TM
reporting on the marketmg pmtession
Oct. 26, 1998 Vol. 32 No. 22 $3
NewsDigestPhone fraud fighters
According to the AARP's FraudFighters, which helps the elderly
protectthemselves from telemarketing fr^ud,there are 14,000
fraudulent telemarket-ing^ organizations in the country that
bilk-people out of ahout S40 hillion a year.Schemes include fake
charities, sham in-vestments, illegal sweepstakes, foreignlotteries
and phony prizes.
New Hampshire AARP PresidentRoland Stoodley said the group's
re-search has shown most victims are social-ly active,
well-educated elderly people.Many victims do not know
telemarketingfraud is a crime.
The Fraud Fighters group is giving pre-sentations on
telemarketing fraud to olderpeople and their families all over
New-Hampshire and educating law enforcementand community leaders
ahout the prohlem.
'Poster boy' suesA former model who claims he was
made to he a "poster boy" for gay menwith AIDS has a right to
sue over the useof his photograph, a Florida appeals courtrecently
ruled.
Paul V. Facchina Jr., 27, said he signedan agreement in November
1994 withMutual Benefits Corp. to use his imagefor advertisements
related "solely to thepurchasing of life insurance policies."
Facchina filed suit sued a year later,claiming his photograph
was published inmagazines directed to "sexually active
ho-mosejnials" and that the text of the ad im-plied he was a gay
man dying of AIDS.
Named in the lawsuit are Viatical Ben-efits Foundation, which
buys life insur-ance (rolicies on discount from terminallyill
pauents, and its affiliate, Mutual Bene-fits, which matches people
interested inbuying policies with those wanting to sellthem.
Fringe of the f r i i ^And you thought American politics had
problems.Car freaks, animal lovers, radical envi-
ronmentalists, communists, evangelicalChristians and even vote
boycotters havededicated political parties in Germany.
In a TV spot for the Anarchist Slam-dancing Party of Germany,
punks dancein the streets and guzzle beer in one shot,and sit
grinning in German luxury cars asmen in business suits clean their
wind-shields in the next.
The Hamburg-based party, whichclaims to represent "social
parasites,"campaigns on such slogans as, "Free beerfor all."
From AP wires
Inside2 Marketing Briefs4 Marketing Views5 Don E. Schuttz6 Bob
Lamons7 Thomas T. SemonB 0. Kirk Davidson
9 Jacquelyn A. Ottman46 Conference Caiendar46 Publication
Preview46 Books in Briel47 Names in ttie News48 Marketplace
2071222 H-MHEBSCO PUB FULLEDlTOniAL PEPAPO BOX 590IPSHICH HA
01
Internet portals'mad dash for cashSites' success hinges on
brandingBy Maricris G'. BrionesSTAFF WRITER
In a six-week'period starting early this sum-mer, Snap.com
announced its relationship withNBC, chose an agency, launched a
short-termawareness campaign, and filmed and edited sixcommercials
for its branding campaign launchedthis fall. By the end of summer,
the joint Inter-net venture between San Frandsco-hased CNetInc. and
NBC had leapt to 37th-most visitedWeb site from No. 72 just two
months earlier,according to New York-hased Internet measur-ing firm
RelevantKnowledge Inc.
The speed with which NBC and CNet aremoving to market their
on-line property match-es the blistering pace Internet portals have
setfor their product Ufecycles: What was innovativeless than 18
months ago is almost a commoditytoday. Now the proliferation of
sites callingthemselves portals has players trying to brandtheir
way to the top of the heap.
Industry observers estimate that within two tothree years, only
a few of the 10 or so significantportal players sdll will he
starting points for thegeneral Internet audienceand able to
com-mand the premium advertising rates that makesuch sites worth
maintaining and marketing.
How well they're able to attract and keep newvisitors will he
critical. One challenge is that ofall the Internet surfers, few
regularly use portalsites. In fact, the top nine portals only
accountfor about 15% of Internet traffic, notes ChrisCharron, an
analyst at Cambridge, Mass.-basedresearch firm Forrester Research,
and "more
than half of that portal traffic goes toYahoo! and aol.com, the
Internet portalsite for on-line service provider AmericaOnline.
"Because (the Internet) is so diffuse, Ibelieve there will be
only two to threebroad-base consumer portals that will sur-vive,"
Charron said. The rest, he said, even-tually will have to find
content or audienceniches to serve.
