Marketing lessons from a dog

This marketing dog must have done its research, understood its market segment and delivered its unique selling proposition in a memorable manner. See it to believe it. Enjoy.

harvey the marketing dog

harvey the marketing dog

Marketing lessons from a dog:


Surround yourself with people

Surround yourself with people

New Aflac soccer ad

The Aflac Duck back to soccer… This is a commercial you cannot miss… I, personally, have to try really hard to pay attention to the message because the duck steals the whole show.



like it's promised

like it’s promised

Next Quote? funny inspirational quotes on every post!

Is Mexico the “New” China?

When it comes to global manufacturing, Mexico is quickly emerging as the “new” China.

According to corporate consultant AlixPartners, Mexico has leapfrogged China to be ranked as the cheapest country in the world for companies looking to manufacture products for the U.S. market. India is now No. 2, followed by China and then Brazil.

In fact, Mexico’s cost advantages and has become so cheap that even Chinese companies are moving there to capitalize on the trade advantages that come from geographic proximity.

According to corporate consultant AlixPartners, Mexico has leapfrogged China to be ranked as the cheapest country in the world for companies looking to manufacture products for the U.S. market. India is now No. 2, followed by China and then Brazil. In fact, Mexico’s cost advantages and has become so cheap that even Chinese companies are moving there to capitalize on the trade advantages that come from geographic proximity.

According to corporate consultant AlixPartners, Mexico has leapfrogged China to be ranked as the cheapest country in the world for companies looking to manufacture products for the U.S. market. India is now No. 2, followed by China and then Brazil. In fact, Mexico’s cost advantages and has become so cheap that even Chinese companies are moving there to capitalize on the trade advantages that come from geographic proximity.

The influx of Chinese manufacturers began early in the decade, as China-based firms in the cellular telephone, television, textile and automobile sectors began to establish maquiladora operations in Mexico. By 2005, there were 20-25 Chinese manufacturers operating in such Mexican states Chihuahua, Tamaulipas and Baja.

The investments were generally small, but the operations had managed to create nearly 4,000 jobs, Enrique Castro Septien, president of the Consejo Nacional de la Industria Maquiladora de Exportacion (CNIME), told the SourceMex news portal in a 2005 interview.

China’s push into Mexico became more concentrated, with China-based automakers Zhongxing Automobile Co., First Automotive Works (in partnership with Mexican retail/media heavyweight Grupo Salinas), Geely Automobile Holdings (PINK: GELYF) and ChangAn Automobile Group Co. Ltd. (the Chinese partner of Ford Motor Co. (NYSE: F) andSuzuki Motor Corp.), all announced plans to place automaking factoriesin Mexico.

Not all the plans would come to fruition. But Geely’s plan called for a three-phase project that would ultimately involve a $270 million investment and have a total annual capacity of 300,000 vehicles. ChangAn wants to churn out 50,000 vehicles a year. Both companies are taking these steps with the ultimate goal of selling cars to U.S. consumers.

Mexico’s allure as a production site that can serve the U.S. market isn’t limited to China-based suitors. U.S. companies are increasingly realizing that Mexico is a better option than China. Analysts are calling it “nearshoring” or “reverse globalization.” But the reality is this: With wages on the rise in China, ongoing worries about whipsaw energy and commodity prices, and a dollar-yuan relationship that’s destined to get much uglier before it has a chance of improving, manufacturers with an eye on the American market are increasingly realizing that Mexico trumps China in virtually every equation the producers run.

“China was like a recent graduate, hitting the job market for the first time and willing to work for next to nothing,” Mexico-manufacturing consultant German Dominguez told the Christian Science Monitor in an interview last year. But now China is experiencing “the perfect storm … it’s making Mexico – a country that had been the ugly duckling when it came to costs – look a lot better.”

The real eye opener was a 2008 speculative frenzy that sent crude oil prices up to a record level in excess of $147 a barrel – an escalation that caused shipping prices to soar. Suddenly, the labor cost advantage China enjoyed wasn’t enough to overcome the costs of shipping finished goods thousands of miles from Asia to North America. And that reality kick-started the concept of “nearshoring,” concluded an investment research report by Canadian investment bank CIBC World Markets Inc. (NYSE: CM)

“In a world of triple-digit oil prices, distance costs money,” the CIBC research analysts wrote. “And while trade liberalization and technology may have flattened the world, rising transport prices will once again make it rounder.”

Indeed, four factors are at work here.

