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Is Tesco adopting the wrong strategy?Yesterday

Last Thursday evening I was trying to get some work done in a depressing little hotel room at London’s Heathrow airport when I was distracted by a TV show on BBC’s “The Money Programme” titled “Food Fight: The Discount Boom.” The program  highlighted the issues facing marketers during recessionary times and reminded me that those that do not learn from history are doomed to repeat it.

In the program, presenter Gregg Wallace was trying to find out how the food available from the deep discounters Aldi and Lidl compared to the more expensive food sold by traditional grocery stores like Tesco, Marks and Spencer and Waitrose.

For one comparison, he asked Chef Andrew Turner to cook two identical Christmas lunches, one using discount ingredients and one with items bought from a more expensive supermarket, which added £30 to the cost. Wallace and a panel of five schoolteachers found little difference between the two meals, with the notable exception of the Christmas pudding, where the more expensive product was preferred.

The conclusion of the program – that the deep discounters often do offer food comparable to the traditional grocery stores at substantially cheaper prices – has scary implications for the leading grocery brand Tesco.

Last year’s BrandZ™ study found that 30 percent of UK shoppers were “bonded” (i.e, had strong attitudinal loyalty) to Tesco (a proportion very similar to the chain’s market share). The percent o

Brands could win customer loyalty by letting users contribute to campaignsNovember 26
More than half of 16-35-year-old web users would have a stronger affinity with a brand if they could engage in creative branded content online, according to research by digital media agency Mediaedge:cia.mf.gif
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Building a Research CommunityNovember 25

New podcastMatt RhodesTom EwingThere’s quite a bit involved in designing and running good research communities, so we decided to create this podcast where we speak with a couple of folks who have been actively developing communities for a number of years.

First up there’s Tom Ewing, yes theTom Ewing who created quite a stir at this year’s Research ‘08 conference. Back in 2000, Tom created the ILX (I love music) message board as a personal endeavour and it grew viraly. At the time of recording Tom was in a marketing role at Research International. But soon after, parent Kantar had the sense to make him a social media adviser.

Next there’s Matt Rhodes of FreshNetworks, the online community-building part of the award-winning FreshMinds. Matt’s an active blogger and recently revealed that FreshNetworks had won a £5m ($7.5m) interest-free loan as part of an entrepreneur com

History of innovation made coolNovember 19

Market_failure_provocation_NESTA_pullout

Pic c/o Nesta

From this excellent NESTA Download Market_failure_provocation_NESTA

By the very wonderful Will Hutton

Read, mark and inwardly digest (as my old Headmaster used to say)

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Retailer HijackingNovember 19

As the credit crunch continues we've been helping our clients with thinking about how brands should act in a recession. As well as work that has been around for a while, new thinking from Harvard Business School and Forrester (free but sign up needed) is proving useful.

But brands face an additional challenge from some retailers. Search for a favourite brand on the Grocery section of Tesco.com and they helpfully offer a link to "Cheaper Alternatives"
Tesco cheaper alternatives
As well as this approach online, some of their recent advertising promotes new brands as alternatives.

This hijacking is probably a smart move from retailers using digital to enhance customer service though showing a wider range of options, but it's a further reason why brands that choose not to tell their story in the coming months are going to find it hard to regain those people who decide to opt for the cheaper alternative.