When Markets go Dark

Darkside

Traditional marketing theory holds that there are three broad strategies for positioning a product.  You can be the best, you can be the cheapest, or you can serve a specific niche.

It is most simple to communicate that you are the best or the cheapest.  It is more difficult to communicate niche benefits.  One great boon of the arrival of the internet was to support niche communications.  Using the internet you can target communications at tiny market segments and still succeed.  As a result we get the “long tailed comet” and the weakening of mass market simplification.  We don’t all have to settle for a white sliced loaf simply because it serves the broadest audience.  You can get your loaf of yeast free pumpkin seed bread made with stone ground flour from a mill operated by orphan refugees.

What is interesting about Dark Markets is that this niche power is removed.  Tobacco is the most dark market we have.  Some nations are very dark, Australia, Canada, Ireland and England seem to be in a competition to win the race to be the darkest tobacco market.  In Ireland the product is no longer visible in-store.  The packs are hidden behind closed doors, and no advertising, promotion or communication of any sort is permitted to the end consumer – other than the price list.

Absent any communication it is impossible to convey the benefits of niche products.  As a result people select using simplified heuristics.  They can see the price.  So it is either high price or low price.  Highest price must be the most premium product and lowest price is assumed to be best value.  Consumers assume that lower price products will be of inferior quality, and in the case of tobacco they will be less “healthy” than the premium price products.  It is interesting that the biggest markets for low price brands, and for counterfeit brands, are in the “full strength” tobacco products.

Profit margins on low price products are derisory.  It is in the interest of the manufacturers to keep as much of the business as possible up at the premium end.

So what?

Other markets are going dark.  Pharmaceuticals are partially there, Alcohol is being targeted, Baby Milk Formula, Childrens Cereals.  Many products run the risk of following tobacco down the path to the dark side.  What lessons can you learn from Tobacco?

1.  Stop fighting for share.

If you treat a dark market the way you treat an overt market, and fight for market share, you will lead a race to the bottom on price, and drive value out of the market.  The major players in the market have to move away from using share points to reward sales teams.  Focus on profitability measures.

2.  Build premium positions.

Forget the middle market.  Devote your resources now to building strong premium positions that are simple, clear and relevant in the minds of your consumers.  Don’t waste money building brand positions for marginally profitable lines.  Be patient!  Take your time to build your premium position.  You will come under relentless pressure from sales to use sales promotions and discounts to push share.  You have to fight that.  A premium brand should never be on sale.

3.  Cheap must have a compromise.

If one player is building a fighter/Tiger brand, you need to communicate to your consumers why Premium is different to Value.  Why is cheap also nasty?  You must convey this effectively before the market goes dark, or the consumer will simply buy on price.  But you also need to be careful not to damage the category.  If cheap vodka is bad for your health, it must also be clear that premium vodka is at least health neutral (ceteris paribus)

4.  Motivate stakeholders early.

Get the retailers to buy in on premium.  Make sure they understand that it is about CASH margin, not percentage margin.  So what if you get 15% on a $10 bottle of Vladiawfull vodka.  It is far better to get a tight margin on a €60 bottle of Grey Goose.  Also, get them to fight for light.  Make it clear to them what the negative impact of a dark market means to their business.  Organise them into lobby groups.  Help them to advocate their positions with  grass roots political representatives.

5.  Build a network of ambassadors.

Find the people who like your product now and recruit them for the long haul.  Not barmen or shop staff.  They have to have longevity, so they need to be business owners.  Get long term buy in for your brands now, and it will pay back handsomely when the market goes dark.  Bring these people together, make a community where they can help each other and help your brands.  The market may be dark, but you can have online buzz as members plan their next outing of the eg John Player Amateur Golf Classic.

Tom Foolery

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We have this bomb shelter in our garden.  It is a silly thing, built in the second world war out of concrete.  Who ever thought that County Tipperary would be a target for bombers?  But it is very hard to go back in time and understand the motivations of those who built it.  I guess it is a small indication of the very real fear that people felt during World War 2, even those in supposedly neutral countries like Ireland.