Mexico’s “Fab Four”

  • The U.S.-Mexico Connection: There’s no question that China’s role in the post-financial-crisis world economy will continue to grow in importance. But contrary to the conventional wisdom, U.S. firms still export three times as much to Mexico as they do to China. Mexico gets 75% of its foreign direct investment from the United States, and sends 85% of its exports back across U.S. borders. As China’s cost and currency advantages dissipate, the fact that the United States and Mexico are right next to one another makes it logical to keep the factories in this hemisphere – if for no other reason that to shorten the supply chain and to hold down shipping costs. This is particularly important for companies like Johnson & Johnson (NYSE: JNJ), Whirlpool Corp. (NYSE:WHR) and even the beleaguered auto parts maker Delphi Corp. (PINK: DPHIQ) which are involved in just-in-time manufacturing that requires parts be delivered only as fast as they are needed.
  • The Lost Cost Advantage: A decade or more ago, in any discussion of manufactured product costs, Asia was hands-down the low-cost producer. That’s a given no more. Recent reports – including the analysis by AlixPartners – show that Asia’s production costs are 15% or 20% higher than they were just four years ago. A U.S. Bureau of Labor Statistics report from March reaches the same conclusion. Compensation costs in East Asia – a region that includes China but excludes Japan – rose from 32% of U.S. wages in 2002 to 43% in 2007, the most recent statistics available. And since wages are advancing at a rate of 8% to 9% a year, and many types of taxes are escalating, too, East Asia’s overall costs have no doubt escalated even more in the two years since the BLS figures were reported.
  • The Creeping Currency Crisis: For the past few years, U.S. elected officials and corporate executives alike have groused that China keeps its currency artificially low to boost its exports, while also reducing U.S. imports. The U.S. trade deficit with China has soared, growing by $20.2 billion in August alone to reach $143 billion so far this year. The currency debate will be part of the discussion when U.S. President Barack Obama visits Chinastarting Monday. Because China’s yuan has strengthened so much, goods made in China may not be the bargain they once were. Those currency crosscurrents aren’t a problem with the U.S. and Mexico, however. As of Monday, the dollar was down about 15% from its March 2009 high. At the same time, however, the Mexican peso had dropped 20% versus the dollar. So while the yuan was getting stronger as the dollar got cheaper, the peso was getting even cheaper versus the dollar.
  • Trade Alliance Central: Everyone’s familiar with the North American Free Trade Agreement (NAFTA).  But not everyone understands the impact that NAFTA has had. It isn’t just window-dressing: Mexico’s trade with the United States and Canada has tripled since NAFTA was enacted in 1994. What’s more, Mexico has 12 free-trade agreements that involve more than 40 countries – more than any other country and enough to cover more than 90% of the country’s foreign trade. Its goods can be exported – duty-free – to the United States, Canada, the European Union, most of Central and Latin America, and to Japan.

In the global scheme of things, what I am telling you here probably won’t be a game-changer when it comes to China. That country is an economic juggernaut and is a market that U.S. investors cannot afford to ignore.  Given China’s emerging strength and its increasingly dominant financial position, it’s going to have its own consumer markets to service for decades to come.

Two Profit Play Candidates

From a regional standpoint, these developments all show that we’re in the earliest stages of what could be an even-closer Mexican/American relationship – enhancing the existing trade partnership in ways that benefit companies on both sides of the border (even companies that hail from other parts of the world).

In the meantime, we’ll be watching for signs of a resurgent Mexican manufacturing industry that’s ultimately driven by Chinese companies – because we know the American companies doing business with them will enjoy the fruits of their labor.

Since this is an early stage opportunity best for investors capable of stomaching some serious volatility, we’ll be watching for those Mexican companies likely to benefit from the capital that’s being newly deployed in their backyard.

Two of my favorite choices include:

  • Wal Mart de Mexico SAB de CV (OTC ADR: WMMVY): Also known as “Walmex,” this retailer has all the advantages of investing in its U.S. counterpart – albeit with a couple of twists. Walmex’s third-quarter profits were up 18% and the company just started accepting bank deposits, a service that should boost store traffic. And while the U.S. retail market is highly saturated – which limits growth opportunities – there are still plenty of places to build Walmex stores south of the border. After all, somebody has to sell products to all those thousands of workers likely to be involved in the growing maquiladora sector.
  • Coca-Cola FEMSA SAB de CV (NYSE ADR: KOF): Things truly do go better with Coke – especially higher wages and an improved lifestyle. According toReuters, Mexicans now consume more Coca-Cola beverages per capita than any other nation in the world. The company just posted a 25% jump in its third-quarter net earnings, aided by a strong 21% jump in revenue. Coca-Cola FEMSA continues to experience strong growth from its Oxxo convenience stores, and strong beer sales, too. And all three product groups are logical beneficiaries of strong maquiladora development and the growing incomes and rising family wealth that will translate into higher consumer spending in the immediately surrounding areas.

Source: Keith Fitz-Gerald is the chief investment strategist for Money Morning and The Money Map Report.

whoever is trying to bring you down

whoever is trying to bring you down

Kraft, Tecate Share Hispanic Marketing Knowledge

With all of their diversity, marketing successfully to Hispanics comes down to core best practices that have far more overlap than divergence from best practices in the general market.

Hispanic Marketing Knowledge - key principle #1 is developing a deep understanding of the lifestyles and primary motivators of the Hispanic consumer prospect segments

Hispanic Marketing Knowledge – key principle #1 is developing a deep understanding of the lifestyles and primary motivators of the Hispanic consumer prospect segments

Case in point: In recent interviews with Carlos Boughton, brand director, Tecate Equity for Heineken USA, and Chris McGrath, senior director, Latina cohorts for Kraft Foods North America, each expressed very similar thoughts regarding key principles for success — although their target audiences are quite different.

