbie shows its age Sales of Mattel’s Barbie doll have been declining as

children shift their preferences towards electronic devices. Barbie, whose sales fell by 21% in the third

quarter of 2014, has apparently run out of new

ideas in the digital age. Bryan Stockton, CE of Mattel, has resigned amid accusations that he has

focused too much on numbers and not enough on creativity.

The Times, 27 January 2015, p39; The Guardian, 27 January 2015, p29

Economy British business most optimistic in Europe

PwC’s annual survey of business leaders from around the world reveals that British chief

executives are the most optimistic in Europe. More

than 90% expressed optimism about expanding their companies over the next three years. This

reflects the gradual recovery in the UK compared with the struggling Eurozone. Britain also ranked as

number three of the top business destinations for

growth behind the US and China. However, a skills gap was cited as a major problem among 84% of

the UK’s CEOs. Overall one in five CEOs considered that the global economy would decline this year

compared with none who thought so last year.

The Daily Telegraph, 21 January 2015, pB5

Energy and utilities Big Six lacking in customer satisfaction

A new survey from Which? ranks the Big Six energy suppliers as the worst for customer satisfaction and

value for money. The survey has found a gap between the service the big companies offer and

that offered by smaller companies. npower is in

bottom place with a customer score of just 35% while Ecotricity is in pole position with 84%. The Big

Six, who supply around 90% of UK household

energy, are currently being investigated by the Competition and Markets Authority. This survey is

good news for green power: the top two providers, Ecotricity and Green Energy, supply their electricity

only from renewable sources.

The Independent, 22 January 2015, p12

Gas price cuts dismissed as “token”

npower is to cut its gas bills by 5.1% in February. It

is the fourth big UK energy company to announce a price cut - SSE and EDF Energy have yet to do so.

E.ON was the first to reduce its tariffs when it cut gas prices by 3.5%. In contrast, renewable energy

suppler Ecotricity is to reduce its gas bill by 6.1% in

May. Ann Robinson, director of consumer policy at price comparison website uSwitch, referred to the

price reductions as “token gestures”; she believes that consumers should also benefit from reduced

electricity prices.

utilityweek.co.uk, 23 January 2015

Environment Forming green product evaluations

The greenness of a product has become increasingly

important to consumers yet little work has been done to ascertain how consumers form perceptions

of products’ greenness. Here the authors explore characteristics of products that lead to green

evaluations. They argued that products with the same environmental benefits will be judged on their

greenness depending on whether the benefit derives

from a central or peripheral attribute. Four studies are undertaken which explore factors influencing the

effect of central attributes.

Journal of Marketing, Vol 79(1) 2015, pp97-110 (Gershoff and Frels)

Continuous power for green cars The Highways Agency is considering the idea of

installing wireless technology beneath Britain’s roads

which could be used to charge hybrid and electric cars as they travel, providing them with a

continuous supply of energy. The aim is to increase the number of electric cars on the roads. Last year a

record number (14,500) were registered. However,

there are huge feasibility problems not least of these being cost…


Fashion Mirror mirror… Neiman Marcus, the luxury fashion brand, is

introducing digital mirrors into its outlets. The ‘memory mirror’ captures images and videos of

people trying on clothes enabling shoppers to see

outfits side by side or outfits in a different colour. The images can be shared via e-mail or social

media. A sales associate interface allows staff to



send recommendations to customers from the mirror. The product is unique to Neiman Marcus.


Change at the top for A&F

In December Michael Jefferies, creator and CE of

Abercrombie & Fitch, left the company having controlled most aspects of the business for 22 years.

Abercrombie, which owns three brands, has

remained largely unchanged since it was first defined by Jefferies in the 1990s. It has also had

some bad publicity including a comment from Jefferies that he only wanted thin, beautiful people

to wear the clothes. By 2013 both A&F and Hollister

were among brands that teen girls said they no longer wore. The question is whether A&F can

revive the brand…

Bloomberg Businessweek, 26 January-1 February 2015, pp46-51

Smart scarf understands how you feel Researchers at Microsoft are developing a ‘smart’

scarf which is linked to a smartphone app, plays music and displays lights in line with the mood of

the wearer. If the user appears to be stressed, the

scarf plays soothing music and if they are sad the music becomes cheerful accompanied by suitable

lighting. The scarf can also detect the feelings of those around it which may help autism sufferers to

understand how others are feeling.