This bomb shelter floods every autumn when the water table rises, and remains flooded all winter, drying out only in late spring.  It is pretty much a useless endeavor.  The entrance is steep, claustrophobic, slippy, dark and clammy.  A perfect nightmare.

What I find funny is how it has lodged in the childhood memories of so many of my wife’s cousins.  The house has been a constant fixture in the folk memory of her Tipperary family.  As kids they were paraded out here on Sunday afternoons to visit their terrifying Aunt Babe.  Strapped into uncomfortable Sunday best they were expected to behave, to be seen and not heard.

When released from the parlor and set loose in the gardens they made for the Air Raid Shelter.  Boys dared each other to descend into this dark, damp and frightening hole.  So it became a rite of passage for them to dare the horror and emerge unscathed, proud and just that little more grown up.  Any of the male cousins I have met have asked if the air raid shelter is still there.  It looms large in their memory of the house.

In a small way it reminds me of the entrance to Dwimorberg and the men of Dunharrow.  I thought I should stick a sign on it saying;

The way is shut.

It was made by those who are Dead.

And the Dead keep it.

The way is shut.

Lament for Eorl the Young; by JRR Tolkien
Where now is the horse and the rider? Where is the horn that was blowing?
Where is the helm and the hauberk, and the bright hair flowing?
Where is the hand on the harpstring, and the red fire glowing?
They have passed like rain on the mountain, like a wind in the meadow;
The days have gone down in the West behind the hills into shadow.
Who shall gather the smoke of the deadwood burning,
Or behold the flowing years from the Sea returning?

Full of Beans

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Did a lot of gardening and DIY this week.  Tidied up the downstairs toilet by boxing in all the pipework, cleaned out the lower gutters, staked the tomatoes, planted beans and staked them too.  I have a good bit going on in the garden now.  Peas, Beans, Carrots, Beetroot, Onions, Garlic, new Thyme plants, Strawberries, Raspberries.  The Plum tree is looking good, a lot of fruit buds.  But the apple trees are a big disappointment.  I think I have two blossoms from five trees.  Next year!  Hopefully they will come back next year.

Lots of Elderberry blossoms on the way.  I think I may have a go at making elderberry wine if there are enough.  If not, maybe some elderberry cordial.  I believe you can make a champagne from elder blossom.  Must try that sometime.

There are two young rabbits wandering round the garden.  They are living in the field next door, and have not found the vegetable patch yet.  If they do, their lives may be in danger.

Should have the last of the Leland Cypresses cleared out of the garden this week.  Next door lost most of his in the big storm in April.  I had already been culling mine out of the garden for the last two years, so little to clear.  But the last and biggest decided to go out with a bang and landed on the roof of the stable next door.  Luckily the Insurance company is covering that one.  I am so glad to see them go.  They were killing the orchard and garden here, letting no sun through.  They are trees that do not belong in Ireland and should need a licence to be planted.  They grow about 3 foot per year in this climate.  In the 1970’s they were touted as a great solution for instant screening and wind shade.  Tip for you gardeners – if it grows fast, it grows out of control fast.  Buy slow growing plants and be patient.

Now that the beans are planted I could have gone for “the musical fruit” as a poem, but it’s a bit obvious.  And this one is better…

The Bean Eaters; by Gwendolyn Brooks

They eat beans mostly, this old yellow pair.
Dinner is a casual affair.
Plain chipware on a plain and creaking wood,
Tin flatware.

Two who are Mostly Good.
Two who have lived their day,
But keep on putting on their clothes
And putting things away.

And remembering . . .
Remembering, with twinklings and twinges,
As they lean over the beans in their rented back room that
is full of beads and receipts and dolls and cloths,
tobacco crumbs, vases and fringes.

Success and Failure

suarez

I don’t know what to say really.  Three minutes to the biggest battle of our professional lives all comes down to today.  Either we heal as a team or we are going to crumble.  Inch by inch, play by play, till we’re finished.

We are in hell right now, gentlemen believe me and we can stay here and get the shit kicked out of us or we can fight our way back into the light.  We can climb out of hell.  One inch, at a time.

