Vol 28 Issue 1/2 2010

MarketingMix Contents

I 0 2 I Ed’s note I 2 4 I Community media

Marketing Mix looks to see if local is still relevant.
I 0 3 I Retail marketing guide: POPAI’s Scott
Adcock takes a look at the state of the marketing
at-retail industry. I 2 9 I Expert opinion: Nici Stathacopoulos
Nici suggests that in order to keep true loyalty, all contact
I 0 6 I Retail marketing guide: POPAI Trend and points must be considered.
Spend Study.

I 3 0 I Custom publishing
I 0 8 I Retail marketing guide: Mike Aitken of the
Coupon Clearing Bureau looks at the art of coupons. Marketing Mix dives into the world of custom magazines
and their benefits.

I 1 0 I Retail marketing guide: Kennedy Zakeer of

Barrows looks at the real shopper insights.
I 3 4 I 2010 Marketing trends
Marketing Mix offers its predictions for the year ahead.
I 1 2 I Retail marketing guide: Retail marketing
best practices.
I 3 6 I Book review: 2010 Flux Trends
I 1 5 I Expert opinion: Richard Duncan
Richard looks at the retail recovery Down Under.
I 3 7 I Expert opinion: Maruis Wait
1
Marius looks at the cost of selecting the right salespeople.
I 1 6 I 7 day [b]itch
Matebello Motloung, media and advertising writer, Financial
Mail. I 3 8 I Expert opinion: Aardt Davidtz
Aardt looks at the connection between brand and
I 1 8 I Brand anatomy: Liberty packaging.

I 2 0 I Magazines
I 3 9 I Word of mouth marketing
Marketing Mix probes the future of magazines in South
Africa. Marketing Mix listens to what the experts have to say.

10 16 20 38
PROPRIETOR AND PUBLISHER: Systems Publishers (Pty) Ltd. Tel: (011) 234 7008 North Block, Bradenham Database:
Hall, Mellis Road, Rivonia, Johannesburg PUBLISHER: Terry Murphy MANAGING EDITOR: Michelle Sturman List Perfect
michelles@systems.co.za DEPUTY EDITOR: Tshepiso Seopa teshipos@systems.co.za ADVERTISING MANAGER:
Terry Murphy terrym@systems.co.za PRODUCTION: Spencer van Graan spencerg@systems.co.za EVENT ENQUIRIES:
Noelene van Niekerk noelenen @systems.co.za SUBSCRIPTION ENQUIRIES: Marianne Nzioki mariannen@systems.co.za

www.marketingmix.co.za 3 292
(Jan-June 09)

vol 28 / issue 1/2 / 2010 • marketingmix.co.za

 Ed’s note

Turn up traffic to the till point

he holidays are long gone and we are all back into the

T swing of things. So much has happened that the New

Year doesn’t feel so new anymore: A devastating quake
killed at least 217 000 people in Haiti; the revelation of President
Jacob Zuma’s 20th child just as SA was preparing to celebrate
the 20th anniversary of the unconditional release of Nelson
Mandela from prison; Toyota facing a PR nightmare over its faulty
cars and more than a few sex scandals ruining sporting heroes.
I’m afraid the first 2010 Marketing Mix edition isn’t quite as
scandalous, but it does offer lots of info on the South African
retail landscape. One question I have always asked myself is if
South Africans, especially in Johannesburg, really do love to
shop and to sell? There are shopping malls everywhere; some are
so big they’ll give you a good day’s hike from one end to the
other. The retail marketing guide aims to give insight on how to
turn up the traffic to your point of sale and get the cash register
ringing. Getting the shopper to part with their hard-earned cash
in times of economic strife it is not an easy task. On top of this,
the shopper and consumer is complicated, the shopping
2 environment unpredictable, and products and brands are
competing for the consumer’s attention in more ways than one.
The magazine section offers Q&As with some of the top
publishers in the country, providing an overview of the state of
the magazine industry. The publishers answer some of the
probing questions that marketers and planners want answered,
particularly as the print industry is so volatile at this point
in time.
Also in this issue are features on community media,
custom media and a review of the 2010 Flux Trends edited
by Dion Chang.

Enjoy your read and don’t forget to visit

www.marketingmix.co.za

Happy 2010

Oops...
In the Nov/Dec 09 issue of Marketing Mix we
stated that total circulation for the Amakhosi
magazine was 21 342. The actual figure is 21 324.

marketingmix.co.za • vol 28 / issue 1/2 / 2010

 Retail marketing guide

International MAR
trends 2010
arketing at-retail has developed significantly in the past

M five years. Every area of the business has changed and

developed as realisation has grown that the store is a vital
and valid vehicle for communicating with shoppers. The hackneyed
phrase ‘the last three feet’ (referring to the point of decision
in-store for the shopper) has started to be appreciated for what it
really is, the last and most significant opportunity for a brand to
influence the buying decision of a shopper.
Brands have made great strides in developing the professionalism
required at point of purchase (POP). Permanent POP development
is a complicated process and demands a level of technical
understanding to gain the best results. This has always been an issue 3
for brand staff who still have a high churn rate in positions related
to POP. Nevertheless standards are rising.

Brands have also started to embrace the

concept of ‘Shopper Marketing’. This is

and will have a huge impact on the

MAR industry.

informed as to what MAR impacts best on their shoppers and

Brands have also started to embrace the concept of ‘Shopper
Marketing’. This is and will have a huge impact on the MAR
industry. One definition is ‘all marketing stimuli, developed based
on a deep understanding of shopper behaviour, designed to build
brand equity, engage the shopper (ie a consumer in ‘shopping
mode’) and lead them to make a purchase’. Once brands start to
understand shopper behaviour they will also understand how this
relates to MAR. The impact of this will be brands that are better
where it should be located. This is the first time that these ideas
have been examined. In the US and Europe they are starting to
impact on brand spending decisions.
Brand spending on MAR has continued to increase and is forecast
to continue. Actual figures are hard to get hold of, but a recent
survey from POPAI, the industry trade association, reports that
brands are generally increasing spend and are moving money from
above to below the line. This is extremely significant for the future
and highlights that some of the more sophisticated brands are now
genuinely integrating above and below the line thinking and bringing

vol 28 / issue 1/2 / 2010 • marketingmix.co.za

 Retail marketing guide
the thinking on in-store execution to the beginning of the planning
process rather than the end. It means also that marketing directors
are getting involved in retail which, historically, has rarely been the
case. This is by no means prevalent but it will be.
The continuing emphasis on the grocery sector in the trade
press, globally, hides the fact that the majority of MAR is placed
elsewhere. Groceries’ much publicised ‘clutter-free’ or ‘clear-floor’
policies have really impacted only on the temporary sector and
even there not to a dramatic degree. In value terms much has been
cleared from ceiling displays as people realise that shoppers look up
for direction, and level or down for information.
The sectors that are taking MAR have not changed much in the
past few years. Cosmetics, health and beauty, telecoms, luxury
goods, consumer electronics, sports and leisure, and entertainment
continue to be major users of displays largely provided by the
brands. This looks likely to continue.
What is changing are the types of displays and the level of
sophistication. We have seen a great increase in displays featuring
some form of interactivity. There are several reasons for this, not
least of which is the simple principle that shoppers notice things
that are moving. Allied to the constant quest for information,
particularly on products that are not a commodity, shoppers now
look to displays to provide this facility and back up or confirm
what has been found on the Internet. The quality of assistance in
retail is still low and displays are starting to take the role of, in
most cases, ‘the silent salesman’ by providing screens, web-based
information systems and the like that deliver relevant information
to the shopper. As the cost of technology continues to fall this is
4 sure to form a greater part of POP market.
An area that has not developed at the expected speed has been
the use of digital screen networks in retail. In a recent POPAI
survey 15 per cent of all stores in the UK’s top 10 shopping malls
have screens in their stores. However, only a small percentage is
formal digital networks, the rest are individual screens showing a
wide range of generally ill-thought content.
MAR companies will have to think more like
agencies to appeal to the new brand
marketers and maintain a close watch on
their production overheads.
Retailers in general are gradually coming to terms with what
digital screen networks are and what they can deliver, and there is
some realism coming into an over-hyped business area. In the
future the steady growth of digital screen networks will continue
as they do have unique benefits for retailers, particularly in the
flexibility of content that can be shown. The potential of this are
enormous and has not yet been addressed in a coherent way across
the industry. Successful networks have a range of objectives and
ways of delivering them rather than simply being based on an
advertising revenue model. In some cases, shoppers may be bored
marketingmix.co.za • vol 28 / issue 1/2 / 2010
by constant advertising, and brands/advertising agencies are not
hearing convincing arguments based on media audience standards
that would make them want to buy the space.
The threat from online shopping has been with us for several
years and will not go away. As things stand, for the next 10 years at
least as far as commentators are aware, people will continue to go
shopping thus providing the opportunity to influence their purchases.
Retail must work harder to firstly, attract shoppers into store and,
secondly, deliver a good experience at an attractive price. The MAR
industry has a major part to play in this and we must expect retailers
either directly or via the brands they stock to respond to the threat
and act on it. It is surprising that retail has not made more use of its
traditional benefits that still hold true.
The move of above-the-line advertising agencies into the world of
MAR is the most significant development in the past three years.
The reasons for this are clear and relate to reductions in fee income from
above the line and the desire to retain the relationship with the client
at all levels. While there are few of these that have fully established
themselves in MAR, a number have started to make inroads. The
significance of this is related to points made earlier regarding where
future budgets may come from and who will control them.
Advertising agencies have a far greater knowledge of the brand,
its history and ethos, and this will give them a potential advantage
over MAR companies whose main areas of expertise relate to
creative design and practical manufacture. The agencies also deal at a
higher level within brands. Agencies are working more closely with
MAR companies, which is positive as it brings more money into the
sector. The difficulty will come if agencies believe they have learned
all they need to from the MAR industry and decide to do it all
themselves.
This brings us to manufacturing. Most MAR companies outsource
some or all of their manufacturing, particularly metalwork and
injection moulding, the most capital-intensive processes.
Additionally, most technology applications, such as interactive
screens, are also bought in. The ready availability of cheap
manufacturing capacity in Eastern Europe and China has started to
change the way the industry works making it easier for new companies
who provide a design and project management capability to establish
themselves. In a very small number of cases clients have also either
for themselves or as a result of information from overseas offices
started to get directly involved in the manufacturing of displays.
A great deal of manufacturing and assembly still takes place in the
country where the MAR company is located but this will reduce
over the next three years. Given that clients are becoming more
professional and POP is thought about earlier in the process, the
key reason now for manufacture, timescale, will have less relevance.
In conclusion, MAR along with retail will have to adapt continually
to keep pace with social change. The future for MAR over the next
three years looks positive as many of the factors that can be forecast
bode well for the industry. A period of limited consolidation may
follow as companies merge to gain the financial strength to compete
in a bigger market. MAR companies will have to think more like
agencies to appeal to the new brand marketers and maintain a close
watch on their production overheads.
POP has finally attracted the attention of clients at director level
and the industry has to capitalise on it. 
Scott Adcock
executive director
POPAI South Africa
scott@popai.co.za
 Retail marketing guide

POAI 2010 spend and trend study

OPAI South Africa (an international trade

P association for the marketing-at-retail industry)

has released wave 2 (2009 actual vs. 2010 estimate)
of the recent spend & trend survey research, specifically
Importance of media categories
Comparing the importance of media categories 2009 actual vs. 2010 estimate

focusing on the impact of below-the-line marketing and Rank 2009 (actual) 2010 (estimate)
how it’s changed from 2008 to 2010. 1 Digital media Digital media
While the wave 1 (2008 actual vs. 2009 estimate) online 2 National media National media
response rate was fairly low at 28 per cent, wave 2 3 In-store marketing In-store marketing
generated a 100 per cent response rate. Interestingly, and 4 Custom publishing Experiential marketing
encouragingly, the data remained fairly stable regardless 5 Experiential marketing Commuter media
of the higher response rate in wave 2. The survey
6 Community media Custom publishing
conducted by Research & Planning Intelligence (rpi), a
7 Commuter media Community media
division of The Smollan Group, focused on the following
8 Direct to home Direct to home
objectives: to emphasise the importance of the POP
sector, highlight the category growth and decline by
identifying the changes from 2009 actual vs. 2010
estimates and by providing benchmark data for members against estimate was: National Media (67%), In-Store Marketing (64%);
which they can measure their own performance. The data was Experiential Marketing (61%), Commuter Media (50%) and
interpreted by taking into account local and international trends. Direct-to-Home Distribution (30%). There was no change in
The questions were designed to look specifically at POP spend importance in the 2010 estimate for Custom Publishing (50%) and
from manufacturers, advertising agencies, retailers, brands and POP Community Media (50%) vs. 2009. “There is definite move towards
service providers. Quantitative online interviews were conducted. below-the-line spending, and the importance of digital media is
Respondents were invited to complete a 10 minute self-completion increasing,” says Lizette Kritzinger, account director, rpi.
6 questionnaire. The online collection tool is automated and responses
were monitored on a daily basis. Reminder e-mails to encourage Spend by media categories
participation and telephonic interviews were conducted between Despite the stated importance of National Media, budget allocation
14 August and 1 October 2009 to achieve the required response rate. to National Media declined from the 49 per cent estimated in 2009
Survey participation was representative of the following to 29 per cent actual spend in 2009. However, for the 2010
industries: brands (30%), retailers (13%), ad agencies (20%), estimates, National Media has declined to 28 per cent. There were
POP service providers (10%) and other representative (27%) – also increases in Community Media and Direct-to-Home
manufacturing, media agencies, mobile marketing, content Distribution from 2009 estimate to the 2009 actual spend. However,
providers and market researchers. 2010 estimates keep Community Media at eight per cent and in-line
with the actual 2009 spend, while Direct-to-Home Distribution
The results declined from six per cent to five per cent.
Media categories Despite declines for National Media overall it still receives the
The POPAI 2010 Spend & Trend Study highlighted a significant highest allocation of the budget, followed by Digital Media (16%)
increase in Digital Media, with over three-quarters of respondents at number two. In third place is In-Store Media (13%) and despite a
citing the media category as important or very important. Ranked decline in ranked importance for Custom Publishing, it is still
order importance for the rest of the media categories for the 2010 estimated to received 13 per cent of the budget spend in 2010,
similar to In-Store Media. Experiential Marketing
will receive an estimated 12 per cent of the marketing
budget in 2010.
Importance of promotional tools
Overall, less than 20 per cent of the marketing
Comparing the importance of promotional tools 2009 actual vs. 2010
budget is spent on any media category with National
estimate
Media, Digital Media, In-Store Marketing,
Experiential Marketing and Community Media
Rank 2009 (actual) 2010 (estimate)
getting the bulk of the spend each, between 20-40%
1 Pricing Pricing
of the marketing budget.
2 Digital: mobile ads Digital: mobile ads
3 Digital: networks Displays: temp Importance of promotional tools
4 In-store promoters Digital: networks Price (64%) is still the key promotional tool
5 Displays: temp In-store promoters although it hasn’t increased in importance from last
6 Displays: branded counters Displays: branded counters year. For 2010, ranked order importance of the top
7 Displays: permanent Digital: signage five promotional tools are: Digital: Mobile
8 Digital: signage Displays: permanent Advertising (52%), Displays: Temporary (51%),
9 Displays: gondola Displays: gondola Digital: Networks (50%), In-Store Promoters
(48%) & Displays: Branded Counter (48%).