Financial services FCA criticises bank savings market

The UK’s Financial Conduct Authority reports that

over a fifth of savers are receiving interest at the Bank of England base rate or less. In addition the

FCA found that some 80% of easy-access accounts had not been switched over in the past three years.

The FCA believes that firms should be competing to

offer the best deal and give consumers the information they need to make decisions. The

Competition and Markets Authority is currently undertaking an investigation into personal and small

business banking.


Micro-loans in India Micro mortgages, such as those from the Micro

Housing Finance Corporation, are helping informal-sector workers and small-scale entrepreneurs in

India to buy their own homes. MHFC has no branches and is a paperless enterprise, relying on

technology to store data. Despite having a social

mission it is making a profit, although the return on equity is much lower than that of mainstream

housing financiers.

Financial Times, 22 January 2015, p14

P2P mortgages… A new type of crowdfunding website is allowing

people to take part in financial services without the need for a bank. Peer-to-peer (P2P) lending

connects people who need money with those who

are willing to lend. It has grown in popularity over the past few years as sites such as Zopa started to

help people with their personal loans through crowdsourced funding. LendInvest.com is an

example of a company offering P2P mortgages which could change the face of the housing market

and cut banks out of the equation. But there are

risks involved with P2P lending - the Royal Institution of Chartered Surveyors has expressed

concern that crowdfunding has made buy-to-let “as easy as ordering a book on Amazon”.

New Scientist, 24 January 2015, pp21-22

…FCA has its eye on the marketing The Financial Conduct Authority (FCA) is looking

carefully at P2P advertising due to concerns that

some have been mis-selling products as “risk-free” savings accounts. The FCA said that “the quality of

the information provided to consumers in marketing” is something that it has been focusing on and that it

has been working with P2P firms on this issue.


FMCG Unilever attributes ROI to digital

Unilever has increased its share of advertising spend

while at the same time maintaining its brand and marketing investment. It has continued to increase

digital adspend, which rose by 20% in the third quarter. CEO, Paul Polman, said that the increased

emphasis on digital has resulted in “better ROI” and

he plans to carry on increasing digital spend in the fourth quarter. This contrasts with McVitie’s which is

focusing on TV rather than digital. (See below)


Beverages Brits to overtake French in wine sales The amount spent on wine in Britain is set to

increase by 6.2% to £11.24 billion between 2014 and 2018 according to Vinexpo. Britain will become

the second-biggest market behind the US at £21.83 billion and ahead of France at £10.85 billion. The

French still drink double the amount that Britain

does (266m cases vs 123m last year) but the English are becoming connoisseurs and have more

wealth than the French so they tend to buy more expensive wine.

The Times, 22 January 2015, p11; Financial Times, 21 January 2015, p4



Cosmetics and toiletries

Retailers should revamp healthcare shelves GSK says it has made a “breakthrough” in shopper

psychology and wants retailers to reorganise their

oral health shelves. Using eye-tracking technology it has discovered that, by organising products by what

they do rather than by brand, retailers can help to overcome “shopper apathy”. GSK suggests that the

ideal oral health aisle should start with regular

products and then move on the specialist sections. It also believes that retailers should use better display

and signage with ‘hot spots’ to promote new products or offers.

The Grocer, 24 January 2015, p12

Food

Foie gras producer could be prosecuted

Foie gras producer Ernest Soulard is on trial in France having been accused of “serious

mistreatment and cruelty”. The company supplies the product to some of the top chefs in Paris. To

date none of the cases brought by animal rights

activists have come to court but now animal rights group L214 has brought a private prosecution after

publishing a video showing geese being force-fed in farms which supply Soulard. If the case succeeds

others might follow. Serious chefs are divided as to

whether they will continue to buy from Soulard.


Meating out the facts

Meat is an important source of protein which the body needs to grow and as people are eating more

meat than ever, demand is growing. The type of meat we buy is also changing with less fresh meat

and more ready meals being purchased. Meanwhile

concerns for both health and the environment are rising. This article examines meat consumption, its

implications for health and the cost to the environment. It points out that red meat can be

green and that even vegetarians don’t always make healthy choices.