Now I can’t do it for you. I’m too old. I look around and I see these young faces and I think, I mean, I made every wrong choice a middle aged man could make.  I uh…. I pissed away all my money believe it or not. I chased off anyone who has ever loved me. And lately, I can’t even stand the face I see in the mirror.

You know when you get old in life things get taken from you.  That’s, that’s part of life. But, you only learn that when you start losing stuff.  You find out that life is just a game of inches. So is football. Because in either game, life or football, the margin for error is so small.  I mean one half step too late or too early, you don’t quite make it. One half second too slow or too fast and you don’t quite catch it.  The inches we need are everywhere around us. They are in every break of the game, every minute, every second.

On this team, we fight for that inch. On this team, we tear ourselves, and everyone around us to pieces for that inch.  We CLAW with our finger nails for that inch. Cause we know when we add up all those inches that’s going to make the fucking difference between WINNING and LOSING between LIVING and DYING.

I’ll tell you this in any fight it is the guy who is willing to die who is going to win that inch. And I know if I am going to have any life anymore it is because I am still willing to fight, and die for that inch, because that is what LIVING is. The six inches in front of your face.

Now I can’t make you do it. You gotta look at the guy next to you. Look into his eyes. Now I think you are going to see a guy who will go that inch with you.  You are going to see a guy who will sacrifice himself for this team because he knows when it comes down to it, you are gonna do the same thing for him.

That’s a team, gentlemen and either we heal now, as a team, or we will die as individuals. That’s football guys. That’s all it is. Now, whattaya gonna do?

(Al Pacino’s motivational speech from “Any Given Sunday”)

 

You’ll Never Walk Alone:  (R. Rodgers – O. Hammerstein II

When you walk through the storm
Hold your head up high
And don’t be afraid of the dark
At the end of the storm
There’s a golden sky
And the sweet silver song of the lark

Walk on, through the wind
Walk on, through the rain
Though your dreams be tossed and blown
Walk on, walk on, with hope in your heart
And you’ll never walk alone
You’ll never walk alone

May your day be great

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I thinkMay is my favourite month.  May is the month when the protagonist in “The Rocky Road to Dublin” sets off on his adventure.  In the more plaintive poem & song “On Raglan Road” the poet harks back to heady May days from his advanced position at the closing of the years of his life.

Apples blossom and the first food plants are emerging from the soil, bearing a promise of plenty.  The lambs and calves are born and there is new life and new energy everywhere.  The sun shines longer and we begin to get some real heat into the days.

This outpouring of new life reflected itself in times past in pagan May Day fertility rites, with lusty lads and lithe lassies cavorting about Maypoles.  Communal spring dancing is a feature of societies all across Europe.  They provided a reason for people to get out and about and for young adults to meet up and form couples.  The heavy spring work of ploughing and planting is done and there is an opportunity to celebrate and let the hair down before the haymaking begins.

A modern revision of these ancient rites is now re-enacted in the USA every year.  Not many young Americans are involved in ploughing and planting these days.  Instead they plough the library stacks and plant ideas onto college papers.  The date of the fertility rites has moved slightly, for reasons of academic planning, but the intent is the same.  Gangs of young adult men and women meet up to cavort every year at Spring Break.

Young adults always think their generation is new, exciting, dynamic and different, but in truth they follow very well worn paths.

 On Raglan Road; by Patrick Kavanagh

On Raglan Road on an autumn day I met her first and knew

That her dark hair would weave a snare that I might one day rue;

I saw the danger, yet I walked along the enchanted way,

And I said, let grief be a fallen leaf at the dawning of the day.

On Grafton Street in November we tripped lightly along the ledge

Of the deep ravine where can be seen the worth of passion’s pledge,

The Queen of Hearts still making tarts and I not making hay –

O I loved too much and by such and such is happiness thrown away.

I gave her gifts of the mind I gave her the secret sign that’s known

To the artists who have known the true gods of sound and stone

And word and tint. I did not stint for I gave her poems to say.

With her own name there and her own dark hair like clouds over fields of May

On a quiet street where old ghosts meet I see her walking now

Away from me so hurriedly my reason must allow

That I had wooed not as I should a creature made of clay –

When the angel woos the clay he’d lose his wings at the dawn of day.