Not surprisingly, key principle #1 is developing a deep understanding of the lifestyles and primary motivators of the Hispanic consumer prospect segments or universes for specific product categories /brands. Both Tecate and Kraft of course engage in extensive, in-house consumer research, as well as sharing knowledge with other major marketer companies that participate in the Latinum Hispanic marketing business network.

However, both Boughton and McGrath stress that research is a means to that end of truly understanding the consumer groups in order to establish a clear, relevant, overarching identity that guides all marketing messages.

As a major brand that is not only marketed exclusively to Hispanics, but specifically to male Hispanic immigrants of Mexican origin, Tecate is somewhat unusual. However, Boughton stresses that brands casting a wider net must also gain segment-specific understanding to uncover core, shared values and priorities that enable relevant, overarching ideas and themes.

In Tecate’s case, the overarching target audience values center on masculinity and character (“carácter” in Spanish) — pride in working hard, being stoic and doing what’s necessary to fulfill the responsibilities of providing for the family’s needs and supporting the community. “Our message is ‘men behaving like men,’ and celebrating the character it takes to do the very difficult things they do day in and day out,” sums up Boughton. “Everything we do is aligned with that.”

Like its recent, award-winning “Disclaimer” radio ad (which used a long ‘disclaimer’ to define which types of men should not drink Tecate, including those who have dogs named Puchi, Tinkerbell or Princess), Tecate’s brand-new “Anthem 3” campaign zeroes in on these themes — as do all of the brand’s marketing efforts, including its extensive sponsorships of boxing events and televised matches, points out Boughton.

Kraft’s focus is on understanding its audience of Latina moms, the primary family food-purchasing and menu decision-makers. “Because we understand her needs in depth, and can offer relevant messages and solutions, we have forged strong connections” with these moms, says McGrath, both through cross-brand channels such as Kraft’s Comida y Familia (food and family) magazine/Web site and marketing for specific brands.

Like all moms, Latina moms are focused on food quality and value, and those messages are obviously key in outreach for Kraft brands for which this market is a key to growth, such as Kraft Singles and Kool-Aid.

Intensive consumer research recently led, for example, to an integrated Kraft Singles campaign for the Hispanic market geared not to usage videos/recipes, but to stressing that the brand is made with milk — not oil and water — in line with Latina moms’ emphasis on serving whole foods and made-from-scratch meals to their families. The campaign has been very successful because it strikes a cultural chord, reports McGrath — adding that in this case, the message, which was some years back a core one for general-market efforts, might also prove valuable for “infusing back” into the general market.

Latina moms also have a strong desire to “keep their cultural roots alive for their children,” and take pride in adding culturally specific “touches and twists” to meals — “even something as all-American as mac and cheese,” notes McGrath. Comida y Familia’s recipes and suggestions reflect this, as do brand-specific efforts.

For some brands– like Kool-Aid, focused on the universal fun-appeal/value of the product for families with young children — the approach is in a sense “one marketplace, two languages,” but that’s possible because of attention to “integrity” and nuance in conveying the mutually relevant theme within tailored messaging to the Latina market, stresses McGrath. “We do try to fuse brand identity as much as possible in English and Spanish versions, but we never lose sight of meaning and relevance to the audience,” she says.

Indeed, like Boughton (all of Tecate’s Hispanic marketing efforts are also Spanish-language, with the exception of a few components for Tecate Light), McGrath points to straight translations of general-market messaging as one of the most ineffective approaches when it comes to Hispanic marketing.

Often, Hispanic marketing is viewed as just a “line item” within a brand or company budget, and the misguided approach of “taking the English version and running it through the Google translator” results, says Boughton. But even when investment in Hispanic marketing is limited, marketers can do far better than this by immersing themselves in the cultures and daily lives of a brand’s users/prospects, listening and finding those overarching values and themes, he emphasizes.

Asked where else companies miss the mark when it comes to Hispanic marketing, McGrath cites the primary mistake as “waiting for consumers to assimilate,” rather than actively finding ways to connect meaningfully with them now.

Source: MediaPost News – Kraft, Tecate Share Hispanic Marketing Knowledge

Five Foundations For Online Marketing From Coca-Cola

It seems that Coca-Cola focuses on the fundamentals when it comes down to online marketing.

They use five key foundations for the online marketing efforts. Add value. Be transparent. Be consistent and follow through. Be receptive to change. Surprise and delight your customers.

These are some premises many talk about but not often delivered.

  1. Add value. Bring value into every interaction.
  2. Be transparent. Listen to what your brand owners are saying. You are not your brand owner. You are the steward of your brand.
  3. Be consistent and follow through. Stay on brand strategy and stay true to who you are. Make human connections, which we all share, better and more meaningful.
  4. Be receptive to change. Mix things up to keep it fresh.
  5. Surprise and delight your customers. Again, keep things interesting and fresh.

Online Marketing from Coca-Cola: Campaigns result

For the world and this one was for Friendship Day in Latin America, they created “La Máquina de la Felicidad” or “The Happiness Vending Machine” and the success was outstanding. See for yourselves.

This one took place in the U.S. and with a different twist and an amazing ending. Wouldn’t you share online what is taking place? 🙂