UB takes the biscuit with TV ads

United Biscuits marketing director, Sarah Heynen, has led an overhaul of McVitie’s which owns brands

such as Jaffa Cakes, Hobnobs and Penguin. A three-year campaign supported by a £12m budget has

resulted in growth of 1.2% compared with 0.3%

prior to the new ads being launched. Market share has also risen, from 23% to 26%. Previous

marketing rested on price, promotion and functional advertising but this campaign moves away from the

image of “the biscuits granny gave you”, says Heynen. The appointment of ad agency Grey

London last August led to the masterbrand

campaign in which puppies, kittens and an owl

wowed audiences. Future plans should result in

more TV appearances for McVitie’s in contrast to its usual seasonal ads. Meanwhile digital will remain a

subsidiary platform.


Quorn grows from strength to strength in US Yorkshire-based Quorn has announced an annual

sales rise of 7% to £150m with some 25% of growth coming from the US in the second half of 2014.

Walmart has been stocking Quorn for the past two years. The product has clearly appealed to US

demand for healthy eating and concerns over

obesity.


Warburtons comes out fighting

In what is described as “one of the unlikeliest pairings in advertising history”, actor Sylvester

Stallone is taking part in a Warburtons bread ad. He

will appear on screen with Jonathon Warburton in a new TV ad which was filmed in a bakery.

Warburtons lost £50m in bread sales last year as consumers turned to discounters and moved away

from sliced bread. The company has responded by

launching premium products. Stallone has previously appeared in ads for beer, sausages and meat.

The Grocer, 24 January 2015, p5

Tobacco Plain packaging on the cards

The UK Government is to go ahead with plans to introduce plain cigarette packaging from next year.

Ministers said that a ban on cigarette pack advertising was “proportionate and justified” and

they intend to hold a vote before the General Election. The initiative aims to weaken the loyalty of

the smoker for a particular brand by removing all

signs of branding. The new rules will take effect in May 2016. The success of Australia’s plain packaging

regime is hotly contested by the smoking lobby. The Independent makes a brief foray into the history of

cigarette advertising.

The Times, 22 January 2015, p2; The Independent, 23 January 2015, pp38-39; Financial Times, 23 January 2015, p4

Luxury e-cigarettes

The most expensive part of an e-cigarette is the

battery and vapers are willing to pay more for a good one. Walton-on-Thames-based Andrew Korn

makes luxury e-cigarettes. His company, Luxe Mod, makes high output batteries made from high-quality

steel which can sell for as much as £600. Most of its

products are exported to the US but now it is working on a solid gold, diamond-encrusted battery

for a client in Dubai who will pay £40,000 for it.




Government and public sector

UK campaigning – old-fashioned tactics?

Ad spend for the UK’s General Election is likely to be

dominated by the Conservative Party which seriously outspent other parties in the 2005 and 2010

elections, when ad spend accounted for nearly half their campaign budget. UK spending is small-fry

compared with the amounts spent in the US: in the

lead-up to the 2012 election the Democrats and Republicans together spent $2.3 billion (£1.5 billion)

which compares with £100m shelled out by all UK parties for the last three general elections. This year

Labour leader, Ed Milliband, has insisted that the party will win “by having millions of conversations”

rather than buying up billboards. It is likely that this

election will be fought using mainly old-fashioned methods rather than social media as in the US. TV

debates are also expected to exert a considerable influence on the public.

Marketing Week, 22 January 2015, pp20-21

Political campaigns

This article critiques Mad Men & Bad Men: What Happened When British Politics Met Advertising, a

book by Sam Delaney. An anecdotal account of British political advertising over the past half-

century, the book makes reference to famous campaigns, such as the Saatchis’ “Labour isn’t

Working” message which helped Margaret Thatcher

into power.


Army awareness

A poll taken in December revealed that one in five people believe that the Army is less relevant than

ever before. This may be because the number of

troops has been reduced by thousands. A new campaign created by Engine is intended to raise

awareness of the role that the Army plays and to encourage people to sign up as reservists.


Health and pharmaceuticals Smart clothes monitor pregnancy health A range of ‘smart’ maternity clothes can help

pregnant women to track changes in their body. “B”

Maternity Wearables were designed by US fashion student Blake Uretsky. The clothing contains

conductive silver fibres which can register the wearer’s temperature, heart rate, blood pressure

and respiration. A separate device sends the data

back to a smartphone app. Women with high risk pregnancies could benefit from the technology.


