How do this traits help with selling a product to consumers? Pros and cons of st

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How do this traits help with selling a product to consumers?

Pros and cons of staying cool or being charming in a sales environment?

Select an existing company or your imaginative one? and select a product, and tell how it would cross the chasm to a wider market while maintaining its cool with opinion-shaping consumers?

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By Eric M. Olson, Andrew J. Czaplewski, and Stanley F. Slater

Firms that possess “the cool factor” have a powerful advantage over their competitors. Their cool products are stylish without being ostentatious, fashionable yet sophisticated, and most importantly, able to command significantly higher margins. Of course, capturing the cool factor is easier said than done, and maintaining that factor—in the face of aggressive competitors and fickle consumers—is an even bigger challenge.

Cool is about creating desire. And cool products typically have one thing in common: Not everyone can have them. It is a product’s exclusivity that helps establish it as cool. But this exclusivity creates a conundrum, as high sales revenues and profits tend to show up only after a product becomes widely accepted. A product’s cool factor is often determined by trendsetters: innovators, venturesome individuals whose buying decisions are largely self-directed, and early adopters, social leaders quick to pick up on emerging trends set by product innovators. Combined, these groups account for only 16% of a target market, on average. Although comparatively small in absolute numbers, these opinion shapers represent a powerful group; they largely determine which products will emerge from the product life cycle’s introduction stage.

However, at the end of the day, they still constitute only 16% of the market. Lurking out there is another 84%. It is well recognized that profits are maximized in the product life cycle’s growth and maturity stages. Thus, to reach these later stages, firms must generate significant numbers of sales from the early and late majority members.

Cross the Chasm

It is a simple but powerful concept: The buying needs and patterns of those eager to adopt innovative product offerings frequently differs from those with a more cautious attitude. Paradoxically, innovators and early adopters are unlikely to have direct communication and interaction with the early majority. Yet, as a firm strives to break out of the product life cycle’s introductory stage, it will need to address the buying demands of both groups. Author Geoffrey Moore dubbed this “crossing the chasm.”

The challenge is to make this crossing without diminishing the product’s cool factor. Although the lure of the substantially larger—and typically more profitable—early and late majority is compelling, managers must avoid alienating the smaller segment of innovators and early adopters. Catering to their demands may be viewed as a drag on the bottom line, but losing their allegiance means potentially losing the cool factor. Together, these trendsetters and opinion leaders act as the legs on the “table of cool.” If they are removed, the table collapses.

Marketing and business press literature provides several guidelines for keeping a product’s coolness once the chasm is crossed. The four interrelated tactics are product exclusivity, peripheral persuasion, buzz, and connectivity.

Product exclusivity. Companies must maintain a product’s air of exclusivity. This requires intensively pursuing product innovation. Companies must consistently develop improvements, enhancements, and if possible, variations to meet the needs of innovators and early adopters. In addition, companies must carefully manage their distribution systems. If they are too intensive, these groups can get easily turned off. But obviously, broader distribution is needed to sell more and to reach the early and late majority. One way to manage this dilemma is to supply the most innovative versions through channels most used by innovators and early adopters. This lets trendsetters know they have something different, more exclusive, than what the rest of the world can get at the mall.

Peripheral persuasion. Advertising should be subtle, and peripheral persuasion routes should be relied on more than central routes. In other words, if the company has to tell consumers that it is cool, then it is not cool. Avoid in-your-face advertising. Some refer to this as a “soft sell” approach.

Buzz. To create buzz and word-of-mouth activity, marketing efforts need to be out of the ordinary, highly creative, and unexpected. Stealthy promotions can be most effective.

Connectivity. Wherever possible, companies should connect the brand to environmental elements already perceived as cool—the right spokesperson or a particular activity, something that fits with the product and desired image. Q-scores, which measure the number of people who are aware of someone, as well as the number of people who claim that person as one of their favorites, can help determine the proper spokesperson. Cool activities may not be ones in which the target market is involved. For example, the latest “Global Cool Hunt” research by worldwide public relations agency Hill & Knowlton found that people ages 18-24 perceive skating and surfing as the coolest pastimes—yet few of them do these activities. Another approach is to pursue a co-branding strategy with other cool products. The partner brand doesn’t need to have a complimentary product, just one with a similar target market.