Although the descriptive term "portal"may be new in high-tech
vernacular, the sitesthemselves are not. Most of the top
sitesYahoo!, Excite, Lycos and Infoseek, for exam-plebecame prortal
destinations as they addedto their original search functions such
featuresas news chps, shopping channels, and travel andfinancial
information.
The portal strategy is popular because theplethora of
information attracts sizable audi-ences that attract equally
sizeable dollars. Com-pared to more-specialized sites, portals
generallyhave a lower CPM, hut because of sheer audi-ence volume,
the top nine portals command60% of all Internet advertising
dollars.
Portals are "poster children on how to makemoney on the Web,"
said Bridget Regan, an as-sociate analyst focusing on portals at
Cambridge,Mass.-based Giga Information Group.
The portal model varies little from site to site."Feature sets
of portals are becomii^ surprising-ly more alike," said Julie
Welch, vice presidentof marketing for Snap. ".\t this point, it's
all
^ see Portal on page 44
b
Snap(top). Excite and Lycos
are among the top portal sites com-peting for loyal
customers.
Some firms see recruit list in welfare rollsBy iames
HeckmanSTAFF WRITER
M6shele Jackson, a mother of two, success-fully made the move
from wettare recipient toBank of America teleservice
representative.
Sitting in a training class of 35 potentialbank teleservice
representatives in Dallas lastspring, Meshele Jackson felt a little
out ofplace, Two weeks earlier, she had been sup-porting her family
with welfare checks fromthe government. But on this day in March,
shewas competing for a healthy paycheck and along-term job.
"I felt a little intimidated at first becausesome people in the
class already had somebank experience," Jackson recalled
recently."But that just made me more determined tosucceed."
With the job market tight at all levels, com-panies are
hard-pressed to find semi- and un-skilled workers who will stay on
the job longenough to make their training pay off. Com-panies
looking to fill entry-level marketing po-siddns, especially in the
customer service andtelephone sales departments, are finding
for-mer welfare recipients to be excellent recruits.
Employers who have hired welfare-to-work
candidates say they stay longer in the job, ad-just quickly to
the corporate environment andmay even become the department
stars.
"We've found the attrition rate of peoplewe hired from welfare
is about half of what wesee in other employees," said Scott Gilday,
di-rector of people services for Elk Grove Town-ship, m.-based
United .\irlines. "In a year, wetend to lose about 50% of our
first-year reser-vations network employees, but those wehired from
welfare rolls have about a 25% at-trition rate."
In a recent survey of companies involved inthe Welfare to Work
Partnership, a Washing-ton, D.C.-based coalition of employers
pro-moting the hiring of welfare recipients, 79%of executives said
welfare hires turned out tobe productive employees, and 31%
alreadyhad promoted some welfare-to-work hires. Inaddition, 48% of
respondents said their wel-fare hires had equal or higher retention
ratesthan employees hired from more traditionalsources, sudi as
classified advertisements and
^ see Wlfar on page 45
Where to look for satisfactionOur annual directory of customer
satisfaction firms.Page 11.
Listen up, CS researchersMarketers address issues and techniques
in customer satis-faction measurement in a special editoriai
section. Page 37.
CoveiStoiy Marketing News Page 45
Marketing messages will adapt to economy^ Luxury from page 2
fine jewelry and gifts. U.S. monthly sales forTiffany in
mid-September were estimated tobe running at 3% below plan,
according to areport by Maureen McGrath, analyst for Sa-lomon Smith
Barney in New York. McGrathattributed the slowdown to a decline
intourism; however, she also noted that the de-cline continued in
the retailer's biggest U.S.stores throughout the month.
To remain effective in the fece of such hur-dles, luxury-goods
marketers may change aproduct's marketing message or
marketingchannel. For instance, a luxury car's upscalequalities may
he emphasized in a strong econo-my; but in a weak economy, the
product'sdurability becomes more marketable.
"It's a question of responding to what peo-ple want at the
time," Randall said. "Brandstend to be unchanging, but have a
combinationof attributes and different facets that can beemphasized
at different times."
Not that solidly wealthy consumers changetheir buying habits in
a recession. The targetaudience remains the same, even as many
man-ufacturers and retailers of those goods changetheir advertising
message or allocate marketing
\ It becomes less fashion-able to display wealth. And itbecomes
more fashionable tobuy things that are smart,things that last and
havepracticality.