marketingmix.co.za • vol 28 / issue 1/2 / 2010

 Retail marketing guide

However, the most significant increases in BTL budget: % spend on displays in 2010
importance were for the following 0% 1- 20% 21-40% 41-60% 61-80% 81-100%
categories: Displays: Temporary, Displays: Temporary displays 14 26 25 23 6 7
Branded Counter and Digital Signage. Permanent displays 28 25 24 14 6 3
“Although allocation of budget to digital Digital displays 16 26 25 10 8 14
media is still relatively small, the
importance of digital media seems to be
increasing,” says Kritzinger. Spend by promotional tools: In-store
The least important promotional tools in 2010 are Shopping The allocation of the marketing budget to Promotional Tools:
Trolleys (17%) and Shop Baskets (18%), although they have In-Store is focused around Permanent and Temporary Displays,
increased in importance. In-Store Promoters and Pricing. Less than 20 per cent of the
marketing budget is spend on any kind of displays with between
20-40% of the marketing budget mainly allocated to Permanent and
BTL budget: % spend on BTL categories Temporary Displays. “With In-Store Promoters, there seems to be a
growing concern around compliance, measurement and return on
2009 (actual) 2010 (estimate) investment,” says Kritzinger.
Other Promotional Tools: In-Store that received some marketing
Floor-standing unit/display 6% 10%
budget is Digital: Mobile Ads, Digital: Networks, Displays: Branded
Free-standing unit 6% 10%
Counter and Digital: Signage. A comparison of the 2009 actual vs.
Mobiles 18% 10%
2009 estimate shows overall marginal increases for most of the
Counter 2% 7% in-store promotional tools, except for In-Store Promoters,
Shelf talkers 4% 6% Coupons/Coupon Holders and Games/Sweepstakes that showed
Gondola ends 8% 6% declines. The marketing spend on digital is less than 20 per cent
Hot spot shelf display 3% 6% although it is increasing in importance. “There is little change in the
Floor displays 5% 5% efficacy of In-Store Displays from 2009 actual vs. 2010 estimate.
Case-stacker 1% 4% Price reductions are still rated as the most effective. Due to the
Pre-packed displays 3% 3% recession consumers across categories are re-evaluating their brand
Clip strip 3% 2% choices and purchases and they are switching brands because of the
price vs. value offering,” says Kritzinger.
Dump bins 6% 2% 7
Above-the-line and below-the-line advertising spend
In-line with international trends, the allocation of the marketing
budget between Above-the-Line (ATL) and Below-the-Line (BTL)
Spend by promotional tools: In-store is changing. Previously the split between ATL:BTL used to be
Average % 70:30, currently it is 50:50 and are trending towards 60:40 in 2010.
2009 (actual) 2010 (estimate) This is in line with international trends, particularly as traditional
Displays: Permanent 12% 14% media, such as newspapers and magazines, are in decline and TV and
Displays: Temporary 13% 13% radio advertising budgets are cut, safeguarding what little marketing
In-store promoters 10% 11% budgets remain.
Pricing 10% 9% Proportionately the ATL budget is mainly allocated to National
Media such as magazines, TV, outdoor and radio, while the BTL budget
Digital: Mobile ads 9% 9%
is allocated primarily to Floor Standing Units, Free Standing Units,
Digital: Networks 7% 8%
Shelf-Talkers, Gondola Ends, Wall-Mounted POS and Mobiles.
Displays: Branded 7% 7%
However, as Kritzinger points out, while we know just about
counter everything regarding top-end retail, we know very little about what
Digital: Signage 5% 6% is happening in-store in the so-called ‘emerging market’. “How
Displays: Gondola 6% 4% many people actually know anything about what goes on in a spaza
Displays: Ceiling 4% 4% shop or at a hawker table? You can’t rely on the wholesalers or
hanging boards independent retailers to provide this info so we simply don’t know
Displays: Stack cards 3% 3% how to target the shopper with BTL activities in the emerging
Refunds/rebates 4% 3% market,” says Kritzinger.
Digital: Kiosks/ 3% 3% The percentage of spend allocated to any BTL category is less
than 20 per cent. Only Floor Standing Units, Free Standing Units,
interactive screens
Shelf-Talkers, Gondola Ends, Wall-Mounted POS and Mobiles are
On/in packs 2% 2%
receiving at least between 20-40% of the BTL budget. “Community
Coupons/coupon 2% 1%
leaflets and newspapers are becoming very important as consumers
holders are shopping around for the best prices,” says Kritzinger.
Games/sweepstakes 1% 1% However, when respondents were asked to allocate their BTL
Shopping trolleys 1% 1% Budget in 2010 between permanent, temporary and digital displays
Shopping baskets 1% 1% the results were as follows: Based on the mean score 36 per cent
Digital: Shelf-edge 1% 1% were allocated to permanent displays, 26 per cent to temporary
systems displays and 38 per cent to digital displays. This again indicates the
rise in the important of digital. 

vol 28 / issue 1/2 / 2010 • marketingmix.co.za

 Retail marketing guide
The art of coupons
onsumer coupons have been part of the marketing
C landscape for about 40 years. In the early 1970s, the
industry was small, very fragmented and the number of
coupons in circulation was limited. Only 50 000 coupons were
redeemed in the first three months when the clearing house was
created in 1977. In 2010, the situation is very different.
In the 1990s, coupons became a small but important part of many
marketers’ marketing programmes to the extent that between eight
and 12 million coupons were redeemed on average each year in SA.
This may be small fry compared to the four to five billion coupons
redeemed in the US and 300 to 400 million redeemed in the UK.
However, one must look at these redemptions in terms of the
comparative sizes and make-up of the countries’ populations.
Coupon campaigns, distribution and redemption have fluctuated
from year to year. This is probably a function of what competing
advertising media are in vogue at a given time. The mid-2000s saw
many successful campaigns with large numbers of coupons being
distributed. The numbers waned through 2008 until October 2009
when a dramatic turnaround occurred.
At the time of writing, monthly coupon redemption stood at
two-and-a-half times that for September 2009. The Coupon
Clearing Bureau has been averaging one new inquiry about coupons
per day and the existing supplier base has also been incredibly
8 active. It seems2010 is going to be a good year for coupons.
The distribution of coupons at point of purchase has grown in
strength over the years to become one of the most effective
methods. Currently, 71 per cent of all coupons redeemed were
distributed at the point where the products were on display. The
methods used were coupon dispensers, on-pack coupons, neck tags
and in-store demonstrators. If we add coupons printed by the stores
themselves, this figure climbs to 92 per cent.
When considering the use of coupons to move
a product, one must bear in mind that not all
products coupon well. The utility value of the
product must be considered as well as its
target market.
We are seeing initiatives to distribute coupons via booklets,
newspapers and magazines. The heydays of coupons were the early
1990s when You, Huisgenoot, Drum and Bona carried 16 coupons in
each edition. So we may well see growth in the market from these
quarters as well. Recently noted is coupons appearing in
Free-Standing Inserts (FSIs), which is the preferred method of
distribution in the US, but so far has not been effective in SA.
Perhaps it is because we don’t have a ‘coupon-clipping’ culture in
marketingmix.co.za • vol 28 / issue 1/2 / 2010
SA. Generally, though, SA companies prefer to do small, well targeted
coupon campaigns because they seem to work well for them.
We have also seen initiatives to deliver coupons to shoppers in
electronically using cellphones and the Internet. These are early
days for them and we are looking with great interest at how
shoppers will take to these new forms of couponing products. It
should be mentioned that the Coupon Clearing Bureau is in a
position to accept electronic coupons and processes them in the
same way that it does the physical ones.
In this highly sophisticated electronic age, I do, however, recall
what John Naisbitt wrote in his book, Megatrends, about how in the
“high-tech” world, there is also a desire for “high touch”. Shoppers
enjoy walking around shops and I would say they also prefer to
have the coupon in their hands. Somehow the discount seems more
real.
When it comes to what products coupon well, the mix has shown
very little change over the years although we feel that detergents are
under-represented, particularly if one looks at redemption elsewhere
in the world. Currently, 56 per cent of coupons redeemed are for
food products, 15 per cent for household products, 15 per cent for
toiletries and four per cent for detergents. The remaining 10 per
cent largely relates to pet and baby products, OTC medicine and
product replacement.
Product replacement vouchers have grown significantly over
the years albeit from a small base. It has proved safer to post
personalised vouchers to shoppers than the replacement products.
When considering the use of coupons to move a product, one
must bear in mind that not all products coupon well. The utility
value of the product must be considered as well as its target market.
Our experience has been that coupons do well when targeted at the
upper LSMs. Limited usage products, like Tabasco, do not.
Overall, we are expecting coupons to do well in 2010 and beyond
if the growth that we are seeing is anything to go on. 
Mike Aitken
Coupon Clearing Bureau
www.ccbsa.co.za
 Retail marketing guide

The real shopper insights

arketers actually know very little about what happens once

M a person enters a store. A year ago that widely accepted

statement actually held water but as of late, the sentiment
is rapidly back stepping towards the exit door. Intuition and
experience in the field can finally be underscored with tried and true
“ insights. Shopper marketing research has shot to the top of the
priority list across the industry, and as more and more insights rise
to the surface, the better the position brands are in to fortify a
credible understanding of their audience and environments.
And it’s interesting. We now know that 80 per cent of a shoppers’
time in-store is spent simply moving from one place to the other;
which means that only 20 per cent of time in a supermarket is spent
interacting with products and adding to trolleys. So, it makes sense
that we start paying attention to how shoppers move, why they
move, why they stop, how to leverage open spaces, and how to
create more relevant interruption points. Here’s another stinger:
50 per cent of all shopping trips are for 10 items or less. So, if you
thought placing milk at the back of the store was a clever way to
lure customers deeper in, dreamily making impulse purchases along
the way – think again. It turns out that’s an irritation to a large
number of ‘top-up’ shoppers whose only aim is to get in and out
with speed and ease. And if you think the ‘choice galore’ trend is
still on the up, start reading because consumers have a new found
10 appreciation for edited selections of brands and SKUs. The point is,
that the more information that is uncovered and available, the better
equipped we are to shape effective promotional tools at retail and,
more importantly, give shoppers the experiences they want.
The old faithful, ‘Marketing 101’ sales-boosting methods such as
discounts, freebies and couponing will always move the needle, but
there are no ‘one size fits all’ solutions guaranteed to work in all defining what jobs must be achieved at retail, and weaving meaningful
channels, and appeal to all shoppers. Shoppers don’t want to be shopper and category insights into briefs before the design process
foiled by clever offers – they respond to straight forward pricing, begins. According to a 2009 Miller-Zell report, two-thirds of
value and clear messaging. shoppers arrive at the store with a shopping list in their grip, but
60 per cent of all brand decisions are made in-store. Equity builders
used to hang their hat on traditional advertising hooks, but the
experience at retail is fast becoming the big equity driver, and smart
impactful displays can bring the message home.
The trick is to form relationships and alliances with key retailers
to understand where they are taking their brands and, when
Shoppers don’t want to be foiled by clever
possible, to wade into their pool of shopper marketing research.
You don’t want to come into play with a new brand or product that
offers – they respond to straight forward doesn’t fit with your key retailer’s vision. Retailers today are looking
for actionable content, easy-to-read signage, attractive displays and
pricing, value and clear messaging. well-considered design.
When brands and retailers collaborate to offer shoppers what
they want, when they glean direction from useful insights – the
outputs can only be positive experiences and a connection that
extends beyond the till. Short-term promotions will always trigger a
surge, but the way forward is to forge memorable and lasting
Value for instance, will always be a winner. But it is no longer connections that consumers value when there is no promotion.
strictly tied to discounting. For instance, convenience seeking is on The experience is the product after all… 
the rise, “I will pay more if my life is made easier,” said 37 per cent
in a recent poll by TheCheckout. Value can be passed on to
consumers in the form of better or healthier ingredients, loyalty Kennedy Zakeer
rewards, and innovative perks like free parking when you purchase Barrows shopper marketing team & TradeEYE reporter
X brand. kennedy.zakeer@barrowsonline.com
Best practice today is thinking; developing channel strategies,

marketingmix.co.za • vol 28 / issue 1/2 / 2010

 Retail marketing guide

Best retail marketing practices

arketing is never static, and nowhere is this more easily

M seen than in the retail marketing space. Marketing Mix

hosted a two-day workshop on best retail marketing
practices, which covered everything from digital networks, the use
of mobile, category segmentation, merchandising, experiential retail
and the use of analytics.
Keynote speaker, Gwen Morrison, CEO of The Store, says that
consumers’ changing lifestyles has affected the way they shop, and
retail needs to keep up with the changes. She also lamented the
fact that so much time and effort, and creativity is put into
above-the-line advertising, yet when it’s time for a shopper to
purchase the product, uninspired in-store displays can often ruin all
the work that has been put into creating the brand. “The reality is
it’s easier to manage and control TV ads and the online space. The
retail environment, however, is an active space in-store and all kinds
of things can get in the way,” says Morrison.
This is no excuse not to take experiential marketing in particular,
right to the edge. To back up Morrison’s position, Jason Knight,
strategic director, Ogilvy Activation, says that we need to celebrate
and drive creativity in retail as much as we acknowledge and respect
the science. “Media fragmentation and increasing competition mean
that as brands we either innovate or die.” Unfortunately, in South
12 Africa there are few – if any – mind-blowing examples of turning
retail on its head – unlike one Gap store in Canada. The store
turned everything in its store upside down, including its sign and
cars parked outside the shop front to promote its sale.
Knight adds that many so-called limitations that exist in retail
marketing are imposed by the marketers themselves. “You can say
that every single touch point has the potential to connect with the
consumer. There is no need to say that any channel is boring,”
says Knight.