Apple and Puma crossed the consumer chasm, without losing their cool factor, by following these guidelines.

Polishing the Apple

Twenty years ago, Apple revolutionized personal computers (PCs) by introducing the Macintosh. While Apple failed to become the PC industry standard, it is working hard to establish itself at the forefront of innovation in the music industry.

iPod. Like virtually every Apple product, the iPod is a design marvel. Sleek, stylish, and easy to use, the iPod has taken a commanding early lead in the MP3 player market. Apple designed it to look distinctly different from anything else. And rather than dubbing it something technical (such as Sony’s NW-HD1 Walkman), Apple capitalized on its inherently friendly and personalized “i” label, which stood for Internet in products such as iBook and iMac. It went on to make four critical promotional decisions.

• It built the iPod brand rather than focus on the product’s Apple affiliation. This was possible because it developed the iPod to work with PCs as well as Macs.

• The advertising campaign had little to do with technology standards and everything to do with music and the target audience’s lifestyle. In contrast to Sony’s NW-HD1 Walkman promotion, which relied on central persuasion routes (technical features such as long battery life and high disk-storage capacity), Apple made excellent use of peripheral persuasion routes with a series of silhouette ads. These ads received critical acclaim, and are far subtler than Sony’s in-your-face ads. They include silhouettes of young people engaged in a cool activity: dancing. The colors are dark to set off a glowing white iPod and headphones cord moving rhythmically with the music and dancer. One ad incorporated cool music, by U2, and cool spokespeople: Bono and U2 band members. Capitalizing on this relationship, Apple launched its first limited edition iPod, a black and red U2 model for the 2004 holiday season.

• Apple encouraged an industry of add-on gadgets. At last count, the number of iPod accessories has surpassed 200. These run from simple arm band sleeves for joggers, to high-tech portable inMotion speakers by Altec Lansing, to the ultimate iPod accessory: a $50,000 BMW. While supporting the work of these firms, Apple created tremendous buzz for the iPod, enhanced its market appeal through its expanded applications, and saved vital product development resources—which can be applied to building new generations of iPods to maintain a leadership position.

• Apple expanded retail of iPods and related add-ons, to capture larger sales, but only through retailers like Best Buy and Target—well recognized, with slightly edgy advertising squarely aimed at young people. By limiting distribution to select mass merchandisers, Apple pursues customers otherwise never would venture into an Apple store, and maintains an aura of exclusivity. Because so many companies are involved in this secondary market, many of these innovative accessories’ distribution systems are selective—which many innovators and early adopters prefer.

Although the iPod has been a huge hit, Apple is not resting on its initial success. It has updated the iPod three times in four years, and top-end models now come with a color screen and can display pictures transferred from Apple’s iPhoto program. In addition, the iPod line now has two less expensive models: a colorful mini version, and a smaller Shuffle model about the size of a pack of gum. Apple, at least initially, has also turned Hewlett-Packard (HP), a potentially formidable foe, into an ally by agreeing to have HP sell the iPod under its label. This arrangement capitalizes on HP’s considerable marketing skills and distribution networks while providing a larger iTunes customer base. Although Apple has steadily lowered the price of iPods, they are still comparatively expensive. Such prices keep margins high while establishing an air of elitism.

iTunes. The iTunes Web site allows customers to transfer music to their iPods in MP3 formats. Although people could download music from CDs to PCs to iPods, they were sharing millions of songs—giving the music industry severe concerns.

Although the bulk of attention paid to iTunes focuses on its online music store, the initial highlight provided users a way to easily organize their music. iTunes lets users download and arrange their CDs, and create compilations. With more than one-and-a-half million songs available at 99¢ apiece, and more than 500 million downloads since its inception, iTunes is a hit with customers. It demonstrates that Apple co-founder Steve Jobs was correct in asserting that people would rather pay for songs than risk breaking the law by pirating them. iTunes will likely remain a leader, with the profit margins being so small (about 10%) that price competition probably won’t be a factor.