IT and telecoms Vodafone – making the right connection Vodafone has a slightly staid image among mobile

phone networks. It is also associated with the corporate side of telecoms and sports and has a

more masculine image with its red branding and

Formula 1 sponsorship. Lately it has adopted a warmer, more human persona: last year’s

“Firefighter” ad using real firemen reflects the change in the company’s brand and communications

strategy, according to Daryl Fielding, director of

marketing and communications. She is joined as a contributor to this article by Mike Taylor, head of

consumer and enterprise market research at Vodafone. They describe how the company is

connecting with its customers.

Impact, January 2015, pp38-42

Innovation at NRF

The recent National Retail Federation (NRF)

conference in New York showcased some interesting innovations, nine of which are described here. They

include the Cicret Bracelet, which can project the screen of a smartphone on to the wearer’s wrist; the

HAPIfork, a Bluetooth fork which tracks how fast someone eats to help them slow down; and 3D

printed headphones that can be personalised to fit

the wearer’s ears perfectly!


Microsoft introduces hologram headset

Last week Microsoft announced a new holographic headset as part of its Windows 10 operating system.

The Microsoft holographic platform and headset

allow the user to converse with people in Skype fashion and can make the living room into a virtual

landscape for a computer game. Users can even create images as holograms and then 3D print them

to make them real. Microsoft hopes to win back

customers after the poor response to its Windows 8 operating system in 2012. The company has also

unveiled a new browser, code-named Spartan, and a TV screen designed for the office, called Surface

Hub.

The Independent, 22 January 2015, p16; Financial Times, 24-25 January 2015, p14

More consolidation - Three to acquire O2

Hutchison Whampoa, owner of Three, is to buy O2 from Telefonica for £10 billion. This will be the

second major consolidation of the industry following the news that BT plans to acquire EE. The O2-Three

deal will result in Britain’s largest mobile operator with 32m customers, pushing Vodafone into last

place with 20m. The acquisitions will reduce the

number of operators in the UK from four to three but this is not a unique position: other countries -

Austria, Germany and Ireland - also have just three. In such consolidated markets regulators have



imposed certain conditions to protect competition.

The Daily Telegraph, 23 January 2015, ppB1,3; The Guardian, 23 January 2015, p26

Leisure and tourism Super Bowl – super ad budgets America’s Super Bowl is the second-most watched

TV event in the world after the Champions League football final. Live sporting events are rapidly

becoming essential for broadcast television, which is competing with streaming and on-demand services.

Advertisers were prepared to pay an average cost of

$4.2m in 2014 for a 30-second screening during the Super Bowl. But most Super Bowl viewers are young

men which is reflected in the types of brands which advertise: since 2010 four out of five of the biggest

ad spenders have been brewers or car

manufacturers.


YouTube competes with Super Bowl show

Super Bowl’s half-time show is a big event which attracts top music stars. This year YouTube intends

to rival it by putting on its own half-time show

online. The show will feature some of YouTube’s biggest stars, such as Harley Morenstein and Freddie

Wong. It will use the show and the ads to differentiate itself and show its value to top brands.

Last year YouTube achieved 379m views of Super Bowl ads.

Bloomberg Businessweek, 26 January-1 February 2015, pp21-22

Materials and mining Gold brand opens to the public

Members of the public are to be allowed to buy gold

bars directly from the Royal Mint for the first time ever. The Royal Mint Refinery brand has reappeared

for the first time in nearly 50 years. The initials “RMR” were last stamped on a new bar of gold in

1968. The cost of a bar will depend on the

fluctuating price of gold but at one point last week a 1g gold bar cost £42.84 while a 100g bar cost

£2,843.97. Last week also saw gold rise to its highest price since August as investors looked for

safe investments.


Media

Books E-subscriptions – the world is your oyster

A raft of new e-book subscription companies is offering book-lovers the chance to read as many

books as they want for around $10 per month. Amazon, Oyster and Scribd already provide this

service in the US. People are familiar with unlimited

access subscriptions for music and TV offered by the likes of Netflix and Spotify. But book publishers and

authors, who make most of their money from single book sales, may decide to hold back newer or more

popular titles. Only three of the five largest publishers in the US have signed up so far.


Unexpected merger

Macmillan Science & Education (owned by Holtzbrinck) and Springer Science + Business Media

are merging, pending regulatory approval, to form a science publishing house with a turnover of €1.5

billion. This will put it in fifth place in the ranking of academic, science, technical & medical (STM) and

education publishers.

The Bookseller, 23 January 2015, pp6-7

Foyles books station openings For the first time Foyles is to expand into the West

Midlands with the opening of a bookshop in Grand Central Birmingham station, its third station store.