and there is limited opportunity for targeting and CRM. Distribution,

“The reality is it’s easier to manage and
control TV ads and the online space. The
retail environment, however, is an active space
in-store and all kinds of things can get in the
way.” – Gwen Morrison, The Store
This is where technology can play a huge role in innovation,
personalisation and connecting with consumers at every touch
point. Take the voucher and coupons industry. While not as
industrious, sophisticated or as large as the US and UK, for
example, the advent of mobile coupons could change all this.
Paper-based vouchers can be subject to fraud and counterfeiting
tracking and redemption can all be done digitally using a cellphone
and personalisation is a major benefit. Language, for example, can be
tailored and campaigns can be done by region, store and product.
Customer relationships can easily be tracked with the addition of
SMS, mobisite links etc. “It’s a clear and measurable way of
obtaining important CRM information from customers,” says
Chris Rolfe, CEO, Mobilitrix, which has just launched secure digital
vouchers in SA.
The advent of digital vouchers and coupons is especially
important in SA where the majority of lower LSM markets use a
cellphone and also fits in with the advent of the mobile wallet,
which is becoming more prevalent. With many in the lower LSM
market unbanked and/or unable to participate in e-commerce, along
with a very real need for consumers to be able to send money to
friends and family elsewhere in the country or abroad, m-commerce
can provide a much-needed service. There are a number of services
available with Standard Bank’s Mimoney being one of the leaders.
Its mobile wallet, MoWaly, is a simple mobile handset interface to
Mimoney that allows users to check balances, request and send
mimoney, buying goods and other items, > p14

marketingmix.co.za • vol 28 / issue 1/2 / 2010

 Retail marketing guide
>> p12
and services such as credit card generation, are in the pipeline.
However, as John Campbell, business manager, Beyond Payments,
notes: “Only big brands will successfully launch mobile wallets,
which are a great CRM tool with the ability to sell online products
such as airtime, which offers a huge market.”
The move to mobile wallets in the lower LSM market will take
time, so in the meantime, point-of-purchase activation strategies
are still key for purchasing goods. Coca-Cola has been one of the
most successful brands in appealing to the lower LSM market and,
according to Tony Lewis, director, TL & Associates, it’s due to
Coke’s OBPPC – occasion, brand, pack, price and channel. He says
that once the OBPPC is developed, a brand has much better
insight into its consumer. Using OBPPC, Coca-Cola has found the
right locations, most impactful communication, the right in-store
support and most relevant product for its different consumer
categories. “Consumers and shoppers are willing to buy products if
offered an understanding of the purchase or consumption occasion;
the brands they want; the package that suits their needs; a price
they are prepared to pay for the occasion with the right place,
delivering the right experience,” says Lewis.
14
“It is possible to sell green to everyone and it
can be done through point of purchase. Get
your product first into a category with a focus
on the products USP and stop aiming for the
‘green segment’ specifically.” – Tracy Allen,
Builder’s Warehouse
Understanding the consumer occasion is imperative – which
product is bought at which time, at what venue and by whom – as
there are many types of shopping occasions such as quick mission,
on the go, pantry stock up etc. The consumer need state,
consumption timeframe, purchase frequency, brand portfolio,
consumption location and competitor brands also play a role in the
rules of engagement, that is the availability, space, merchandising
and pricing of a product. On top of this, merchandising and
messaging should be dictated by the local environment and LSM
levels. Coca-Cola, for example, has in-store activation that differs
between different tiers: Tier 1 has only pricing posters with
affordability as the main theme; tier 2 has only pricing posters with
great value as the main theme and tier 3 has only pricing posters
with recommended selling price.
Going one step further, in terms of merchandising and up the
marketingmix.co.za • vol 28 / issue 1/2 / 2010
LSM scale, using the example of Best Buy in the US, Morrison
notes that it is a prime example of using shopper research to
segment shoppers –and then actually applying the results in a
physical store. “All too often marketers have a lot of knowledge but don’t
do anything with it! Best Buy, on the other hand, created hubs within
its stores based on their highest value customers,” says Morrison.
It is this concept of personalisation that has come to the fore in
marketing, brought about by the introduction of technology and
changing consumer behaviour. Retail marketers must also rethink
the actual concept of stores to become more hands-on – the Apple
stores are a prime example, and the latest trends include homeware
stores in the US offering in-store cooking classes, for example. “You
can’t change mood, mission type, time, store/brand loyalty and
expectations for shoppers, but you can alter the environment,”
agrees Craig Henry, head of Trade Marketing, Cadbury. “There are
simple point of buying drivers: be in a relevant location; make a
category logical and easy to shop, optimise the placement and
impact of key brands; ensure optimal SKU coverage; manage price
and target promotions,” adds Henry.
One store that has begun looking at these principles and
revamping its in-store merchandising is Woolworths. The brand has
one distinct advantage in that it only advertises its own products,
but basic principles still apply. According to Andrew Levermore,
director of Stores, Woolworths, merchandising should engage,
demonstrate a reason to buy, provide a feel-good factor, offer
volume (where appropriate) and show clear value. Levermore says
that engagement is vital, particularly with some product categories
such as fresh produce. With the introduction of new products,
tasting is important. Woolworths is now offering recipes at the
shelf edge where produce is part of the ingredients; its own custom
magazine Taste is opened at the correct recipe page next to produce,
for example. “Big displays of volume products work and clear value
is more important than ever considering the economic climate,”
adds Levermore.
Woolworths also offers co-products cross-merchandising (pizza
cutter next to the pizza shelf, bottle opener next to the wine) and
meal solutions such as a braai solution, picnic solution. “They are a
no-brainer additional purchase. Very simple ideas but they certainly
help when it comes to selling add-on products in-store,” says
Levermore. He also points out that most signs in-store do not make
life easier for the shopper. To this end, Woolworths is revamping its
signage (eye level not hung from the ceiling) in order to make it
easier for customers to navigate around the store.
Levermore also points out that retail must start going ‘green’.
Woolworths offers energy-saving light bulb disposal bins (so do
other retailers), but also conveys its green credentials through
offering consumers information on which fish is eco-friendly, for
example. “Once our children become the next generation of
shoppers and consumers, the retail industry better be ready,” he says.
Tracy Allen, strategic brand manager for Builder’s Warehouse,
takes the green issue further, saying that green is becoming the
norm although the overwhelming majority of consumers buy from
need, not because a product is green. However, there is increased
awareness in the general population along with products that are
evolving to connect with thoughtful spending: reduce your energy
and water bills, reuse etc, are becoming more prevalent. “It is
possible to sell green to everyone and it can be done through point
of purchase. Get your product first into a category with a focus on
the products USP and stop aiming for the ‘green segment’
specifically,” says Allen. 

Retail recovery
down under
he retail landscape down under is big
T business and like in many other
countries, serves as an effective
barometer of business health.
Judging by the 0.4 per cent hike in retail
sales in November 2009, the best in eight
months, there seems to be some light at the
end of the proverbial tunnel; a point not lost
on economists and journalists, all of whom
have undoubtedly been looking to report
some good news after the bleak global
financial crisis (GFC) last year. This is a
sentiment recently echoed by the influential
and laconic Australian retail magnate and
chairman of Australia’s largest electronics
retailer Harvey Norman, Gerry Harvey:
“The retail sector has been recovering
strongly since April last year, and most
retailers will tell you that.” His view is strongly
supported by the performance of Australia’s
largest department store chains Myer Holdings
and David Jones, both of which posted
higher sales in their first fiscal quarter.
As further proof of the sector’s recovery,
Australia’s currency jumped to a one-month
high against the US dollar as a result of
consumer retail spending. This gentle upswing
in retail sales was very much supported by
the local (and different to the South African
brand of the same name) Woolworths brand,
which is central to the Australian retail
industry and ranked 22nd biggest retailer in
the world. It has maintained its three-year
growth curve in sales, earnings and market
share. Plus, with the performance of its
liquor business flagship brand Dan
Murphy’s and the Discount Department
store chain Big W passing its rivals Target
and Kmart, the retail landscape looks very
promising. This is further assured by the
recent announcement by Woolworths
Australia that it and its one-third joint
venture partner, US retailer Lowes, plan to
invest in the region of AUD$2 billion
(R14 billion) to build a 150-store national
network out of its recent acquisition of
Danks Holdings wholesale hardware chain,
so that they can compete head-on with their
formidable competitor Bunning’s Warehouse.
With more than 77 000 retailers across the
nation, managing over 200 000 retail outlets
and turnover in excess of AUD$200 billion
Expert opinion
(R1.4 trillion) in annual sales, the sector
plays a significant part in shaping the
country’s future.
Like their peers in South Africa, Australian
retailers watch and follow global trends,
adopt tried and proven retail tricks, are
fuelled by the usual seasonal promotional
periods, run similar promotions and even
have their own version of lay-bye. The one
‘unique’ thing that the country has is its
own version of the US retail gold mine,
Thanksgiving. Known as Australia Day and
celebrated at the tail-end of the traditional
January sales. On 26 January, the country
goes into overdrive with a plethora of
patriotic promotions and pocket-saving
prices and discounts; all designed to
breathe life into what is usually a quiet
period post the traditional Christmas retail 15
meltdown.
One of the reasons the retail sector
serves as an important economic herald and
prophet is because it’s the biggest employer
in Australia, accounting for 50 per cent of
all adult employment in the country. Thus,
a great deal rests on its shoulders and its
impact on unemployment, inflation and the
currency market is always profound. So
when the retail sector starts to sing, the
whole country tends to get excited.
With an additional 99 500 new jobs in
the three months through November last
year and a small (0.1 per cent) corresponding
drop in the jobless rate to 5.7 per cent in
November, there is much to celebrate
down under. While the country was one of
the few in the world to largely skirt last
year’s recession, an ironic benefit of its
geographical location, government policies
and fiscal initiatives; the marketplace was
not totally immune from the effects of the
GFC. The recent 1.5 per cent growth
forecast for formal retail sales in SA by the
Bureau of Market research (BMR) at
UNISA, it would seem that Australia
might share a number of common traits
with SA, which shouldn’t be ignored. These
should give further hope to economists Richard Duncan
around the world. Perhaps I’m just an The Partnership, Sydney, Australia
eternal optimist and drink from the glass
+61-411-549-791
half full, but it certainly makes life a darn
richardd@thepartnership.com.au
sight more fun and worth living!
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 7 day [b]itch
Matebello Motloung
Media and advertising writer, Financial Mail
04/01/2010
It’s 5.30am and I’m on the road; first day
back at work. Waking up was a drag, finding
something to wear was even worse. Mental
note: I’m going back to gym. Then I stop at
McDonald’s and grab two coffees. I’m
tempted to get a muffin too. I arrive at the
office, and as expected, no one is there. I
start with my Monday morning ritual –
chatting to my aunt in Durban. As usual,
we always have a good laugh. My desk is as
I left it – stacked with newspapers, maga-
zines and annual reports. I decide to catch
up on what’s been happening. At 8.30am, I
get a call from my sister to find how my day
is so far. It’s too early to tell. It’s 9am and
my colleagues are beginning to arrive. It’s
good to see everyone.
16 05/01/2010
The life of deadlines and headlines has
definitely begun. We are busy working on
our annual January ‘Hot Stocks’ cover.
Thank goodness I sent my copy before
going on leave. The features editor informs
us that he’s short of stories. I scrounge
around for an idea. Got it! The ABC’s
newly introduced rule allowing publishers
to include copies sold at less than 50% of
the original cover price in their certificates.
I chat to Starcom Mediavest’s Gordon
Patterson about it. As usual, he’s of great
help. I write the piece and send it through.
My day was better than I thought it would
be. I leave the office at 4pm. Can’t wait to
get home.
06/01/2010
I’m not having a good day at all. It’s
deadline day and people are losing their
sense of humour. Tempers are rising,
including mine, and my section head is
breathing down my neck. Finally, the gods
smile down on me and I send my piece
through and reward myself with a slab of
chocolate. I go have coffee with a friend.
Back at my desk I find a box of chocolates
with a note: Happy New Year! I’m smiling
ear to ear. I leave the office at 8pm. No one
leaves the office at the FM without having
proofread all their own articles and signed
the final printouts. I feel like another slab
of chocolate.
marketingmix.co.za • vol 28 / issue 1/2 / 2010
07/01/2010
I’m standing at the bottom of the steep hill
in Dobsonville trying to psych myself up
to run up. Damn, the Christmas pudding
and the wine. “Masiye my sister” (Let’s go
my sister), I hear a voice say behind me.
It’s one of the guys I see jogging regularly.
I try to protest but he won’t have it. He
offers to jog with me. “We will take it
slowly,” he says. I’m too embarrassed to
turn him down. Two kilometres later, I
think I’m going to pass out. Another
kilometre and I can’t feel my legs. It’s
6.15am and we’ve been on the road for 40
minutes. I put my foot down. I refuse to
go on any further. Going back is easier.
The road is downhill. On my way to work,
I stop at Westpark Cemetery. It’s my
mother’s birthday today. She would have
been 65. I leave flowers on her tombstone.
It’s the beginning of a new week at the
FM and I have not included any story ideas
on the diary system. I decide not to stress.
Something should come up. It always does.
I make a few calls.
I write the piece and
08/01/2010 send it through. My day
Waking up to go jogging was a drag. I do it
anyway managing 3km. Get to the office at was better than I
9am. I’ve decided to write an article on the
2010 FIFA World Cup and whether media thought it would be. I
and advertising still think it will cure their
financial woes. I get a call from Exclusive
Books in Rosebank. The GMAT exam
leave the office at 4pm.
book I asked them to order is ready. It’s
5.30pm and the office is now almost empty. Can’t wait to get home.
Traffic to Soweto shouldn’t be that bad.
I’m tired. Thank God it’s the weekend.
12/01/2010
11/01/2010 I managed to run 6km this time and I’m
It’s 10am and I’m stressing because I’ve pretty chuffed. I get to the office and the
not been able to find people to comment buzz is different. Most people are back
on my 2010 article. My deadline is in two from leave and it takes me 15minutes to
hours. A reminder pops out. I need to go get to my desk with all the catching up to
pay the registration fee for the PMD course do. Thank goodness all my articles are in. I
I’m doing with GIBS. I write a reminder logon to Facebook to find out what’s on
on a post-it and stick it on my computer people’s minds. Everyone in the office is
screen. Things begin to look up around talking about the Google – China stand
11am. I manage to do two interviews. I off. The SABC is in the news again. I meet
send my piece two hours late. My editor is up with my sister and niece for lunch
not charmed. What a way to start the year. across the street from the office. I leave
I share this with my Facebook pals. They the office relatively early at 7.30pm.
all agree. I feel worse about myself. Hmmm… movies? 
 Brand anatomy
Liberty goes for makeover
eeling old and frumpy just a
18 F few years before turning 50,
Liberty Life did an analysis of
its brand and how it is perceived by
consumers. It came to a realisation that
even though consumers recognised the
Liberty Life brand, there wasn’t a full
understanding of its business offerings,
products and services. It was time for
change.
Liberty set its target on moving from
a domestic-focused life insurance company
to a wealth management company
operating on the African continent and in
other developing markets. Liberty extended
its products and services to be holistic in
terms of a customer’s needs at any given
life stage; with life, health, wealth and
investment all key focus points.
The company’s corporate structure was
revamped to facilitate the group’s new
wealth management growth strategy,
products were also changed to demonstrate
the new brand and business philosophy,
and policy documents were simplified and
reduced from 16 to three.
The name that the corporation had been
known by since its establishment, Liberty
Life, was changed to Liberty. “The reference
to life gave the impression that life insurance
was Liberty’s main source of business. We
wanted to move away from being an insurer
to a wealth company that aims to empower
people to own their lives,” says Howard Fox,
divisional group marketing, Liberty.
marketingmix.co.za • vol 28 / issue 1/2 / 2010
The Own Your Life campaign launched at a time when
the world was reeling from the financial meltdown. “A lot
of thought went into what was going on. At the time of
the launch in September 2009, we were just seeing the
beginning of green shoots – the economy was starting to
grow and giving people hope,” says Fox. He also says the
overall goal of the rebranding is for consumers to see
themselves with Liberty. “Our message is that Liberty is a
trusted financial partner for life.”
Internal branding
However, the major changes within the company, and
internal marketing campaign had to be rolled-out to
employees before the public campaign could begin.
According to Fox, all the departments worked together
to gain an understanding of the new philosophy and
direction that the company was taking, which helped to
improve credibility and strengthen the bonds of trust
between leaders and employees. “This was important as
the global financial crisis impacted negatively on a lot of
people. There were a lot of insecurities – employees were
concerned for their jobs and livelihood.” He says the
timing of the internal marketing campaign was perfect as
Liberty sponsored a lone rower, Peter van Kets, who took
part in the Woodvale Atlantic Rowing challenge in an attempt
to break a world record by rowing solo across the Atlantic in
50 days. “This race is the epitome of perseverance, proper
planning and taking calculated risks. In this way it is a lot
like life, which is why Liberty is supporting Peter’s commitment
to achieving his goals. Liberty is about empowering people to
own their lives, and Peter is an extraordinary individual who
certainly does own his life” says Howard Fox, divisional
director group marketing, Liberty.
 Brand anatomy