Of course, the iPod and iTunes are only Apple’s opening salvo in a digital entertainment and communications revolution. Apple and Motorola have already jointly developed a mobile phone incorporating iPod technology. It doesn’t take much imagination to predict that other technologies—such as cameras, global positioning systems, the Internet, and televisions—will be incorporated as well. Who knows? Maybe today’s cool kids will be wearing iPod pacemakers 50 years from now.

Racing the Puma

The Puma brand dates back to 1924. It had little exposure, however, until the first Olympic athlete wearing Puma shoes won a gold medal in 1952. In the 1970s and early 1980s, Puma emerged strongly in the United States with breakout products and celebrity spokespeople such as basketball great Walt Frazier. In the mid-1980s, Puma was reduced to a minor player as it lost favor with innovators and early adopters, because of miscues including: distributing the brand too widely; failing to provide innovative, exciting, or fashionable designs; and neglecting to sign the right spokespeople. The brand lost its air of exclusivity. From the late 1980s to the mid-1990s, Puma continued to make technical advances and remained a high quality yet comparatively small player. During this time, arch rival Adidas and upstarts Nike and Reebok dominated the industry. Although Puma remained a competitor in niche segments such as soccer and track and field, its presence in growth sports such as basketball was all but invisible.

In 1997, Puma formed a long-term corporate plan to reestablish its image. This marked a radical shift in focus; style became as critical to the marketing strategy as function. The plan involved five steps.

1. To create an exclusive aura, Puma centered on innovation and high fashion. In 1998, it entered into the first of a series of contracts with major designers, starting with Jil Sander.

• In 2000, Puma and model Christy Turlington launched the Nuala yoga-inspired women’s activewear collection, and crafted—with designer Marc Jacobs—a limited-edition yoga mat bag.

• In 2002, it debuted its limited edition Top Winner Thrift line: 510 one-of-a-kind shoes created from secondhand clothes.

• In 2004, Puma and world renowned designer/architect Philippe Starck developed a revolutionary collection of “modern minimalist” shoes. And with Dutch designer Alexander van Slobbe, it generated a line of boots inspired by 1950s boxing shoes and a line of black shoes stitched like old-time hockey skates.

• Also in 2004, Puma planned to introduce two apparel lines by hip Vexed Generation Clothing of London, which included unisex garments inspired by martial arts robes.

2. Puma greatly reduced the number of shops carrying its products. It dropped the discount sporting goods stores for high-end fashion retailers such as Nordstrom. Puma also opened boutiques in upscale shopping centers, such as Denver’s Cherry Creek Mall. Unlike Nike Town, where the emphasis seems more on entertainment than sales, Puma’s stores are stylishly spartan—the spotlight is clearly on product.

3. Rather than employ mass media advertising, Puma relies on inventive and discriminating marketing tactics.

• Puma has utilized product placements in movies and TV shows such as City of Angels, American Wedding, Will & Grace, Friends, and ER.

• In 2003, Puma launched 96 Hours for men, a 26-piece modular wardrobe system in an aluminum case including everything a businessman would need for four days of travel.

• Puma introduced its Shudoh football boot by hosting parties at sushi bars worldwide. As part of this campaign, Puma partnered with Iron Chef star Masaharu Morimoto to serve special sushi in Japanese restaurants around the world, even providing Puma-branded chopsticks, sake cups, and napkins.

4. Puma also achieved connectivity in various ways.

• Tapping college standout Vince Carter as a spokesperson, Puma reentered the fast growing basketball segment.

• In 1999, Puma outfitted nine National Basketball Association teams and became an official on-field supplier of the National Football League.

• Puma has chosen eclectic spokespeople, including music sensation Korn and Motocross athlete Travis Pastrana, who won the gold medal after completing seven backflips at the Gravity Games, an extreme sport competition.

• In 2002, Puma made a splash when spokesperson Serena Williams won the French Open and the U.S. Open—wearing an attention-getting black Puma cat suit.

• In 2003, Puma launched its H. Street sports shoe with the Jamaican soccer team, and got Paintura Pitch—a partnership of artisan groups Stoique and Scrawl Collective—to produce one-of-a-kind footballs and jerseys.

5. Puma has engaged in numerous co-branding arrangements.

• Platinum, a partnership with Porsche and Sparco, was Puma’s first foray into couture sports gear: fireproof footwear for racecar fans.