Ward Randa l l ' 'managing director
Brand Consultancy, Atlanta
dollars differently."It becomes less fashionable to display
wealth," Randal! said, "and it becomes morefashionable to buy
things that are smart, thingsthat last, things that have
practicality."
Japanese carmaker Toyota Motor Corp.hasn't scaled back on
marketing budgets orchanged its target audience for its
nine-year-old Lexus luxury product line, even in reces-sion years,
said Holly Ferris, national public re-lations administrator for
Lexus's U.S. opera-
tions based in Torrance, Calif.However, "When times get tough,
money
may shift to different areas of marketing," Fer-ris said. For
instance, "You may take moneyout of the sponsoring of events, and
put moreinto TV and newspaper advertising to reachpeople."
Indeed, "A lot of luxury goods also arebought by the 'wannabes'
who want to be per-ceived as well-off," said Diane Kutyla, manag-er
of research and analysis in the New Yorkoffice of Deloitte &
Touche LLP, a Wilton,Conn.-based accounting and
managementconsulting firm.
Kutyla noted that many luxury goods shop-pers are those who eam
higher pay in goodeconomic times but lower pay in slower
years.Broadening the reach of Lexus' message is astrategy for
reaching the maximum number ofnew buyers to help make up for what
the brandcould lose from its existing base of owners.
The news isn't all bad. Tiffany, for instance,has seen sales in
Japan run 8% to 9% ahead ofanalysts' expectations for its FY1999
thirdquarter, ending Oct. 31, according to theSeptember report by
Maureen McGrath.Tiffany is doing well in Japan by appealing
toconsumers who buy luxury items ded to such
events as weddings and anniversaries, saidIrwin Cohen, managing
director of retail andconsumer products manufacturing for
Deloitte& Touche in New York.
And Lexus' sales continue to rise comjwredwith last year's
results, said Mike Michels, na-tional public relations manager for
Lexus: "Webelieve it's important to recognize tliat while alot of
fluctuation has been going on on WallStreet, a lot of this is
on-paper value changes,and a lot of factors like low interest
rates, lowunemployment and continued generally goodeconomic
condidoasand of course the verylarge number of baby boomers who are
reach-ing their peak earning yearsbodes well."
Even if marketing budgets are slashed nextyear, markedng
prof^sionals say they are bet-ter prepared than they were in the
'80s whenthe last recession struck.
Now, Randall predicted, companies that al-ready have downsized
and learned to workwith a leaner staff will be more resilient if
aslowdown in the economy occurs.
"We're in much better shape than we were10 years ago," Randall
said. "Overall, our econ-omy is a lot more lean, entrepreneurial,
flexibleand able to change more rapidly than it did(before)."
Welfare rolls can help fill entiy-level marketing positions^
Welfare from page 1
job posdngs.Of the companies responding to
the survey, which was conducted byWirthlin Worldwide, a
McLean,Va.-based public opinion researchcompany, 44% .said tliey
found wel-fare-to-work job candidates throughgovernment social
service offices,and 17% used community organiza-tions.
The Dallas office of San Francis-co-based Bank of America set up
atraining program earlier this yearwith the U.S. Department of
Hous-ing and Urban Development(HUD) and community learningcenters,
through wbich it recruitedJackson. Eligible welfare
recipi-entstbose with a high schooldiploma or GED anil some
comput-er skillsattend a two-week modva-donal seminar underwritten
by thebank; they are recruited into thoseprograms by the social
workers withHUD and the community learningcenter. After completing
the modva-tionai program, welfare recipientsjoined a Bank of
America trainingclass with candidates from classifiedads and job
postings to learn aboutbank products and software.
"The learning centers would rec-ommend people who fit the
profile,"said Nick Lane, the Bank of Ameri-ca recruiter who set up
the program."We were looking for people whohad a diploma or GED,
some coni-jjuter skills, inidadvc and the abilityto take a
challenge."
Once on the iob, the new teleser-vice representatives take
customer-service calls, help solve problemsand explain bank
procedures andproducts. They earn a monthlysalary of $1,600 to
$1,750 widi ben-efits, depending on previous experi-ence.
Lane credits the motivationalprogram for the success of
formerwelfare recipients at Bank of Ameri-ca. The jirogram
addressed whatqualides made people successful andhow to avoid the
barriers that holdpeople back, such as family chal-lenges and lack
of self-esteem. Hesaid many former welfare recipients
worried about not fitting into a cor-porate environment, but the
pro-gram showed them that they had thecapabilides and talents.