This is Foyles’ second outlet outside London – it

opened a shop in Bristol in 2011. When asked if the Foyles brand performed well outside London, CEO

Sam Husain admitted that this, “is where we feel a bit more challenged…it takes a while for customers

to work out what Foyles stands for”.

The Bookseller, 23 January 2015, p18

Games Amazon gains a quarter of market Amazon accounted for 24.6% of physical sales of

games, music and DVDs in the run-up to Christmas. Tesco took 13.9% share and HMV 13.9%. This is a

good result for Amazon since shoppers tend to

spend more on entertainment in high-street stores than they do online. Fiona Keenan of Kantar

Worldpanel which produced the data, says that retailers should find ways to encourage consumers

to impulse buy online.

The Independent, 26 January 2015, p52

Internet eBay cuts jobs eBay is to lose 2,400 jobs after suffering from weak

Christmas sales and a forecast of slow growth for this quarter. The job cuts, comprising 7% of the

workforce, will take place across the company’s

three divisions: marketplaces, enterprise and PayPal. eBay has decided to spin off its PayPal division and

is considering the possibility of a sale or public offering of its enterprise unit.


Music Shazam – from music to media

Shazam the music identification app, has become popular through being able to identify the names of

songs. The company’s growth has been reflected in its advertising on TV, cinema and radio over the



past few years. Chairman Andrew Fisher says that Shazam has become, “more of a media company

than a music company”, with over 500 “Shazamable” campaigns in the US and a number in

the UK. With 100m monthly users and a valuation of

$1 billion, Fisher is considering a stock market listing this year.

The Independent, 22 January 2015, p57; The Times, 22 January 2015, p50; Financial Times, 22 January 2015, p19

Social media Pinterest failing to add value for brands According to a report from Forrester, Pinterest’s ad

platform, Promoted Pins, has experienced limited

targeting and effectiveness in the US. The platform was launched in January last year but Forrester

claims that marketers are “struggling” to gain value from the branded boards. Some 56% of top brands

have created a board on Pinterest but brands are obtaining fewer followers and re-pins than on other

social networks.


Twitter in first Indian acquisition Twitter has acquired Indian marketing company

ZipDial. The latter, based in Bangalore, helps FMCG companies, including Unilever and Procter &

Gamble, to run marketing campaigns. Customers are

able to register their interest in a promotion or advert through a ‘missed call’, a technique whereby

users call a number and then hang up. Twitter has the problem of increasing revenues in countries such

as India where ad markets are small and online advertising nearly non-existent. Other big tech

companies, such as Yahoo, Amazon and Facebook,

have been investing in India’s start-ups.


Packaging Packaging issues

In this special report on packaging, The Grocer covers three major topics. The first is packaging

waste in the EU, which includes comments on the Circular Economy Package and the Packaging Waste

Directive. The second article address the thorny

issue of copycat packaging, including the case of Jif vs Borden. The third article looks at the pros and

cons of glass and plastic packaging and its impact on premium products. There is also a brief section

on paper packaging.

The Grocer, 24 January 2015, pp28-35

Bump mark to challenge sell-by dates

More than 4m tonnes of consumable food and drink

are thrown away in Britain every year. Now industrial designer Solveiga Pakštaitė has come up

with the Bump Mark, a label on food packaging which changes shape when the product is no longer

fresh enough to eat but remains smooth when the food is still fresh. As well as helping blind people,

the label offers an alternative to sell-by and “best before” dates.


Bubble wrap appreciated on YouTube

To mark Bubble Wrap Appreciation Day (26 January), packaging company Sealed Air created a

Bubble Wrap bike featuring its mascot “Professor Packaging”. A video of the bike on YouTube has

already received nearly two million views.

packagingnews.co.uk, 26 January 2015

Retailing Tesco targets supplier relationships

Tesco has created an online platform called the

Tesco Supplier Network to help improve its relationship with suppliers. Its aim is to provide a

forum for its more than 5,000 members so that they can connect with each other as well as Tesco’s

buying teams. A BBC Panorama programme has

recently criticised Tesco for the way in which it deals with its suppliers.


China a key destination for Western retailers Western retailers are busy expanding in China to

benefit from its healthy economy. Apple plans to open five stores ahead of the Chinese New Year on

19 February while Inditex (owner of Zara) plans to

open its 500th store in the country this year. Carrefour is considering a stock market listing for its

Chinese business.