The birth of Liberty

Liberty Life was established in 1958 by Donald Gordon, a chartered accountant by profession, with only R100 000. By the end of 1958
it had a total of 83 policies on its books. In 1962 the company was listed on the Johannesburg Stock Exchange (JSE ) with first year
earnings of R32 000 after listing.
Gordon retired as the chairman of Liberty Life South Africa to London in 1999. At the time, the company was said to be the third largest
insurer in the country. He continued working on expanding Liberty International’s portfolio of regional shopping centres to a portfolio
worth around R72 billion.

it allowed everyone concerned to iron out any wrinkles and also air any
apprehensions, which could then be dealt with. “We invited business guru and
media personality Rene Carayol to speak to staff members about the Own
Your Life campaign linking it with personal branding and its value. This
approach is taken when people are united in purpose and know where they are
headed, positive results occur.” In addition, Bruce Hemphill, CEO of Liberty,
personally addressed staff members about the direction that
Liberty was taking.

The new advert

Liberty’s advertising agency at the time, Metropolitan
Republic, was tasked with not only coming up with the new
ad campaign, but also to take the brand to task, revamp it
and ignite the world with a new brand that fully represents
Liberty’s new philosophy. Once the Own Your Life pay-off
line was launched, it was followed by a call-to-action media
campaign motivating the target market to take charge of
their lives. “The whole premise behind this is that if they do
take charge of their lives, then Liberty’s products and services
will assist them, both in the long term and in the short term,
says Peter Khoury, executive creative director, Metropolitan
Republic.
The vision of the campaign is to inspire people to 19
improve the quality of their lives by planning ahead. “The
campaign is based on human truth allowing us to execute
many different ads across all media that spoke to the
different needs of different consumers, at the different
stages of their lives. We used marriage, child birth, a first
home buy, a bigger home buy and retirement as a way to
speak to consumers in a way that they can understand
and be inspired to take action,” says Khoury.
Fox adds: “This campaign takes a fresh angle on how
we all live our lives, and demonstrates that if we take
charge of our lives and plan ahead, we can live the life
that we want.”
The television ad shows a timeline of photos of one
man’s life from birth to death and how he fulfilled his
role as a son, a friend, a husband, a father and a
businessman. “We navigate through his life, all the
circumstances he faced all the decisions he made. He
planned for everything, the good times and the bad. The ad is
narrated by the man’s son, who pays homage to his father for
the life he chose to live. The down-to-earth tone throughout
television, radio, print and outdoor really demonstrates the
positives of planning ahead, regardless of income or social
status,” says Khoury.
Fox says: “The advert is aired on all SABC TV stations,
e.tv, M-Net and DStv to reach a wide audience across all
demographics in SA because Liberty’s target market is every
South African who has money to invest.” Interactive
competitions using various characters on radio that highlight
some of their own life moments are used to engage with
consumers and create an emotional connection to the brand.
The outdoor campaign includes street-pole advertising and
billboards that reflect the comprehensive health, life and
investment solutions of the group. 

vol 28 / issue 1/2 / 2010 • marketingmix.co.za

 Magazines

Magazines – above and beyond print

Print advertising revenue has been evaporating for some time now, thanks to the Internet, forcing it to go digital in order to stay
relevant. The global financial crisis also affected the publishing industry through ad spend and circulation figures. Has the magazine
industry weathered the storm? Will the much-anticipated World Cup bring much-needed oxygen in the form of ad spend? Will Apple’s
much-hyped latest gadget mark a watershed and accelerate the take-up of paid-for multimedia content. Or is it just something for
the geeks? Marketing Mix caught up with magazine industry players to get insight on the state of the industry.

John Relihan, CEO of Media24

Magazines

Marketing Mix: What will the local magazine industry look like
this year and beyond?
John Relihan: We appear to have weathered the economic storm
20 fairly well, but not without some casualties in the form of fluctuating
circulation and advertising levels. This recession might’ve been a
wake-up call, but there are far bigger factors at play that are bound
to change the face of magazine publishing, for example, the migration
online for a bigger choice of leisure and entertainment. There has
also been growth in demand from consumers to be able to access
content where, when, how and on whichever platform they want.
Nevertheless, I do not foresee any major changes and/or shake-ups
in the composition of publishers’ portfolios in 2010. Rather, this is
expected to be a year of consolidation, innovation in publishing
across multiple platforms, of leveraging the strength and equity of
the more mature brands and fine-tuning the value proposition of
titles aimed at the emerging market. I remain very positive about the
future of magazines. We have the advantage of learning from the
mistakes and developments in more developed markets before the
trends hit our shores. We used to have about a three to five year lead
time, but technology has shrunk this considerably. The agility to
adapt and respond to the changing market will be key for survival
and growth.
MMX: Despite the reduced ad spend what other challenges did
the industry face in 2009 and how can it learn from that?
JR: Although the trading conditions might’ve been challenging in
2009, I think 2010 will actually be a year of the real challenges for
magazines, among them:
 Reverting to rate-card rates after the discounting game that some
publishers employed when the going got tough
 Getting digital right and gearing for the growth in mobile
Internet usage
 Finding alternatives to the traditional publishing model and
generic revenue streams to compensate for loss of income to
digital media
 Remaining relevant in the media mix by clearly defining target
audiences.
MMX: Publishers are struggling to come up with business models
for online content – do you think a remedy can be found soon?
JR: The debate around paid and free content online will remain until
somebody comes up with a perfect solution. I think Apple’s iPad
might just be that solution, together with the e-reader joint project
of five major publishers in the US. Only replicating magazine
content online is not the solution; we need to move beyond
the constraints of magazine pages and develop experiences that
are both true to the brands and tap into those components that
cement the respective title communities. Players in the US
market that are successful with paid-for online content models
agree: people are willing to pay for truly premium content,
aggregated and otherwise.
MMX: What is the main driver of magazine readers’ engagement?
JR: Content. Content. Content. And even more so if packaged
in a visual language that entertains and informs. The magazine
experience is deeply personal and readers build an emotional
relationship with their title(s) of choice. As long as we continue to
produce compelling content, we will continue to build loyal reader
communities that are also attractive to advertisers.
MMX: Do you think the magazine industry caters well for the
emerging markets, if not how can the gaps be filled?
JR: There has been exponential growth in this sector of the market
over the past two to three years. The existing range of titles aimed
at this market is fairly diverse and does cover all sectors. In addition,
some of the mature ‘traditional’ titles have also been experiencing
growth in multicultural readership. I do not expect to see the
emergence of a flood of niche genre titles, such as home interest,
food or health, published exclusively for the emerging market.
Publishers might rather be investing in making their titles more
relevant for and representative of multiple consumer markets.
MMX: Where do you think growth areas in this industry will
come from, could it be from new titles being launched?
JR: I think it is unlikely that we will see any major launches of new