Jackson, in her mid-20s, is themother of two boys, ages 10 and
11,and lives in a public housing com-plex in south Dallas. She has
a highschool diploma and worked in cus-tomer service before going
on wel-fare. Jackson also had some comput-er experience, and she
was attendingcomputer classes in a communitylearning center to
upgrade thoseskills when she was recommendedfor the Bank of America
program.
"I think the motivational classmade the difference for me,"
saidJackson, who recently received apromodon and now earns about
$50to $100 more per month. "Theytalked about breaking down
barriers,from our current situadon to familyproblems. Also, I
appreciated thatwe were not stereotyped when wegot to the regular
training. We werejust part of the class, and our finan-cial
situation was our own business."
According to Lane, making theeffort to reach out pays off for
thebank. A nadonal study conducted bythe Dallas Women's Center
showed61% of welfare recipients left theirjob after six months, and
most didnot stay widi a company undl theirthird job. However, Bank
of Ameri-ca found that more than 90% oftheir recruits still are on
the jobafter six months. In their first classof 14 welfare
recruits, only one quit.Jackson started in March with a classof
seven, and all sdll are on the job.
In another example. United Air-lines has a program combining
theefforts of government agencies andcommunity organizadons to
recruitpeople iji cides around the country.Community organizadons
in Chica-go, Denver and Los Angeles, amongother cities, screen
applicants fromstate welfare rolls for candidatesmeeting United's
employment re-quirements, such as language andpublic contact
skills, computer expe-rience and a friendly attitude.
Once hired, the former welfarerecipients join a six- to
eight-weektraining class to learn about cus-
tomer service and United's productsand company philosophies.
Thewelfare recruits are in the same classas all recruits, and do
not receiveany special attendon before or dur-ing the training
class, according toGilday.
Since 1997, United has hiredabout 1,000 people fi-om the
welfarerolls. About half of those hires workas reservations agents
responsiblefor booking flights, changing reser-vations and
providing customer ser-vice; they earn about $7 an hour.The
attridon rate of welfare hires atUnited are half that of
employeeshired through classified ads or otheravenues.
"The low attridon rate may be afunction of welfare recipients
havinglittle previous work experience,"Gilday said. "Working for a
compa-ny for six months does not show upwell on a resume, so
welfare recipi-ents understand they need to staywith a company for
a few years toestabhsh a work record before mov-ing on."
Not all welfare-to-work recipientsare hired by large
corporations;Miami-based Willow CSN is a pri-vate network
communicadons com-pany specializing in handling theoverflow volume
for customer ser-vice and telephone sales call centersthrough a
netw ork of self-employedhome agents. Its clients include
St.Petersburg, Fla.-based Home Shop-ping Network Inc.
Willow works primarily with thedisabled and others forced to
stayhometo care for sick reladves, for
Need a testkitchen in Topeka,
a pollster inPoland?
examplebut beginning earlier thismonth it also recruits former
wel-fare recipients from a training pro-gram run by the
Miami/DadeCounty Public School District. Eachhome agent must work
with at leastthree clienK and provide 10 hours ofwork per week.
They can eam up to$17 an hour.
Elsewhere, Sprint Corp. for thepast year has worked witb
theMetropolitan Community Collegesin Kansas City to train welfare
re-cipients for work. The six-week pro-gram, underwritten by Sprint
andother local companies, teaches for-mer welfare recipients the
basics ofcall center management and tele-phone skills. Sprint made
a commit-ment to hire as many graduates ofthe program as it could,
and of 60
who have graduated from the pro-gram so far. Sprint has hired 30
forits call centers.
In total. Sprint has hired 180 for-mer welfare recipients for
its callcenters in Kansas City, from thisand other programs. The
customerservice posidons pay $7.15 per hourto start with a 50-cent
raise after sixmonths.
"I've found the biggest obstacle tocompanies hiring welfare
recipientsis dispelling the myths," said DarryllFortune, manager of
strategic com-municadons at Sprint. "When hired,they face the same
challenges asother employees, from child careand transportadon to
soft skills suchas dress and office communicadons.But they deal
with those challengeshke anyone else would."
The worfd's market research Web sitew w w . w o r l d o p i n i
o n . c o m
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