• Recently, Puma united with BMW’s Mini to develop the Mini Motion, a product collection including a black driving shoe with an inner slipper (for long trips) and footwear-inspired air mesh seats. The Puma logo adorns the vehicle’s exterior. Although they produced only about 2,000 driving shoes, the sales numbers were insignificant compared with the free publicity.

In 2002, Puma encapsulated the thrust of its brand strategy with “mixing it up.” This signaled Puma would be pushing its marketing activities in even more non-traditional ways. The success was quickly demonstrated: Worldwide sales rose from approximately $1.2 billion in 2002 and $1.65 billion in 2003 to $2.10 billion in 2004. (2006 revenue projections are as high as $2.8 billion.) More importantly, profits increased almost fourfold between 2002 and 2004 to $371 million.

Under CEO Jochen Zeitz, Puma has reinvented itself as a fashion leader with a distinctly edgy appeal, and reinvigorated a brand on the verge of bankruptcy and extinction. Puma still pursues the serious athlete in traditional sports such as soccer, football, basketball, tennis, baseball, and track and field. But it has also branched out, into non-traditional areas such as auto racing and extreme sports. So far, Puma’s strategy is still paying off. The latest Global Cool Hunt found that Puma is the coolest brand on the planet among those ages 18-24, one sign it’s establishing a cachet and translating it into greater sales and profit margins.

Keep Your Cool

Making it across the chasm to a wider market segment does not guarantee a firm will maintain its cool with opinion-shaping consumers. Indeed, firms such as Levi’s and Honda crossed the chasm only to have their legs removed. While edgier brands such as Lucky and Diesel have taken over the premium jeans market, Levi’s is becoming a discount brand by selling jeans at Wal-Mart for as little as $16. Honda’s Civic has been replaced by Subaru, Mitsubishi, Scion, and even Dodge products as the choices of young car enthusiasts or “tuners.” Why? Honda redesigned the model with less horsepower and a more conservative, family oriented appearance.

The lure of the mass market is strong for managers focused on growth and the bottom line, but leaping the chasm requires an adaptive perspective. Apple and Puma have figured this out. Now it’s your turn.

Explanation / Answer

Customers experience hard sell most of the time. Given the competition in business and the industry most organization attempt hard sell approach to increase their profits. That is ok. But at the same time, constant pressure to purchase a product can become annoying for customers. As a result, when a company maintains its cool factor, it naturally stands out among the crowd. This also displays confidence and higher quality product. If you add factors such as prestige and exclusivity to that, then the demand for the product can be controlled by the company with relative ease. The examples in the information (Apple and Puma) shows exactly that.

There are pros and cons of being cool and charming in the sales environment.

Being cool means that the company brand is resonates more with their specific target market. It also means that there is an expected level of loyalty and followers for the product. This results in word of mouth marketing and boosts the brand position in the market. However the disadvantage is that being cool often means that a specific target audiences resonate with your product. You miss out on larger market share or the mass market. In short run this means loss of opportunity and customers.

Being charming in the sales environment is the most common trend in most industries. The benefits of this is that, the company remains competitive not only in the long run but also in the short run. This helps in increasing market share rapidly and acquire new target audiences. The disadvantage is that the brand recognition is not as distinct as a cool company. Due to the competitive nature the unit profit margins are relatively lower.

We can take example of Apple (even though it is covered in the information section) and talk about another of their product, the iPhone. The features of iPhone are not as good as top of the line Android phones (at least on paper). However, the premium that iPhones demand are much higher than any Android manufacturers can command. This is due to the brand identity and positioning of Apple products. While the top of the line iPhones, such as iPhone X and iPhone 8, are premium products, the company has also began crossing across to a wider market. The older models such as iPhone 7 and iPhone SE are available for a much lower price and provides a budget premium feel for price conscious consumers. Apple still maintains its cool persona with its premium products and also has products that can be afforded by general people. The opinion on Apple iPhones (even the older models) is that Apple phones seldom face crashes or performance issues. Hence even with slower processors and less amount of memory, an Apple iPhone demands a certain premium compared to Android.

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