Solving the buyer equation

In this week’s instalment of Michael Carney’s Marketing Week:

  • An exploration of the different approaches to purchasing. What kind of buyer are you?
  • Onward and upward for online video
  • The economy: assuming the recovery position?
  • For the loved one who has everything: Newsweek is for sale.


The rare element ‘unobtanium’ drives what plot there is in the blockbuster movie Avatar, as rapacious earthlings exploit the natives of the exotic moon Pandora in an attempt to claim its mineral resources for themselves. As it happens, ‘easilyobtanium’ is a better description for last week’s DVD and Blu-Ray release of Avatar, as local retailers fought amongst themselves to offer the best deals on the biggest home entertainment drawcard of the year.

Depending on where and when you purchased Avatar in the first few days of its release, you might have paid the New Zealand recommended retail price of $39.99 (DVD) or $49.99 (Blu-Ray); or $34.95, $29.95 or $24.95 for the DVD (Blu-Ray pricing scaled down proportionately) depending on which retailer you visited; or as little as $19.99 for the DVD (JB HiFi, opening weekend only) or even $0 for the Blu-Ray edition (free if you purchased the Lord of The Rings trilogy on Blu-Ray, again from JB HiFi).

All this discounting for the one surefire hit of the year? It’s either madness or the free market at its finest, as chain retailers use high-profile/low-margin loss leaders to pull in the punters.

It’s the same phenomenon we observed a few years ago when Book Six and Book Seven of the Harry Potter series went on sale. Whitcoulls and The Warehouse in particular competed fiercely to be the retailer selling these books at the lowest possible price, almost below cost.

So how do consumers make buying choices these days, when prices are so highly variable and information about those price points is unevenly distributed?

The answer? It depends. Different groups evidence different characteristics. Here are seven typical consumer purchasing behaviour clusters we’ve identified:


Some (those left relatively unscathed by the Global Financial Crisis) simply aren’t price-sensitive. Convenience and availability is more important than price. If they’re representative of your customer base, congratulations. Love ’em to bits and keep sending them the offers, just recognise that they prefer the finer things in life so don’t offer them junk.


This group is firmly anchored below the waterline of Maslow’s hierarchy of needs, driven by fiscal necessity (temporary or neverending) to focus on survival rather than material indulgence. In times of economic hardship, Scrimpers look only for food and shelter; in happier times, their occasional indulgences are definitely price-driven, but their choices can be limited, often through lack of knowledge of where to find the best deals.


“We spend Saturday mornings looking through the paper, the Warehouse flier and some of the stuff that comes into our letterbox and look for the best deals on things that we might want. Or sometimes we might see an ad on the telly that sounds good.” Bless ’em, these are the old-fashioned kinds of folks that we all once were. Catch their attention, show them what looks like a good deal and they just might buy. A tad serendipitous, no guarantees of actually closing the sale, but it’s a mass media model that worked well enough for most of the twentieth century.


When Steve Jobs speaks, these people buy. Or perhaps it’s Justin Bieber that triggers the purchasing impulse. Or Lady Gaga, George Lucas, JK Rowling, Stephanie Meyer, Peter Jackson or any of those other A Listers whose efforts have gained legions of fans. For truly dedicated followers of these luminaries, the mere announcement of a product release is enough to engender a deep and abiding thirst. Price for these people (at least on anything related to their passion) is definitely not a barrier. They’ll buy the Extended Editions, the Deluxe Special, the Limited Exclusive.


This dedicated band refuse to pay a premium – mostly on principle. For food, they shop at Gilmours (but have a list of the Pak’n’Save specials); for everything else, Trade Me is the starting point, followed by 1-Day (or grabaseat). For a product like Avatar, they’ll expend shoe leather tracking down the very best deal. If you’re the lowest offering in the marketplace you’ll attract their pennies, at least for now. Just don’t expect loyalty – or add-on sales at full price.


These are the virtual descendents of Vinton Cerf, father of the internet. They’re not necessarily young, but they are web-savvy beyond their peers. Once they’ve googled their way into deciding exactly what they want to buy, they’ll use price-comparison sites like pricespy.co.nz and priceme.co.nz to check out product costs. They’ll look to Trade Me, eBay and Trade & Exchange. They’ll check out not just 1-Day but also thesale.co.nz, catchoftheday.co.nz and several of the other daily deal sites. They’ll have bookmarked Salefinder.co.nz for its database of retailer catalogues. Depending on the product category, they’ll probably look at Amazon.com or even request a quote from Grabaquote.co.nz. They’ll have a barcode app like RedLaser on their iPhone so they can scan product labels instore and do instant price comparisons (mostly with international ecommerce sites, alas). And they’ll be desperately hoping that a product like Superfish.com’s “Window Shopper” (a just-released free browser add-on that uses proprietary visual search technology to recognise product images on any e-commerce site and then instantly find and present visually identical or similar images from an index of over 30 million products covering most product categories) comes to New Zealand soon.