marketingmix.co.za • vol 28 / issue 1/2 / 2010


local titles over the next year. The women’s interest sector remains
heavily fragmented, despite the number of closures over the past few
years. Any new titles will in all probability follow the global pattern
of big international publishers launching licensed brands into devel-
oping markets. However, success is highly dependant on how the
content is translated into the local context. South Africans are firm
believers in ‘local is lekker’ and they vote at the tills. There might
still be some gaps in a few niche environments, but very few of them
can sustain a flood of new entrants. For the next year or 18 months,
I expect the only growth to come from mature titles launching
standalone brand extensions in print and otherwise. Also, more
consumer publishers are venturing into customer publishing – one
of the few sectors to have withstood the economic downturn really
well and which are reported to be on a good growth curve in
developing markets.
MMX: Are magazine readers changing and is the industry changing
with them or doing anything to tap into the new consumer?
Andreline van Tonder: Looking at the latest readership figures it’s
clear that there are more black readers entering the market and reading
our magazines. Black readership across all Associated Magazines’
titles, including Cosmopolitan, Marie Claire, House and Leisure and
O, the Oprah Magazine are on the increase. It indicates that a new
market ofreaders is forming and that they like what they see in our
magazines. Media consumption in general is changing with younger
consumers preferring to engage with various different media platforms,
including magazines. We are experiencing a total integration of
media and we are already delivering our trusted content on various
platforms, including the Internet and mobile, but with the print
versions of our respective magazines driving the brand experience.
MMX: What would you attribute, not only to your own growth,
but the overall upward trend for the local magazine industry?
AVT: Magazine content evolves constantly. Today, we have more
magazine titles to choose from than in the past. As our country
becomes more literate and educated, more people want to read
about the world they live in – and magazines deliver that in a
unique manner.
MMX: Distribution is one (rather important) piece of the puzzle
for magazines. Are you looking at new and interesting distribution
methods as a way of changing the way magazines operate?
AVT: We are constantly investigating more cost-effective, innovative
and alternative ways to deliver our content to our reader
communities. The magazine print form is just one such channel.
Our international partners keep us up to date with the latest
innovations overseas. We want to make it easy for our readers to
Magazines
MMX: Any plans to expand Media24 portfolios?
JR: We are already very well represented in all the genres.
Nevertheless, any publisher worth their salt would always keep
their eyes open for potential opportunities that would contribute to
sustainable future growth.
MMX: Media24 recently bought the specialised magazine division
of Primedia Publishing, which includes about 17 titles. What
necessitated the move?
JR: We consider the acquisition to be of strategic value and
the portfolio of business titles is a good complementary fit to our
portfolio of predominantly consumer titles. The economy is bound
to recover and we expect this already strong and healthy business
unit to follow.
Andreline van Tonder, associate
publisher for Associated
Magazines 21
find our content and engage with it, whether it’s in print form or
electronic form such as Kindles or an Apple iPad.
MMX: Brand experiences are a powerful way for brands to engage
with consumers, and possibly also, to drive loyalty, is that statement
true?
AVT: Brand experience is the driving force behind brand loyalty. At
Associated Magazines we realised many years ago that our brands
need to come alive and deliver a unique experience for our readers.
Our reader events and activation support the overall positioning of
our brands and further enhance the experience of the brand. For
example, the Cosmopolitan Sexiest SA Men calendar was the first of
its kind in South Africa and today is not only a sought-after calendar
but readers partake in the voting process and get the opportunity to
attend one of South Africa’s leading social events, the Cosmo Sexiest
SA Men party.
Another example is O, the Oprah Magazine, where we have the
unique opportunity to host reader events with one of the world’s
most influential icons, Oprah Winfrey. We are also the only
magazine in South Africa that can offer our readers the opportunity
to attend The Oprah Winfrey Show in Chicago, allowing our readers
to truly experience the bigger brand, which is Oprah. We are all
about creating communities through our content.
MMX: Are you looking at integrating digital media fully with
mobile campaigns, mobisites, smart phone applications, online
and social networks as a way to engage with readers, extend your
brands and offer integrated advertising solutions?
AVT: We are no longer just magazine publishers, but content
providers across multiple attractive platforms with various channels
to our advertisers that can be measured. Our readers interact with us
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Magazines
via mobile, the Web, events and magazines. Strong brands that have
these platforms will survive the recession. Content is king and should
be relevant to readers and fulfil their needs. A magazine brand is a true
brand religion – it creates a sense of belonging to a community, is your
best friend, has a clear, holistic view of life, tells stories, gives reliable
advice, creates change and has strong principles and opinions.
Cosmo’s readership has grown during the recession because readers
trust the brand.
MMX: What is your take on the new ABC 50 per cent rule?
AVT: The amendment to the 50 per cent rule might have some
benefits to help drive circulation, but we’re not planning to change the
way we do business. Print and production costs are expensive and we
simply cannot afford to discount our magazines any more than we
already do for the sake of circulation. We also believe that if a reader is
willing to pay a decent price for a magazine it’s because they see the
value attached to it. If you discount your brand too much you devalue
it, your readers will feel cheated and your profit margin will become
22
MMX: Do you think the 2010 FIFA World Cup will be the answer
to most publishers’ prayers?
Mike Eilertson: It is going to be an amazing year and I believe
publishers will definitely benefit from it, but the financial crisis has
presented larger opportunities than even the World Cup as it has
streamlined media channels.
MMX: Do you think South African publishers will ever find a
winning formula integrating new and traditional media into their
business plans?
ME: They have to. The formula publishers use has barely changed in
over 80 years which is absurd, and was also taken directly from
overseas markets and not adapted to our own. Just in our segment,
LiveOutLoud has broken every publishing norm, and this has been the
key success factor in integrating the different segments.
MMX: LiveOutLoud caters for the high net worth market, any
chance of extending the brand to cater for the emerging market,
SA’s growing middle class?
ME: No, in order to be successful you have to have a strong sense of
self and can’t cater for everyone’s taste and preferences. LiveOutLoud
is for the mavericks of industry, those who dared to be different and
made a name for themselves. We have other publications that cater for
the more inspirational market.
MMX: Brand experiences are a powerful way for brands to engage
with consumers, and possibly also, to drive loyalty. What strategies
would you say worked best for you to make the LiveOutLoud
experience worthwhile?
marketingmix.co.za • vol 28 / issue 1/2 / 2010
non-existent. In today’s tough economic environment one simply
cannot afford to build a business on low profit margins.
MMX: Looking ahead, do you think 2010 will be a good year for
the magazine industry?
AVT: I think 2010 will be a very challenging year for the magazine
industry, but there is light at the end of the tunnel. As retail slowly
starts to recover, we believe we should see better circulation figures
towards the end of the year.
MMX: How best can marketers and media planners prepare for
the year ahead?
AVT: The recession has taught us many lessons, and one of them
was to go back to evaluating our marketing spend and to ensure a
better return on investment. When things go well, marketers often
forget about that. Focus on the bottom line, don’t try to be
something you’re not, but take calculated risks and stay true to your
brand promise.
Mike Eilertson, CEO and publisher,
LiveOutLoud magazine.
ME: The strategy that has worked best is that we understood
that LiveOutLoud is more than just a magazine, and extends
beyond the page of print to bring the lifestyle to life. This in
turn created the opportunity for our advertisers to get involved with
our clients on a personal level, creating well-rounded advertising
campaigns. Our clients get the benefits of one of a kind events,
whereever detail is a collaboration of the top luxury brands of
the world.
MMX: Do you think there is a need to revisit the current
distribution methods, or maybe there is a need to change the way
magazines operate?
ME: I do, as mentioned earlier, the industry hasn’t changed for over
80 years and is in need of some clever thinking. We took this
challenge to heart and the answer was the fastest growing exclusive
subscription base in SA in less than six months. Publishers have to
throw away old processes and re-invent the wheel.
MMX: In your view, what is the general state of the magazine
industry?
ME: Old, stale and tired.
MMX: Has the industry been innovative in winning readers and
advertisers?
ME: No, not at all. On the odd occasion you see signs of
brilliance and they reap the rewards tenfold, but the diminishing
number of subscribers as a whole and readers in general show the
state of the industry.
 Suggestions and proposals welcome
Workshop Date

Marketing Direct - Best of the Assegai’s 10 March

4th Interactive Marketing Summit 18 – 19 March
Marketing at Retail Master Class 24 – 25 March
JustTouchIT - Interactive Technology at Retail 4 – 5 May
Effective Marketing in Township 12 – 13 May
Fashion and Beauty Marketing at Retail 19 May
Financial Marketing to Lower LSM's 24 – 25 May
Cool Connected - Khuza Awards 27 July
Shopper Marketing Western Cape 28 July
Mobile Marketing Summit - JHB 10 – 11 Aug
Mobile Marketing Summit - CPT 13 August
OTC Pharmaceutical Marketing 24 Aug
Shopper Insights In Action 7 – 8 Sep
CRM Master Class 16 Sep
Liquor Marketing at Retail 28 Sep
MAR at Retail and POPAI Awards 5 – 6 Oct
Digital Guru Master Class 12 – 13 Oct
Luxury Marketing Summit 26 Oct
Sports Marketing 2011-What Next 9 Nov
Mobile Forum (MMA) Nov

2010 D elegate R ates

One day conference Two day conference

1 - 2 delegates 3+ delegates 1 - 2 delegates 3+ delegates
R2 950 per delegate excl Vat R2 650 per delegate excl Vat R5 750 per delegate excl Vat R5 250 per delegate excl Vat
One and Half Day Conference
1 - 2 delegates 3+ delegates
R3 950 per delegate excl Vat R3 650 per delegate excl Vat

Useful c ontacts
Sponsor Contact: Noelene van Niekerk, noelenen@systems.co.za / 011 234 7008
Delegate Contact: Marianne Nzioki, mariannen@systems.co.za / 011 234 7008
Speaker proposals: Terry Murphy, terrym@systems.co.za / 011 234 7008

For more information visit www.marketingmix.co.za

 Community media
Local still relevant
y virtue of its nature, community media is a mirror and
B content hub of the community it aims to serve. Its ability to
reach into niche communities makes it an affordable and viable
medium for advertisers to communicate with its target audiences
within particular geographic areas without much wastage.
The more targeted approach makes room for campaigns to be
altered according to geographic zones; this means that even the
smallest budget can deliver to targeted audiences. “Marketers and
planners need to understand the different nuances between areas
like Sandton and Constantia, and understand why their approach
to Edenvale should be different to that for Alberton. This level of
micro marketing will ensure that all the ‘parts’ work together to
make the ‘whole’ a success,” says Chris Botha, joint managing
director, The MediaShop.
Much of this information can be gleaned from the ROOTS survey
from the Newspaper Advertising Bureau (NAB), which is an urban
retail and readership consumer research survey. The ROOTS survey
aims to provide media planners, marketers and advertisers with useful
insights on consumer buying habits from retail, furniture, fast food
and shopping centres. “The trends will be invaluable for marketers
and advertisers as it will clearly depict how areas have changed and
how shopping habits in particular have developed and how shopping
habits in Soweto have been influenced by the opening of Maponya
Mall, for example,” says Lynne Krog, research manager, NAB.
marketingmix.co.za • vol 28 / issue 1/2 / 2010
There has been a lot of infrastructural and commercial development
in areas such as Soweto and Tembisa setting standards for economic
growth. These developments have created the right conditions for
community media to operate within the previously disadvantaged
areas. In Soweto, “the building of four major shopping malls, Protea
Gardens, Bara, Jabulani and Maponya Mall have notably changed
consumer purchasing behaviour in the area and benefited not only
Jozi FM but other community media companies that operate within
the area. Soweto houses major institutions that employ a lot of
people from the area and has opened new opportunities for Jozi FM
as retailers scramble to get to consumers,” says Nono Mcunu,
station manager, Jozi FM.
Even though community media is thriving and enjoying growth,
it has had to face insurmountable odds. In particular, community
broadcasters have had to overcome obstacles and turn the economic
tables around to make the best of the non-commercial model
required by the Independent Communications Authority of South
Africa (Icasa).
TV
The regulator requires community broadcasters, radio and TV to
generate their revenue through paid-for advertising, ICASA has the
responsibility to limit the amount of national advertising on
community broadcasters, however, this hasn’t necessarily been
implemented. For Cape TV to overcome some of the problems it

Top 10 community radio stations (RAMS Nov 2009)
Station Province
1 Jozi FM Gauteng
2 Unitra Community Radio Eastern Cape
3 Alfred Nzo Community Radio Eastern Cape
4 Radio Tygerberg Western Cape
5 Radio Khwezi KwaZulu-Natal
6 Qwaqwa Radio Free State
7 Voice of Cape Western Cape
8 Thetha FM Gauteng
9 Zibonele Community Radio Western Cape
10 Mosupatsela FM Free State
experienced during its teething stages it partnered with various
organisations to assist with much-needed operational infrastructure.
“Our principal partner, the South African School of Motion Picture
Medium and Live Performance (AFDA), provides Cape TV with
free office space, as well as access to its television studios, equipment
and student operators. In return, Cape TV provides these students
with experience in a real broadcast environment as well as some
mentoring and lectures,” says Mike Aldridge, broadcast manager,
Cape TV.
“The model under which we are required to operate does not
hinder us at all; we believe this to be an advantage to public service
broadcasting. We are fostering partnerships with government and
other institutions to build a diverse financial support base for
community broadcasting. Donations from the public are another
source of income. Cape TV staged its first fundraising telethon in
2009,”says Aldridge.
Despite the hindrances faced by the TV
stations, community TV in South Africa is still
relatively new and Soweto TV and Cape TV
are proving to be forces to be reckoned with.
Despite the hindrances faced by the TV stations, community TV
in South Africa is still relatively new and Soweto TV and Cape TV
are proving to be forces to be reckoned with. So far there are only
three licensed community TV stations in South Africa: Soweto TV
and Cape TV with Tshwane TV the newest addition. According to
Community media
Past seven days Nov 2008 Past seven days Nov 2009
560 000 566 000
375 000 343 000
32 000 317 000
312 000 307 000
132 000 274 000
211 000 237 000
205 000 220 000
227 000 211 000
208 000 207 000
129 000 196 000
SAARF data, Soweto TV boasts viewership of 1 622 180 for the
period June 2009 and July 2009 while Cape TV had 463 480 for the
same period.
When Soweto TV was first given the go ahead to be on air, it was
only granted a short-term licence, and that according to its managing
director, Tshepo Thafeng, “gave us a lot of headaches, because at
first we had operational issues we couldn’t start broadcasting
immediately after receiving broadcast licences we needed to first
get facilities, then go out and get advertising.” Advertisers were 25
reluctant to come on board because “we couldn’t guarantee them
that we would still be available in the long run. They wanted
long-term engagement, which we could not guarantee because we
only had permission to operate for a short time,” says Thafeng.
Icasa recently granted Soweto TV a class licence, permitting the
station to operate for seven years, “this will assist us to turn the
economics around, because we can now plan for the long term. We
are still waiting for the rules and regulations for the class licence
from Icasa. I am very excited that we have this licence, we can
now start making long-term strategic plans, which will include
advertising and marketing, and how to turn the viewership numbers
into currency for the station,” says Thafeng.
Community radio
Community radio has come a long way and settled down. In the
early days, it relied on volunteers to function. It is able to retain
staff for longer and generate revenue despite the economic
downturn. Simon Milne, media manager, the Media Connection,
describes “community radio as a sleeping dog that is under utilised,
it commands 20 per cent of the radio listeners’ pie, 7.2 million
listeners, who listen to over 90 radio stations broadcasting in all
11 official languages. Community radio reaches into niche
communities, has great influence and is at the hub of the community,
a perfect fit for listeners, advertisers and marketers. Boxer
superstores and Shoprite, for example, stood up and took note,
because their businesses depend on this market.”
He acknowledges that there is still a need for skills training in
areas such as business management, marketing, brand management
and governance. Milne says there are plans to build the image of the
sector through capacity-building projects and engagement with
strategic partners.
Jozi FM, which broadcasts from Dube in Soweto and is one of
the most successful community stations in the country, managed to
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Community media

Top 10 free newspapers (ABC July-Sept 2009)

Net distribution Corresponding previous period

1 Eastern Express 144 442 New member
2 PE Express 89 793 89 798
3 Plainsman 83 504 83 504
4 People’s Post Mitchell’s Plain 83 340 83 340
5 Vukani 81 160 81 160
6 Algoa Sun 76 170 76 154
7 Vaal Vision 68 652 64 908
8 Maritzburg Sun 68 425 68 361
9 Randburg Sun 66 733 60 658
10 The Mirror 65 100 64 894

turn the economics around and tapped into the local economy
without relying on donor funding. Jozi has grown to become the
largest community radio station in the country (566 000 RAMS
Nov 2009).
Newspapers
Community newspapers can somehow be classified as a communications
medium for the retail and wholesale industries. It is supported by
26 the knock-and-drop model, which draws and guarantees regular
readership for newspapers. “For most categories of advertising,
research shows community newspapers are, by a long shot, the most
viable medium for advertisers to communicate with their target
markets. There is nothing new in this and we’ve no reason to suspect
advertisers don’t see it this way or have changed the way they see it.
The data show that nine out of 10 readers of a community paper
claim that they find the advertising in their paper useful,” says Bruce
Sturgeon, chief executive officer, Caxton Community Newspapers.
Caxton Urban News publishes up to 30 000 newspapers a week to
areas such as Diepkloof, Orlando, Pimville, Protea and Dobsonville
and other micro-geographic regions that have their own identity and
local news. “Considering the economic conditions at present, we
think our papers in areas such as Soweto have progressed well. We
researched 10 areas in Soweto and average issue readership overall
sits at 61 per cent, it does vary between areas: Zola is at 58 per cent
with 78 per cent in Diepkloof,” says Sturgeon.
According to Sturgeon, recent research shows readership of
Caxton’s free newspapers generally remains as high as ever and has
improved in some areas over the past few years. “The data show that
the average issue readership of community papers has increased in
Gauteng, Durban and Cape Town from 2007 to now. Gauteng is at
67 per cent to 69 per cent, Durban 70 per cent to 83 per cent and
Cape Town 68 per cent to 72 per cent,” he says.
Sturgeon says reader profiles have remained much the same, and
are expected to continue in that manner at least until the economy
and the property market pick up and people start to move around again.
Magazines
Even though MyWeek magazine has closed shop, Get IT,
Homemakers and Inside Out have a net distribution of 1 191 069
(ABC July to September 2009) and can still be integrated into other
platforms to deliver relevant, lifestyle-entertainment info to
communities. Their strategic value comes from the fact that they are
available free of charge, yet are also able to serve as a tool through
which publishers can engage with communities.