BHS and the future of the department store

BHS, part of Sir Philip Green’s Arcadia retail empire, is up for sale. But BHS is a loss-making business and

the retail market is dominated by discount stores

and online operators so the chances of a sale are slim. BHS has been around since 1928 following

Woolworth’s successful lead. This article considers the prospects for the department store’s survival.

The Independent, 27 January 2015, pp52-53

Services A new model for mentoring A variety of consultants and support services have

arisen to help people who are applying to university

or business school in a growing global market. 100mentors offers a marketplace for undergraduates

or graduates of a university to mentor candidates for that university. Services include help with CVs, essay

reviews or mock interviews. The website offers a

platform for mentors by supplying the payment method and security. Traditional admission

consultants could charge $3,000 per package but



this service offers a similar package for $300 to $500. If the 100mentors model works it could lead

to other communities of mentors.

Business Strategy Review, Vol 25(4) 2014, p74

Sunday deliveries give Amazon the edge…

Amazon claims that Sunday deliveries in the UK have quadrupled year-on-year. Amazon products are

now being delivered on Sundays in most major cities

in the UK with Amazon Logistics at the helm. The latter provides the facilities for local and national

delivery companies to make Sunday deliveries. Royal Mail is struggling to keep up.


...but Royal Mail claims to be delivering Royal Mail chief executive, Moya Greene, believes

that some of the company’s competitors for parcel

delivery will collapse this year due to “too much capacity” in the market. She argues that big retailers

will go for quality and opt for Royal Mail rather than its smaller rivals. The company benefited from

unexpectedly good Christmas results: UK parcels

were up by 4% with 120m parcels being delivered in December. However, in November Royal Mail

warned that Amazon’s next-day delivery service would threaten its parcels business.

The Independent, 23 January 2015, p56; The Times, 23 January 2015, p39; Financial Times, 23 January 2015, p24

Invent-a-relationship service A new online service aims to help single people who

want to pretend to be in a relationship. The

“Invisible Boyfriend” and “Invisible Girlfriend” websites help you to create a fake partner who can

chat, leave voicemails and even send cards after you have decided on a name, age, appearance and

personality type for your fictional character. The service, which is only available in the US and

Canada, provides 100 texts, ten voicemails and a

postcard every month!


Transport and travel British car sales surge ahead

Last year was the strongest for British car manufacturers since 2007: 1.5m cars were produced

or one car every 20 seconds. Production was 1.2%

higher than 2013 and more rises in production are expected this year. Jaguar Land Rover reported

volumes up by nearly 7.5% during 2014 but Honda saw its sales volumes fall by 12.3%. Growth in the

car sector contrasts with greater pessimism in other

manufacturing areas, as revealed by the CBI’s latest industrial trends survey.


China - car sales slow in favour of luxury In 2009 China became the world’s largest car

market, having overtaken the US; since then volumes have grown at a compound annual rate of

14%. Major car companies derived a healthy

proportion of their revenues from China in the third quarter of 2014. Yet sales growth in the country is

slowing down and prices have been falling. The affordable luxury market is one of the areas still

expanding and one dealer in Hong Kong has reported luxury vehicle sales up by 18% year-on-

year. The strict rules governing foreign car sales in

China have deterred some manufacturers, such as Fuji Heavy, which owns Subaru.


Diesel could be pushed into slow lane The French government is to “progressively” ban

diesel vehicles starting this year. Diesel vehicles

make up two-thirds of car sales in France and the Government owns 15% of Renault and PSA Peugeot

Citroën, two-thirds of whose car sales are diesel. For a decade carmakers have invested heavily in diesel

vehicles because they emit less CO2 than petrol vehicles. But Europe is beginning to focus on air

quality and questions are being raised about diesel,

as this article explains.


Written by CIM’s Knowledge Services Team

© Copyright 2015 CIM

The views expressed in Cutting Edge are not

necessarily those of The Chartered Institute of

Marketing.



