Out of the Box

Fair Weather Marketing

By Menachem Lubinsky on May 16 2008

This is about the time of year when you are likely to see ads for products and services you do not see the rest of the year. Ads for air conditioners and fans are one good example. In every category from fashion to leisure travel, advertising abounds in an effort to capture market share of the multi-billion dollar summer season. Savvy marketers look for opportunities to promote their summer wares year-round. They know very well that cash flow and expanding product usage can spell a huge difference in the bottom line.

Larry, the owner of a Brooklyn appliance store begins marketing air conditioners in earnest in mid-March. That’s when he moves the AC’s from the back of the store to a central aisle. Sales of air conditioners offer good margins and even some extra cash from delivery and installation. He promotes an early sale in the hope of moving merchandise even before winter is officially over. He plays to the fears of customers that once it gets hot, the specials that he offers in March may no longer be available and installation may be delayed for days. It works. He begins to move inventory well before the summer rush. Next year Larry is planning to move up the process by a full month to mid-February in the hope that the results will be the same.

What the store is attempting to do is narrow the window when the air conditioners stay in the back of the store. Larry even thought about the idea of starting a service where his installers and service people inspect air conditioners, change filters and hopefully recommend many new units, all in December. In this way, he thought, there will at least be a percentage of people who will opt for new units when told that their existing units would have to undergo expensive repairs. He stays in touch with his customers all year with a umber of mailings on appliance specials and occasionally includes special offers on trade-ins. Larry says that his program of “babying” his air conditions definitely has been paying off.

In mid-December while shopping at a large discount store, I noticed a sale of a full line of barbecue grills, including many brand names. The sign said that the price included free assembly and delivery. I wondered whether there would be any takers while the temperature did not get out of the 20’s. The salesman said that he had sold 40 grills in a day and a half. Then he said something interesting: “the more grills we sell now, the more likely we are to afford specials in season.” In other words, good sales now allows the store to share in some of the profits later.

Seasonal marketing is, of course, an opportunity to capture sales at a time when demand is at its peek. Before considering expansion, such as marketing in the off season, the marketer needs to have a good plan in place during the season itself. The likelihood is that the seasonal marketer will be marketing in an extremely competitive environment, albeit at a time when demand is high. As creative as one might be to promote products off season, the challenge is often greater in season when there is likely to be many similar ads vying for market share. Larry says that in-season, he focuses more on newer items and this year he was heavily promoting energy-saving, a buzzword that he says everyone seems to understand.

Marketers say that timing is crucial in seasonal marketing. For example, Larry would be well advised to launch his campaign in mid-Spring when the temperature is just beginning to rise and not wait till the summer itself when save for the emergencies most people have already made plans for their air conditioners. The same goes for the grills, which are likely to do far better just prior to the summer season than in the heat of the summer itself.

It reminds me of a young man who managed to import a significant quantity of leather gloves for the winter season, but because of a delay in the transfer, the gloves had not arrived until early January. Although he was counseled to hold the gloves until next year, he refused to pay warehouse costs and sharply reduced the price, barely eking out a profit. Even with warehouse costs, he would have done far better in selling the gloves on a timely basis.

I have often found that seasonal marketers do not do as well as they could because they begin the planning process too late. It’s as if the thought just occurred to them that the season was coming. The ideal marketing situation is to plan next year’s program as soon as this year’s season is over. Larry should ideally plan for his season in late September.

This summer marketers will face a challenge they have not faced for many years. With a down economy, people are simply not shopping as much. Department stores are deep discounting items earlier and longer than they normally do. They are offering discounts for items they normally would never dare to sell for anything less than full price. Before they even promote anything, they will have to find creative ways to bring people into the store.

A car salesman once convinced me that that sales of cars are also seasonal. In fact, he sells many more cars in the Spring when people are making plans for the summer than he does in the fall. He convinced his boss to reshuffle his advertising campaign to early Spring. His boss, however, thought otherwise, arguing that the money should be spent when sales are slow. So they compromised. In 2003, the dealership gave in to the salesman and spent a considerable amount of money in the Spring. The result: a 15% increase in car sales.

It is important to understand the dynamics of seasonal marketing when weeks matter and money can be wasted. We’re about there for this coming summer!

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.