Top 10 free magazines (ABC July-Sept 2009)

Net distribution Corresponding previous period

Joint 1 Home Talk Johannesburg
Homemakers Fair Johannesburg 229 550 232 500
Joint 2 Home Talk Pretoria
Homemakers Fair Pretoria 119 615 122 000
Joint 3 Home Talk Cape
Homemakers Fair Cape 115 110 115 849
4 Get It Cape Town 30 311 New member
5 Get It Northern Suburbs Joburg 30 153 New member
6 Get It Ballito to Umhlanga 25 136 20 103
7 Get It Joburg South 24 530 24 540
8 Get It Joburg West 24 490 24 074
9 Get It Pretoria 24 389 New member
10 Get It Joburg East 23 646 New member

marketingmix.co.za • vol 27 / issue 11/12 / 2009

 Advertorial

DMA SA Launches
121 Club
Membership for Individual Direct Marketers

he Direct Marketing Association of South Africa has launched the 121Club – www.dma121club.com – giving individual

T direct marketers the opportunity to join the professional industry association in their individual capacities but still
enjoy the benefits afforded to corporate members.
“Given the number of responsibilities that marketers need to juggle on a daily basis, many will think long and hard about
joining a professional organisation and committing their time to yet another business activity. However, being part of a
professional body for individual direct marketers such as the 121Club brings with it critically important benefits in terms of
professional career development, exposure to and alignment with best practice trends, business opportunities and
28 networking,” says Brian Mdluli, CEO of the Direct Marketing Association of South Africa.
“In particular, given the complex legislative landscape dominating the direct marketing industry at the moment and which
will have a fundamental impact on the manner in which DM practice is implemented and conducted, being part of the DMA’s
121Club provides absolutely critical insights, guidance and interpretation of these laws. Joining a professional body such as
the DMASA through the 121Club means that individual members now have access to some of the best minds in the industry
from various perspectives including legal and financial, creative and strategic, database and analytics and more. This is where
the true value of being a member of an industry association comes to bear,” adds Mdluli.
But being a member of an industry association as vocal and active as the DMASA also calls for proactive engagement and
participation from the member. “The core purpose of an industry association exists for the betterment of its members in
terms of conducting their business in a manner that is professional, fair, ethical and to the overall betterment of the entire
industry. But some onus also lies on the member. Simply showing up once or twice a year to a meeting will not help you get
to know the other members of the group. It is at the committee level where the real networking occurs and where you will
develop deeper relationships with other members of your association and realise its true value,” explains Mdluli.
And it’s exactly this value that the 121Club aims to bring to its members. “These benefits usually come at a price not
affordable to individuals, however the 121Club brings all these benefits to consultants, direct marketers and SMMEs at a
fraction of corporate membership. You’ll make valuable professional contacts and gain access to a wealth of useful information,
exclusive online resources, discounts on education and training programmes, conferences and seminars, special offers from
our DMA members on products and services and early notification of important announcements and events. But most of all,
you will have the backing of an industry association that has significant political and legal clout and can help you navigate the
ever-changing DM landscape,” concludes Mdluli.
Joining a professional organisation is beneficial for your own professional development and the future of your business.
The connections you’ll make, the resources made available to you and the ideas and advice you’ll discover represent an
outstanding return on what amounts to a modest, manageable investment of time, money and effort. It could turn out to be
one of the best things you could do for yourself and your business.
Powered by

For more information on the 121Club

go to www.dma121club.com

marketingmix.co.za • vol 28 / issue 1/2 / 2010


How easy is it to overturn
the loyalty effect?
eaders who truly understand the loyalty
L effect will continue to enjoy success
stories, despite changes and new
influences that the customer is exposed to.
I have been living in Cape Town for 13
months, after an entire lifetime in
Johannesburg. I thought I would take stock
of my own ‘loyalty’ behaviour since my
move and check to see what types of patterns
have emerged, changed or disappeared.
Firstly, my airline loyalty has without
doubt shifted. Flying locally (Durban and
Johannesburg) for personal reasons has
increased, which meant that I really did need
to shop around. I choose BA whenever I
can; I like its offering, the planes and its
service from start to finish. Mostly though I
like the fact that by paying with my Investec
card I can make use of its airport lounges
and earn dividends points. This gives me a
double dip in earning BA Miles as I earn for
flying and can convert my dividends. I have
therefore increased my loyalty to Investec
and to BA.
My loyalty to coffee shops has shifted
dramatically. In Johannesburg I only went to
the coffee shop around the corner from my
office, virtually every morning. It had no
loyalty card, but greeted me by name, served
me quickly and treated me and its other
morning regulars like royalty. Now I am still
struggling to find the ‘right one’. When I
lived in Sea Point I tried 10 coffee shops to
find one which suited me, I eventually chose
one in Green Point, joining its loyalty
programme and every so often had free coffee.
Then I moved down the road to Mouille
Point and discovered two coffee shops with
a view of the sea. So without even thinking
about one free coffee every two months, I
simply stopped going to the Green Point coffee
shop; the overall offering wasn’t compelling
enough for me to keep going there.
I loved the Virgin Active gym in Melrose
Arch, and was inherently loyal to it and to
my Discovery Vitality programme. I tried
two of their gyms down here in Cape Town,
and hate both. When my membership
expired, I never renewed it, and sadly my
Vitality status has dropped to blue. I examined
the whole Vitality offering and realised that I
really don’t use it much and have every
intention of cancelling my membership.
Saving the monthly fee will pay for my yoga
Expert opinion
classes at a small centre. Transactional
loyalty is no longer as easy to garner from
your customer as it used to be. There are
more shopping centres to pop into than
ever before. If your loyalty was to Clicks
and there is now a Dis-chem much closer
to your home or work, or en route to the
school, you are quite likely to go there.
How many people are more likely these
days to stop at the little shopping centre on
the corner rather than struggle with parking
and crowds at the bigger malls? Two perfect
cases are the new Cape Quarter that has
opened in Green Point and the new
Morningside Shopping Centre in Sandton.
Dipstick research with friends in these
areas shows they are definitely stopping off
there and if their local retailer isn’t available,
the substitute is ‘good enough’.
Retailers aside, there are so many more
products available on the shelves, with 29
major brands such as P&G extending
brand lines into new areas; suddenly the
choice of toothpaste or dishwashing liquid
is more prolific. Media messaging is no
longer simple. From TV to print to the
new digital (mobile, e-mail etc) channel
clutter is created in the consumer’s mind,
and they stop receiving these messages as
they used to.
The Internet has revolutionised the way we
relate to each other and our communication
expectations and, in fact, in itself is a
‘location’. I have four friends that have
recently started online fashion boutiques,
stealing away customers from the
boutiques in malls and the larger
department stores. The clothing is unique,
the buying online easy, and prices highly
competitive.
So how do we, as marketers, keep the
loyalty we have enjoyed for so long? To
truly understand the brand experience, one
needs to consider all points of contact
between the brand and the customer,
harness these and integrate our holistic
offering through understanding their
behaviour and lock that in. This means Nici Stathacopoulos is the owner of a
integrating delivery and marketing strategies consultancy, the Tipping Point, and is
to offer propositions that are not only currently under contract to Woolworths,
relevant but are also woven together in heading up the integration between their
such a way that concept, communication retail and financial services companies
and delivery resonate. If we get this right we nicistathacopoulos@woolworths.co.za
can turn the loyalty effect in our favour. 
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Custom publishing

30

marketingmix.co.za • vol 28 / issue 1/2 / 2010


ustom publishing is one of the most cost-effective mediums
C a brand can use to capture a customer’s attention, improve
its image, create higher levels of awareness, increase loyalty
and get a return on investment.
Companies across different industries have realised the effectiveness
of customer magazines in delivering measurable results, and have
outsourced services to specialised companies to produce quality
editorial content that will meet the needs of the reader, client and
advertiser, “major retailers use it as a medium to communicate and
engage directly with their customers,” says Mark Beare, director,
The Publishing Partnership.
The primary objective of custom publishing is that of a marketing
tool not publishing, and measurement of results is vital. “The
benefits of customer publishing are clear when the right medium is
combined with the right audience for a particular message.
Customer magazines connect customers to brands through
relevant, engaging content. The result is that customers spend more
time engaging with the brand, and the relationship with the brand is
strengthened through this positive experience. Once a brand has the
customer’s attention, there is an opportunity to improve brand
image, increase loyalty and ultimately impact the bottom line,” says
Bridget McCarney, managing director, New Media Publishing.
Successful customer magazines work to specific objectives, which
must be measured and met, the read must balance the needs of the
client against the aspirations of the reader. Take Jet Club magazine,
which is one of the highest circulating magazines in the country,
with a total figure of 1 220 929 (ABC July-Sept 09). “The magazine
is only circulated to Jet Club account holders, offers a range of
benefits designed to make a real difference in the day-to-day lives of
club members, meets the needs of readers who want information
that will assist them in making quality decisions regarding their
personal finances and it has a strong community feel, addressing
topical social issues and offering our readers relevant and useful
advice, which has helped us to achieve readership levels well beyond
our circulation,” says Beare.
Content remains king and a well thought out editorial structure
with bespoke content relevant to the market remains the most
important aspect of customer publishing. Publishing strategies are
built around the unique selling point, which is to create dialogue
with customers. “Relevance is the integral weapon in the fight
against marketing clutter. So the tools you use to build this loyalty
will be totally dependant on the market and what issues matter to
them. As a general rule, the more personalised the better; the more
tailored the content is, the better the results are likely to be,”
says McCarney.
Pick n Pay’s Fresh Living magazine, a lifestyle monthly aimed
mostly at women who shop for their families, found the perfect
balance between capturing the customer’s attention and increasing
brand loyalty within a year of its existence. It bucked all trends in
print media with its sales soaring by over 40 per cent to nearly
80 000 and shot past other food magazines after it was launched in
November 2007. Pick n Pay had just repositioned and rebranded
after 40 years in business when it launched Fresh Living with
the aim of extending its brand, as well as to help grow its brand
equity, entrench customer loyalty and increase the size of
shoppers’ baskets.
What should be considered is the content, the readership and the
relevance for a particular advertiser and marketer. A well-produced
title that is relevant and on target, “can provide extremely engaged
audiences. A lot of New Media Publishing’s titles don’t accept
third-party advertising, but when we do, we ensure that the advert
makes sense for both the magazine owner and the third-party
advertiser,” says McCarney.
Custom publishing
According to McCarney, research conducted by advertisers in
Edgars Club magazine showed an increase in uptake of specific
offers – one client reported a 100 per cent increase in response rates
after an advert was placed in the magazine. “Many of the core
advertisers in this title claim they could not do without it, as sales
uplift is so strong. Edgars Club delivers the second-highest LSM
8-10 penetration in SA (AMPS 2009A), beaten only by Huisgenoot.
No one can argue the relevance for beauty and fashion brands
stocked at Edgars stores when advertising in our magazine.”
There are several business models, and finding one that meets
the client’s expectations is the key to success. In these difficult
advertising conditions, publishers will definitely move away from
risky business models. “I honestly believe that the secret to an
effective custom magazine is still to concentrate on quality
editorial. Independent quality editorial will ensure that readers
engage with the client’s brand by reading the magazine, and this is
the foundation of success for all parties concerned; the client, the
reader and the advertiser,” says Seraj Toefy, publisher, Touchline
Custom Publishing.
Successful customer magazines work to
specific objectives, which must be
31
measured and met, the read must balance
the needs of the client against the aspirations
of the reader.
Credibility
The global financial crisis led to a decrease in retail sales, but the
custom publishing sector was not adversely affected. As Toefy,
points out, “during a downturn there is an even bigger focus on
securing market share. If you can increase your piece of the
dwindling pie, then you don’t only maintain your bottom line but
you position yourself to take advantage of the inevitable upswing
that follows. Custom titles play a crucial role in maintaining
brand awareness and growing your brand affinity, which results in
higher turnover.”
All too often, marketers wrongly perceive custom magazines as
junk mail that is not read, mainly because they are free. “We ensure
that the magazines we print do not become glorified sales brochures
by making certain that every issue has a substantial amount of
editorial. If the reader is inundated with product ads, they’re less
likely to read the magazine. This decreases its effectiveness over
time, which will have a knock-on effect on ad revenue and marketing
objectives. We have a top-flight publishing team that runs our titles.
We treat them as if they were news-stand titles,” says Beare.
Toefy also agrees that good custom titles are targeted, relevant
and often have a large guaranteed circulation. “Internationally, we
have seen that custom magazines’ circulation has grown. This could
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Custom publishing