On the Move

Name From To New title Source

Natalie Gunning Ipsos Healthcare Impact Health Research Manager research-live.com

Claire Harrison Premier Foods Asda Vice President of

Marketing

The Grocer

Caroline Hukins Clore Social Leadership

Programme

The Royal Forestry Society

Fundraising Manager Third Sector

Marie Moatti n/a Hermès Press & PR Manager for Hermès

Fragrances in the UK

fashioninsight.co.uk

Tom Shelston National Trust Royal Horticultural Society

Director of Members and Marketing

Third Sector

Nick Williamson William Grant & Sons

The Quintessential Group

International Marketing Manager

The Grocer

Promotions

Name Company Previous title New title Source

Richard Brim Adam & Eve/DDB Creative Executive Creative

Director

Campaign

Abigail Comber British Airways Head of Marketing Head of Customer research-live.com

Louise Jackson Rapp Managing Partner Executive Head of

Client Services

Campaign

Eleni Lawrence Hodder & Stoughton

Publicity Director Communications Director

The Bookseller

Andrew Mann The Co-Operative

Group

Customer Director Customer Data

Experience Director

The Grocer

Anjali Puri TNS Head of Qualitative

Centre of

Excellence, Bangalore

Global Head of TNS

Qualitative

research-live.com

Barry Williams Asda Head of Merchandising for

Food

Head of Marketing brandrepublic.com



Sources

We created this edition of Cutting Edge from the

sources listed in the next column. As a member you

have access to a discrete range of them through the

CIM website, some are freely available on the internet,

but there will be others that we can only supply you

with through our photocopying service.

To access the journals you have available to you as a

member:

Go to www.cim.co.uk/elibrary and log in to the site.

You will then have access to the links to Ebsco,

Emerald and the e-books available via MyiLibrary.

A user guide for the electronic resources is also

available here.

Please note: the titles as they appear in Cutting Edge

are not the same as in the original article. If the

journal is within Ebsco, you can search by publication,

which then allows you to choose the date. This page

will also clearly show if there is an embargo on the title

or if there is a short delay.

Key

**Full text available on Ebsco – although there may be

an embargo

*Abstract available on Ebsco

+Full text available on Emerald

~Available online if you register

# Key Note reports are available in the library at Moor

Hall. Members can request the contents pages of a

report and can receive up to 10% via our

photocopying service. We can also supply the reports

in full at a discount.

Please contact the library if you would like any further

assistance or would like more information on our

photocopying services (charges apply) or purchase of

Key Note reports.

Tel +44 (0)1628 427333

Email [email protected]

B2B Marketing

Bloomberg Businessweek*

The Bookseller**

Business Strategy Review** (12 month embargo)

Cambridge Marketing Review

Campaign**

Conference & Incentive Travel

Construction News

The Daily Telegraph ~

Database Marketing

The Economist*

www.eventmagazine.co.uk

The Financial Times ~

The Grocer

The Guardian

Harvard Business Review**

Impact

The Independent

Industrial Marketing Management

Journal of Marketing**

Journal of Marketing Communications** (18 month

embargo)

Journal of Product Innovation Management**(12

month embargo)

www.lexology.com

The Marketer (log in same as for the CIM website)

Marketing Week **

New Scientist** (1 month embargo)

www.packagingnews.co.uk

Retail Week

Third Sector (selected articles available)

The Times

www.utilityweek.co.uk

Velocity

Wired (selected articles available)

Please contact the library if you would like any further assistance or

would like more information on our photocopying services.

Tel +44 (0)1628 427333

Email [email protected]

http://www.cim.co.uk/elibrary

mailto:[email protected]

http://www.eventmagazine.co.uk/

http://www.ft.com/

http://www.guardian.co.uk/

http://www.independent.co.uk/

http://www.lexology.com/

http://www.themarketer.co.uk/

http://www.packagingnews.co.uk/

http://www.thirdsector.co.uk/

http://www.utilityweek.co.uk/

http://www.wired.co.uk/

mailto:[email protected]



Contents To fast forward click on the following links:

Agriculture, fishing and forestry

Building industry

Businesses and strategy

Charities and NGOs

Durable goods

Economy

Energy and utilities

Environment

Fashion

Financial services

FMCG

Beverages

Cosmetics and toiletries

Food

Tobacco

Government and public sector

Health and pharmaceuticals

IT and telecoms

Leisure and tourism

Marketing trends and issues

Advertising

Agencies

Brands and branding

Conferences and events

Consumer behaviour

Customer relations

Direct marketing

Law

Marketing

Public relations

Sponsorship

Materials and mining

Media

Books

Games

Internet

Music

Social media

Packaging

Retailing

Services

Transport and travel

On the move

cutting edge: our weekly analysis of marketing newstechnology-savvy millennials. havas media group...

Documents