Back in the day, when we we wanted to buy something we tended to ask a friend if we knew someone who was a bit of an expert in whatever product category we were researching. Now, it’s even easier – just put the word out on Facebook. If the need is pressing (and the quest is vaguely interesting) you’ll get a quick recommendation from someone in the know – not necessarily someone from your network, it could be a friend of a friend of a friend. That expert may not necessarily know the best price on offer, but just might tell you the most appropriate product to buy, not necessarily the cheapest.


Competing on price (especially against category-killers and other volume sellers) is a quick route to the paupers’ graveyard. This isn’t the place for an indepth discussion of the many ways that small retailers can compete with the giants, but we did want to make one observation: the new/old trend of looking to experts for advice (these days dramatically expanded by social networks) is exactly the tactic that suits specialist retailers best. For many of us, intelligent discussion with, and advice from, people who really know (and have a passion for) their business is well worth a small premium paid on products sold. In other words, social networks are a great place for specialist businesses (not just retailers) to start building a following.

Onward and upward for online video

A new online video index and quarterly research report from video serving platform Brightcove and online video analysts TubeMogul reveals some interesting trends and growth patterns for the online video industry. It’s not relevant for everyone, but it’s useful benchmarking for anyone interested in working with video online.

Amongst the Key Findings from the Q1 2010 Report:

Growth Trends

  • Broadcast networks and pure-play web media properties represent the fastest growing sectors for online video streams.
  • Newspaper and magazine publishers have the greatest number of video players across online media properties.
  • Newspaper publishers show the most growth in video production for online properties, followed by broadcast networks and pure-play web media brands.


  • Online video content from broadcast networks attracts the most viewing time per video.
  • Newspaper and magazine publishers garner the highest online video viewing completion rates.
  • Consumers in the U.S. average more minutes of video watched per stream from broadcast networks and newspaper publishers, compared to their European counterparts who average more minutes per stream from magazine publishers and music labels.


  • Google generates the highest volume of referral traffic to online video content, followed by Yahoo!, Bing and Facebook.
  • Compared to search engines and other social media sites, Twitter referrals generate the highest level of consumer engagement for online video content from broadcast networks, magazine publishers and music labels.
  • Newspaper publishers see the highest level of engagement from viewers who find their content via Yahoo!.

Formats & Strategy

  • In-stream video advertising is the dominant ad format followed by overlays, sponsorships, companions and player skins.
  • Despite experimentation with other ad formats, 35 percent of survey respondents said in-stream video advertising produced the most revenue for their media business compared to other ad formats.
  • For in-stream advertising, respondents said the dominant insertion point is pre-roll, followed by post-roll, player load and mid-roll.
  • More than half of the survey respondents indicated that they would add sponsorships to their monetisation strategy for online video this year.
  • Close to 70 percent of respondents said that their media companies sell their own advertising versus using an ad network.
  • While just over 10 percent of respondents said that they currently distribute ad-supported video content to mobile devices, more than 50 percent said that they will roll out ad-supported mobile video within the next twelve months.

Email us if you’d like a copy of the report or if you’re interested in our upcoming Online Video White Paper.

Market forces

Can it be true? Have we spotted the first cuckoo of a new spring of economic recovery? The latest New Zealand unemployment figures are the most recent and visible signs of a bit of a recovery; so too the first-quarter 2010 report from the Television Broadcasters’ Council, suggesting a 2.9 percent year-on-year lift.

It’s a bit too early to celebrate, but it is time to investigate further. To that end, we’ve put together a survey on the current state of the New Zealand marketplace, in which we hereby invite those of our readers responsible for marketing activities within their organisations to partipate.

Sorry, not looking at this point for input from agencies, media or suppliers, unless you’re talking about your own marketing budgets, to promote your own organisations.

Participants will receive a complimentary copy of the report’s findings, to help them with their own marketing plans for 2010 and beyond.

The survey will take about ten minutes of your life and will investigate your views on:

  • The Current State of the New Zealand economy
  • Economic optimism for the short and medium term
  • Marketing expenditure trends
  • Marketers’ concerns
  • Marketing challenges and opportunities

If you’re a marketer, please go now to http://www.surveymonkey.com/s/marketingexpectations

Magazine For Sale

Newsweek is on sale now. Not just the newsstand copies, but the whole darn thing: publication, trademarks, staff et al. The Washington Post Company, which has owned the title since 1961, admits that the venerable newsweekly has been losing money since 2007, so it’s time to move on.

The plight of Newsweek underscores the dilemma facing publishers everywhere: in an era where news itself is free, nearly instantaneous and universally distributed via the wah-wah-wah, can print-based publishers add enough value (both in perception and reality) that consumers will continue to plunk down hard-earned currency for extended analysis and informed commentary?

We think they will, but oh boy, the quality of the content has never been so important. Please note, we don’t necessarily mean intellectually rigorous (although that’d be nice). Sometimes we’re talking about “quality” as applied to quirky trivia, celebrityhood and many of those other facile but fascinating reports. Consumers don’t gobble up magazine articles about Brangelina because they’re so well written. Other imperatives are at play (and it would take a whole Dr Phil programme to figure out what those are and how they can be cured).

Newsweek, like its longtime competitor Time, is all about contextualising the news; explaining WHY something is important, not just that it is so. Any billionaire who picks up the right to publish the esteemed news magazine will need to understand that if the outflow of cash is to be staunched.

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