Five insights on the best ways to use custom media by Bridget McCarney, New Media Publishing
1. Know your customer
Be clear about who your target audience is. With this vital information, a customer title can deliver more relevant and valued offers through
personalised interactions and targeted messages.
2. Set communication objectives
This allows the customer title not only to deliver a marketer’s brand message effectively, but also to emotionally connect a brand with its cus-
tomers. A customer title should always enhance a customer’s life.
3. Distribution is key
Customer media often has a real edge when it comes to distribution. By understanding a brand, clever distribution can unlock an opportuni-
ty for engagement with the relevant brand.
4. Segment your audience
By splitting the audience, marketers personalise their message so much better.
5. Measure
Research is crucial in measuring effectiveness and understanding the needs of the reader even better.

be because with the credit crunch, people bought fewer consumer
magazines but still had the desire to read a magazine, so they
engaged with their free publications even more.”
Global trends
Globally, the customer-publishing industry is growing, and has
become the second-fastest growing medium after the Internet. The
UK’s Association of Publishing Agencies (APA) estimates that the
value of the total UK customer-publishing industry will reach just
over £1 billion by 2013, despite the economic slowdown.
32 McCarney says the APA’s Advantage Study also found that
customer magazines keep consumers’ attention for 25 minutes,
which is significantly more than the eight seconds spent looking at
Segmentation plays a role both as a means of
managing an existing database as well as
offering cost-saving opportunities to clients
and a better product to each market.
a poster or 20 to 30 seconds spent listening to a radio ad. “Readers
of customer magazines are more likely to hold positive views on the
brand with the result that customer magazines are found to increase
brand loyalty by 32 per cent. It’s clear that customer titles are
effective long-term loyalty tools that have the potential to carry
brands through boom times as well as a recession.”
Effectiveness doesn’t only come from the quality of the printed
marketing message. It is also about the quality of attention given to
the message. “Customer media facilitates true two-way communication
and constant feedback allows customers to be a part of the
continuous evolution of the brand,” says Beare.
Market segmentation
Applying different models and content approaches to different
segments of a well targeted and distributed database makes it easy
for marketers to gauge success, and measure the ROI and loyalty
ratings. “The tight economy requires proof that a marketing piece
can deliver on its promise. Unless a piece truly speaks to
consumers, creating an emotional connection with a brand, it’s not
worthwhile and it’s not really custom publishing,” says Beare.
His advice to brands that do not have a customer title yet, and
are considering launching one is: “The basic rules of marketing
apply. Objectives need to be clear and target markets identified;
there has to be a return on investment and a firm strategy should be
in place. The decision around the viability of launching a custom
title actually has nothing to do with the size of the brand or the
budget. Instead, it has to do with the quality of the database.
Relevant content plus accurate data equal no budget wastage.
Segmentation plays a role both as a means of managing an existing
database as well as offering cost-saving opportunities to clients and
a better product to each market.” 

Top five custom publications – July – Sep 09

Publication name Frequency Total circulation Corresponding previous period

Dish & Skottel Monthly 1 353 039 1 887 603
Vodacom Magazine Quarterly 1 224 502 1 171 316
Jet Club 10 x 1 220 929 1 195 265
Foschini Retail Group Club Magazine Monthly 913 727 929 271
Edgars Club Magazine Monthly 861 948 907 495

marketingmix.co.za • vol 28 / issue 1/2 / 2010

 2010 trends
A new decade
The past 10 years
At the turn of the century, the millennium
bug caused global havoc with the threat that
computer systems were going to collapse –
in the end, it was all a load of hoo-ha about
nothing. With this threat out of the way,
online became an experimental tool for
brave and forward-thinking marketers and
signalled a change in the way consumers
thought about purchasing – eBay,
Amazon.com etc. The excitement didn’t last
as the dot-com bust hit and even innovative
marketers scurried back to traditional ways
of getting marketing messages to consumers.
Brands that claim to Conversely, the past few years have seen the
very survival of traditional media being
be environmentally challenged due to the online, digital and
mobile environment.
responsible need to Publishers and broadcasters have realised
that there is a need for a working business
34
be authentic and model that will successfully integrate both
traditional media and digital. The big
question for this decade is not whether
transparent in their digital media will completely phase out
traditional media, but how the two will
marketing efforts in work as complementary media tools? Print
and television will likely always be with us;
order to achieve true however, the money that brands spend
on using these marketing methods is
decreasing and is being redirected to digital
customer commitment marketing activities.
The basic principles of any marketing
– no green washing, campaign are to increase awareness, have
the cash register ring and increase traffic to
please. a point of sale. This won’t change, just the
delivery mechanisms. As consumers don’t
consume media for adverts, but for
entertainment, education and information,
integrating traditional with digital media is
key, with digital more apt for providing the
all-important entertainment elements.
Trends preview
Sustainable branding: Increasingly,
products across the board will force
consumers into more sustainable behaviour
with additional eco-products emerging on
the shelves. This will be cyclical in nature as
brands give in to consumer demand and
increased availability of green products will
increase consumer demand. Various sectors
of the market, such as car manufacturers,
have begun catering to consumers within
the eco-context and those brands already in
marketingmix.co.za • vol 28 / issue 1/2 / 2010
the green space will accelerate awareness
and offerings. Brands will further explore
differentiating factors in the pursuit of a
green identity within the general eco space.
Prosumers want to be aligned with socially
responsible companies and reward brands
that champion the issues they believe in
with their purchases and, ultimately,
their loyalty. Brands that claim to be
environmentally responsible need to be
authentic and transparent in their marketing
efforts in order to achieve true customer
commitment – no green washing, please.
The 2010 FIFA World Cup: Despite the
rules and regulations handed down from
FIFA regarding outdoor advertising, the
sector will gain from the event, particularly
in innovative use of the medium. Marketing
Mix is hoping to see extraordinary outdoor
creative this year. TV will also gain from
football advertising, hopefully with some
great innovation by South Africa’s
marketers in their attempt to snatch some
of the FIFA sponsors’ limelight. The World
Cup will also serve as a learning curve for
the local and foreign media in the months
leading to the tournament as they
experience one another’s working
methods, engaging in conversation about
media, the country and much more.
For all sectors of the media, be it
traditional or digital, this year is a huge
opportunity to showcase what the SA
marketing and advertising sector is really
made of, and to highlight our creativity
to the rest of the world – who will be
watching with beady eyes.
Customer service: The explosion of new
communication channels into everyday life
has directly impacted on consumers; the
modern consumer will not abide being
talked at – engagement is imperative.
Prosumers insist on being referred to as
individuals and will no longer respond to
the ‘consumer’ tag. More importantly,
businesses that grapple with customer
service and interaction will find themselves
being lambasted with the information
immediately being available in the social
networking space. On the other hand, do
something fabulous, and this fabulousness
will spread like wildfire.

2010
Each brand needs to develop its own
approach developed within the context of
its internal culture and its ability to take
social networking support to scale. A
peer-based approach – setting up networks
that allow customers to support each other
through information sharing – is becoming
popular.
The bottom line is that no brand can
afford to be lax about customer service at
any point of contact. Customers have a fast
and easy way to vent their anger, and they
are doing it.
Word of mouth: Word of mouth has always
been around, but new communication channels
have opened up the arena offering consumers
the ability to get instant reviews, recom-
mendations, information etc from a trusted
source, which could be a friend or someone
they know. We could see the beginning of a
backlash from this as consumers become
more aware of marketers’ input into word
of mouth through affiliate marketing.
Engagement: Social media is a part of an
overall customer engagement and customer
experience model; it helps a brand to
cultivate relationships and engage with
customers. As more brands make use of
Twitter and Facebook, for example, there is
a danger of marketers pushing branding
initiatives instead of respecting the social
media space and using it as a place where
consumers meet and engage with their
favourite brand – on their terms.
PR: During a recession, most marketing
budgets are cut or shifted, so opting for
public relations makes sense as it has always
been about engaging with people. This
decade will be the time of ‘the personal
touch’, and coupled with the still troubled
economic times puts PR firmly back in the
limelight. Normal rules still apply; however,
no spin and be genuine. Consumers find
out much more quickly than they used to,
and will spread the word more quickly too.
Two recent examples where PR failed miserably
are the Toyota recalls and Tiger Woods’ ‘I’m
sorry’ press conference. Take note!
People as brands: As Damon Stapleton puts
it in the 2010 Flux Trend Review, anyone
2010 trends
can become a brand, a brand doesn’t need
to offer tangible benefits, an emotional one
serves the purpose. People brands give
people something to talk or tweet about
and are generally famous for being
famous. The social media space has also
helped to develop people as brands, and
this decade will see this happening more
and more as ordinary people make ordinary
people famous. The beauty of this is that
people brands don’t advertise themselves,
their fame and popularity come through
interacting with the people they want
to attract.
Brands that are innovative
Conversations with tribes: Marketing
has started moving from a one-way and consistent in their
communication streak into two-way
communication with consumers forging messaging and offerings
relationships with consumers, especially
35
the tribes that have been formed online. As
the decade progresses, it will become
have reaped the
increasingly important to monitor online
brand reputation and be aware of what’s benefits, but it will take
being said and done by the different
communities and follow this with damage considerable time for
control to address any issues as they arise.
Finding out which brand belongs to which consumers to get over
tribe and how influential that particular
tribe is (positively or negatively) is
absolutely vital.
the value-first mindset
The quest for value continues: In a that becomes so
difficult economic climate there will always
be casualties, including much-loved brands. prevalent during
While it is impossible to say that every
brand that shut its doors during the turbulent economic
recessionword/s missing, it is a fairly good
bet that those brands that failed simply
didn’t understand the quest for value from
times.
consumers. And it’s far more complicated
than simple price cutting. One of the key
strategic issues facing most brands is the
ability to develop a strong yet nuanced
interpretation of the global society’s quest
for value. Brands that are innovative and
consistent in their messaging and offerings
have reaped the benefits, but it will take
considerable time for consumers to get over
the value-first mindset that becomes so
prevalent during turbulent economic times.
As a consequence, those brands which promote
value while still retaining core brand values
will do well over the coming years. 
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Book review
The 2010 flux
trend review
he 2010 Flux Trend Review
T serves as a handbook of
trends across a wide range
of industries with many insights
that marketers can take away and
work with. It provides a forecast
of the marketing industry, including
a reflection on how marketers
speak to and reach the evolving
consumer. Contributors (Mondli
Makhanya, Irwin Manoim,
Damon Stapleton, Carina Louw,
Doctor Marlene Wasserman,
Randall Abrahams, Gary Bailey,
Italia Boninelli, Dion Chang,
Damon Stapleton, Mike Stopforth, Rutger-Jan
36 van Spaandonk and Bishop Paul Verryn)
observe the manner in which the conventional
methods of doing things are becoming
obsolete. The marketing industry is also going
through change; new technology provides
new tools and experiences for consumers
who prefer to be engaged in two-way
conversations rather than being talked at.
Different chapters are written by thought
leaders from a wide range of industries, for
example, the editor of Sunday Times, Mondli
Makhanya, provides insight on current affairs.
Damon Stapleton, executive creative director,
TBWA Hunt Lascaris reviews new trends in
advertising; co founder and editor of the
Weekly Mail, Irwin Manoim writes about the
media industry. Doctor Marlene Wasserman
aka Dr Eve, looks at sexuality in SA. Other
topics covered include lifestyle trends like
changing careers, football and living with
attention deficit disorder.
The recession, global warming and the
advancement of technology have induced a lot
of change in everyday life in the 21st century,
such as purchasing decisions that are now
based on values in addition to wants and
needs. Consumers are now demanding
greater authenticity and complete transparency
The State We’re In, The 2010 Flux from brands. As Carina Louw observes,
Trend Review “The consumer’s mindset is jittery and
Edited by Dion Chang distrustful. So, if you say your product is
Pan Macmillan authentic, it had better be, since informed,
R195 connected consumers can see right through
sales tactics.”
marketingmix.co.za • vol 28 / issue 1/2 / 2010
Globally and locally, the days of a passive
consumer are long gone; the new consumer is
very active and vocal, and wants to be engaged
with, not talked at. Damon Stapleton says that
for advertisers and marketers this is a dramatic
shift from interruptive advertising to interactive
engagement, and brands that do not deliver
on this will ultimately be outperformed. It is
now necessary for companies and brands to
not only engage with their target market, but
also embark on multiple conversations to
secure loyalty.
The 21st century is an era in which technology
and word-of-mouth rule. “People don’t crave
information the same way anymore, they crave
interaction. Advertising can no longer be the
thing that interrupts what consumers are
interested in. It must be what the consumer is
interested in,” writes Stapleton.
The era of ‘the mouth’ does not allow for
marketing strategies that aim at mass audiences
that are not only ineffectual, but also outdated.
The traditional, tried-and-tested methods of
marketing and advertising are being thrown on
their head. Web 2.0 challenges the way things
have always been done and makes no provision
for consumers to be categorised according to
their geographic locations, race and cultural
backgrounds.
”People now feel the need to connect with
like- minded individuals forming ‘tribes’
challenging the idea of LSMs, which takes
into account the unique interests of people,
and the ever-splintering niches that define
them. You are no longer able to box people in
set categories and assume their behavioural
patterns are based on an empirical, soulless
definition of them as a target market – this
understanding (and the types of interaction it
presupposes) is moving towards a more organic
model that celebrates individuality as a primary
factor,“ says Louw.
The 2010 Flux Trend Review is a good book
to start the year with. Reviews from thought
leaders could come in handy when planning for
the year ahead. It has insightful chapters and
the themes gel together with the title. It reviews
a changing SA in a thoughtful and analytical
manner with brilliant local reviews that are
relevant. A must-have! 

Are the correct sales
people selected?
any academics and employers
M agree that for salespeople to be
successful they need to have
various traits, skills and characteristics,
including stability, self-sufficiency, self
confidence, goal driven, decisive, intellectually
curious and accuracy. The crucial question
then becomes whether the presence or
absence of these traits is determined
through genetics, experience or training.
Companies spend huge amounts on the
selection and recruitment of salespeople to
determine the level of these traits.
Sales recruiters remark that when it
comes to selection procedures, psychological
test scores have the greatest predictive
validity for evaluating a potential employee.
However, the use of tests has had bad
reviews in the past because of legal concerns
and cultural bias. Many companies now rely
heavily on the input of psychometric
evaluation when recruiting salespeople.
Consider the following selection principles:
Describing a candidate’s current traits, skills
and characteristics isn’t a very accurate
forecaster of future performance. Consider
a medical examination. Data is collected
from several sources like blood, X-rays and
stress tests. But all they do is describe your
present health in great detail. They can
provide general information on how to
improve your current situation, like do more
exercise. This is the problem with most
interviews and the various selection tests, they
are only descriptive. These methods are useful
when trying to discover existing situations
but weak in predicting future results.
You can’t train a person for a job they
can’t do. There is a difference between skills
that can be learned and talent-based skills.
Sport skills are talent based and hobby-type
interests are learned. You can’t train a
sprinter to run the 100m if he doesn’t have
the talent. Several business skills are innate
and talent based, and can be refined with
coaching, mentoring and experience but
can’t be learned through training. People
with talent start showing these traits at an
early age. Also, consider the saying… You
can teach everybody to dance, but not
everybody will be a dancer!
Talent-based skills are very narrowly
applied and don’t generalise to other positions.
No critical business positions seek out average
to general skills when selecting recruits. In
business, talent-based skills are the same. If
sales are not important to the bottom line
of the organisation, very general skills are
Expert opinion
good enough. If sales are important, very
different criteria will apply when selecting a
candidate. This principle of narrow and
specific skills sets for talent-based positions
versus the more generalised and learned
skills explains why the most talented ‘stars’
are not good managers and the best managers
have played and understand the game but
were never superstars. Thus the expression
‘promote the best salesperson and three
bad things happens; you gain a weak manager,
lose a great salesperson and nobody is
happy.’ Managing people and making
sales, require different traits, skills and
characteristics.
Less is more when it comes to job analysis
and identifying selection criteria. There’s
the old saying that explains the existence of
a camel as the result of a committee trying
to design a horse. Statistical regression
analysis when applied to careful, thoroughly
and objective measures of job performance
almost always substantiates the myth about
job descriptions. That is, the more detailed
the job description is and the more specific
the skills or competencies listed, chances 37
are the least effective candidate will be
selected. When weighting is used to determine
the importance of a job, only the first four
to six most important skills actually
contribute to success in the job. Typically,
the most important factor will carry the
most weight, and as the skills go down the
list, so does the weighting.
The famous 80/20 rule of business is the
Kiss of Death. This rule can be applied in
many directions, for example, 20 per cent
of the customers provide 80 per cent of the
business, or 80 per cent of the problems
come from 20 per cent of the customers,
or 20 per cent of the salespeople bring in
80 per cent of the sales. This principle is
known as a normal curve or a random
distribution in an organisation. In strong
economic times, average can be good
enough because as the saying goes ‘a
rising sea floats all ships’. But in a
competitive environment, average is not
good enough. Consider this: a company
with 100 salespeople and R100 000 sales
turnover. If the 80/20 principle applies, it
means that the top 20 salespeople bring in
R80 000 worth of business. If a firm
improves hiring accuracy by only 10 per
cent and there are now 30 top salespeople Marius Wait
instead of 20, the increase in sales would department head: Bunting Road Campus,
be over R40 000. Taking the time and University of Johannesburg
spending money to select well pays big (011) 559 1276
dividends.  mwait@uj.ac.za
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Expert opinion

Connect your brand to

your packaging
eveloping and launching a product in find that this is no ordinary detergent, but one

D today’s meteorically paced marketplace

can be a potential minefield. So in an
attempt to facilitate your safe arrival, here are
that explodes with environmental goodness.
The ‘hardware’ is that of a structurally
unique and eye-catching container that is
a few things to consider. both lightweight and recyclable, as well as
Whether you are a start-up or well-established being ergonomically innovative. The products
brand, most companies plunge full-steam look like they have been developed in the
ahead into the development of their new world’s most advanced technical laboratories,
brainchild with the energy and enthusiasm of and are graphically endorsed with a subtle
a six-year-old in the midst of a post party molecular icon which reads – ‘powered by
sugar rush. Once all the frenetic activity plant-based smart clean technology’. The
has died down and the magic formula is holistic effect is of a company seriously set
tried, tested and given the thumbs up, on making a difference. This is clearly
the time comes to consider the structural conveyed right from its brand innovation
and graphic elements. through to its graphic and structural design –
Although this way of working is all too all three facets of successful brand building
common, it also tends to mask an opportunity working together.
of truly embracing the power of the
38 ‘brand in the hand’, with all the
potential rush and satisfaction of an
industrial strength espresso. I suggest a
more omniscient approach, allowing
brand innovation and activation to
develop side by side.
A good place to start is to have a
thorough understanding of your brand.
Products should accurately reflect the
values of the brand from the inside out.
These values are the core equity of the
brand, and should be the branch from
which all else grows. Solid brand values
and a commitment to quality all set the
stage for long-term growth of the brand
as well as customer satisfaction.
Once a sound brand platform has
been established, product innovation
needs to be exhausted – it’s not enough
just to be good, you have to do good as
well. Ensure that your brand’s proposition is In today’s marketplace with the plethora
aligned with current environmental issues, the of brands flashing their wares, companies
marketplace and your consumer. It’s time for can’t afford to ignore good design as a key
companies to practically embrace the new driver of a solid brand platform. Hence
green movement. a reason to partner with a carefully screened
The newly launched range of household design agency in the early stages of product
laundry cleaners from Method is a fine development.
example of developmental symmetry – It is imperative that you allow the design
revolutionary in its product range through a process to run side by side with your product
highly concentrated liquid that requires just development. Resorting to hyperbolic design
Aardt Davidtz four tiny squirts to wash a load of washing – as a glossy veneer to sub-standard product
managing director, Liquidlab who can say no to that! On shelf, it is content is as destructive as marketing a
(021) 448 4636 immediately noticed for its clean and striking revolutionary hair growth serum in a paint
aard@liquidlab.co.za graphics, and on closer inspection, you will can – the two need to work together! 

marketingmix.co.za • vol 28 / issue 1/2 / 2010


Word-of-mouth marketing
arketing Mix recently hosted a
M one-day workshop on word-of-mouth
marketing, providing insight from
industry experts on the best practices when
using effective influencers as a part of the
marketing mix.
The word-of-mouth marketing cycle
starts when a brand gives customers
something worth mentioning to pass on to
their acquaintances. A friend, role model
and celebrities are those that consumers
look up to and can influence them to create
further word of mouth.
The message comes through loud and
clear about the need for word-of-mouth
campaigns to be original and to cut through
the clutter, with ethical codes becoming
increasingly important as consumers look to
brands to have an honest relationship with
them.
Don Packett, managing director, Thunk,
talks about the psychology of word of
mouth, which he considers the most
powerful and persuasive form of marketing.
Packett says: “Marketers need to accept the
importance of word of mouth and then
appoint champions who will spread the
word and create a disruption in your brand’s
otherwise, consistent message, something
incongruent with what consumers regularly
associate with a product.”
He warns that “If the idea is too out of
sync with the fundamental truth behind the
brand, the message will fall flat. Word of
mouth is an honest exchange of information
from one person to the other. A true
advocate has no affiliation to the brand, but
endorses it out of its own right.”
Jason Stewart, director, Have You Heard
refers to research data that says one in three
word-of-mouth recommendations are
acted on, in contrast with one in 325
marketing messages.
There is general mistrust concerning
traditional marketing messages and
consumers are increasingly turning to
friends for information about brands.
Stewart refers to various research figures
which show that consumers trust advertising
and company marketing less when it comes
to seeking out advice on new product
purchases. “Traditional advertising is akin to
a one-night stand whereas word-of-mouth
is a marriage – you find the right person,
invest in, develop and sustain the
relationship,” he says.
Word-of-mouth
Key components of word-of-mouth


It starts with a product
That defines the messaging
 That the right influencers spread
 Based on their experience and value exchange
 Identify how to leverage the new word of mouth
 Tracking and qualifying the campaign’s impact.
Jason Stewart, director, Have You Heard
A credible campaign needs the right
influencers (people who are connected,
credible and trusted within a target market)
to spread the word based on their
experience with a product. “Improve your
“If the idea is too out
brand’s social status without selling it,
educate customers about a product and the of sync with the
category that it falls under, allow them to
experience the product for an extended fundamental truth
period and provide them with the product,
39
materials, tools and platform. Develop a
working relationship with your sources of
behind the brand, the
influence and actively advise and assist
them,” says Stewart.
message will fall flat.
Reputation management Word of mouth is an
Word-of-mouth marketing is most prolific
in the online environment, which allows honest exchange of
the average consumer to publish and share
opinions and experiences with the world.
Technology is a powerful tool for influencing
information from one
buying behaviour and one of the greatest
threats to a brand’s reputation. This makes person to the other. A
it imperative for brands to take note of
conversations taking place online and add true advocate has no
their voice to them because ignoring the
conversations that consumers are having affiliation to the brand,
can be suicide.
“Reputation management allows a
company or brand to respond timeously
but endorses it out of its
and appropriately to any mention by
consumers, thereby creating a more honest own right.” – Don
and open conversation. If consumers are
criticising your brand, perhaps it’s time to Packett, managing
listen and make the changes they are asking
for,” says Scott Greg, client strategy
director, Quirk eMarketing.
director, Thunk
Greg uses the example of how failure to
assist an unhappy customer on United
Airlines damaged its reputation. Dave
Carroll and his band were flying from
Chicago to Nebraska on United Airlines.
His guitar was damaged on the tarmac by
the airline’s baggage handlers – an event he
vol 28 / issue 1/2 / 2010 • marketingmix.co.za
 Word-of-mouth
watched from his window onboard the
plane. He was unable to get the airline’s
customer service staff to make good on his
claim, despite nine months of effort. He
vowed to produce three songs and videos
about his experience.
“Dave’s first song/video went live on
YouTube and within one week it had five
million views and had been covered by
numerous well-trafficked blogs. It topped
the US and UK iTune charts; United
Airlines’ share price dropped by 10 per cent
costing the company about US$180
million,” says Greg.
The youth market
Greg Potterton, co-founder of Instant
Grass, says companies that have never
ventured into the world of Web 2.0 should
not be threatened by the youth market and
A disgruntled employee their knowledge of technology.
The generation that was born after 1985
is agile, vigilant and connected. They
can do as much publish their thoughts and opinions and a
friend is a person they believe in. Marketers
damage to a brand need not freak out, says Potterton.
“Marketers can do whatever the youth are
40 using the exact same doing; find evangelists who will be
advocates for their brand; after all, word of
mouth is still about passing along content.
technology and media It is designed to be disseminated through
social interaction. Word of mouth happens
as a consumer. with or without you online or offline, the
principles are the same.”
He advises marketers to understand the
youth mindset as highly suspicious of
marketing messages. This market does not
care about you or your brand. “The youth
tribe is a source of opinion, influence and
identity for youth. To influence the youth,
you need to influence the tribe leaders.
Brands that are created in the boardroom
will never survive the streets in the youth
market,” says Potterton.
Internal marketing
However, brands start in the boardroom,
filter through employees and out into the
market. Most often, employees, who can
be a brand’s greatest ambassadors, are
neglected. A disgruntled employee can do
as much damage to a brand using the exact
same technology and media as a consumer.
Four tips to kick off a word-of-mouth campaign
 Understand what is being said on the ground
 Use this to drive improvement within your product offering
 Use influencers to test the improved product
 Use influencers as catalysts to make your market aware of improvements in your product.
Ryan Mcfadyen, marketing director of ONYX Pharmaceuticals
marketingmix.co.za • vol 28 / issue 1/2 / 2010
Similarly, an employee that doesn’t believe
in the brand or simply hasn’t been
nurtured can do damage.
Employees are the image of an
organisation and are key to the external
market yet they are often not treated as
such. The majority of employees are
enthusiastic when they start a new job, but
after a while their morale declines sharply
because they feel they are being asked to
do more but are receiving less.
According to Grace Harding, managing
director, Actuate, “Until recently when
the world financial markets started to
meltdown, a lot of businesses were focusing
on acquisition; getting more and more.
Now that the money to attain more is no
longer available they are starting to look
elsewhere.
“Businesses have been making a lot of
money with people who are giving them
less, because more efforts were put in
external marketing while nothing was done
internally,” says Harding.
She refers to a case study by
Zappos.com, a US-based online store that
was founded in 1999 and has grown to be
one of the biggest shoe stores on the
Internet. Zappos did not go to great
lengths to promote its products in 1999,
but made over $800 million in merchandise
sales. How? Zappos places great emphasis
on company culture and core values. It
publishes an annual ‘Culture Book’ that is
made up of contributions from employees
describing what the company’s culture
means to them.
According to Harding, “Zapopos’ core
value is to deliver ‘wow’ through service.
All employees that are hired for its
corporate office, regardless of position, are
required to undergo a four-week customer
loyalty training course, which includes at
least two weeks of talking on the phone
with customers in the call centre with a full
salary. After a week of training, the new
employees are offered $2 000 to leave the
company immediately, no strings attached.
This is to ensure people are there for the
love of the job and not the money – over
97 per cent turn down the buyout. The
company’s culture focuses on making
sure every interaction with the customer
results in them saying, ‘That was the best
customer service I have ever had.’
Harding recommends companies
perceive employees as media who have an
impact on the corporate’s decisions. “Work
with them to bring your brand to life. You
don’t need a special team of internal
ambassadors everyone within the workforce
should be an ambassador,” she says. 
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