Clinton Cards' collapse caused by marketing intertia

This week saw greeting card store Clinton Cards become the latest high-street retailer to go bust, putting 8,000 jobs at risk. This follows losses last year of £10.6m on sales of £364m.

What went wrong, and what can we learn?

The UK recession has not helped for sure, with less people out shopping, and so less traffic to stores. But I think the company's problems were much deeper rooted. Clinton suffered from what I call "marketing intertia": persisting with an out-moded business model, even when you see the market changing.

What is marketing inertia?

Marketing intertia happens when a business can see change happening, but they are fatally slow to respond. In Clinton's case change was hitting them from two directions.

First, like many retailers, Clinton has been losing business to the supermarkets sell the same product at a lower price.

Second, and more fundamentally, there has been a rapid growth in eCards, with Moonpig.com leading the way. These cards started out as animated cards sent by email. But increasingly these are cards you design online, to be then printed and posted. Why go to a shop to buy a card when you can design your own one from your PC? Or even from your smartphone, thanks to apps from the like of Apple.

Now, did this threat from online cards suddenly hit Clinton Cards like a mugger? Not really. Moonpig.com started back in 2001, eleven long years before Clinton went bust. And how long did it take Clinton to launch their own online service? Two years? Five years? Nope, it took till 2011, a decade after Moonpig.com's creation, for Clinton to offer the same service. And by then Moonpig.com had become the dominant leader brand in the online card business, with a reported 90% share.

Instead of investing a new, future-proofed business model Clinton bought rival high street chain Birthdays for a reported £46.4m in 2004, adding an extra 322 stores. At the time the company said the move: "represents a significant step in [our] strategy of increasing high street presence and delivering profitable growth". But in 2009 the Birthdays chain was put into administration, a sign of what was to come.

What causes marketing inertia?

The first cause of marketing inertia is the amount of money, expertise and energy tied up in the "legacy" business model. The first instinct is to defend and protect this existing business.

Secondly, companies can be arrogant about new start-ups, failing to treat them with the respect they deserve. Moonpig.com was unprofitable for several years, and even now its turnover of c.£35 million is only 10% that of Clinton Cards. The same thing happened with Blockbuster Video and Netflix, as I posted on here.

Third, change is slow to happen and for many years, the existing business model will continue to work. As recently as 2009, Clinton was still profitable.

How to avoid marketing inertia?

So, what can brand leaders do to avoid coming a cropper like Clinton?

1. Define the market in terms of consumer benefits (sending greetings), not products (greeting cards)

2. Review the competitors in this market space, and treat new start-ups with respect, especially when they have a new and disruptive business model.

3. Act quickly and boldly, with a couple of options:

- Create a "spin-in" business unit: a separate group within the company enter and grow the new market. I call this "keeping the cannibals in the family". The challenge here is that often company leaders favour the dominant current business and starve the new business of resources, like a father favouring his eldest child.

- Invest in the start-up: this borrow the options model from financial markets and involves investing in start-ups operating in the new market space early. Back in the early days, perhaps Clinton could have bought part of Moonpig.com. If the new market grows you are well placed for growth. If the new market stays small your loss is limited as you invested early.

In conclusion, leaders need to not only have a vision of how the market is moving. They need to the courage and conviction to turn their vision into action by competing in the new market space sooner rather than later.

Comments

[digital options trading]

Always get a live stock market quote, before making a stock investment or participating in the stock market game or buying or selling a stock option.

[True Religion Jeans Outlet]

Most it is certainly plausible assume they have for more information on wash their hair each and every day in order to avoid aspect back and forth from do you want not done and oily.
http://www.truereligionjeansoutlet2.com

[Coach]

They are quite professional http://www.coachoutletonlineua.net Coach Outlet that the shattered Lebanese government was incapable of providing, and has evolved since then into a political force with two cabinet ministers and a dozen seats in Parliament. http://www.coachoutletonlinea0.org Coach Outlet“ in this, and this is something some Western donors are admitting that has a positive impression on some Western politicians,” said Stephan Rosiny, a research fellow at the http://www.coachoutleturla.com Coach Factory Oultet Institute of Middle East Studies at the German Institute of Global and Area Studies in Hamburg. http://www.coachfactoryoutletfa.net Coach Factory OutletThat in turn provides a rationale for the group’s charitable networks among Lebanese immigrants in Europe. “They may collect money for their institutions, but they aren’t http://www.coachoutletonlineab.com Coach Outlet operating publicly,” Mr. Rosiny said. “As long as they aren’t involved in politics and aren’t operating openly, they are tolerated.” http://www.coachoutleshome.com Coach Outlet Online Experts question how effectively European police officials are keeping track of the kind of serious, well-trained operatives capable of staging attacks versus counting up donors http://www.coachoutlet67.org Coach Factory Outlet. to funds for orphans of suicide bombers. “I don’t believe that they are able to monitor Hezbollah activities because Hezbollah is such a professional player,” said Guido http://www.coachfactoryoutletsc.org Coach Outlet Online Steinberg, an expert on terrorism with the German Institute for International and Security Affairs. http://www.louisvuittonususa.net Louis Vuitton Bag “The supporters that march the streets with a Hezbollah flag are not a threat to national security,” Mr. Ritzmann said. “We’re more concerned with small groups — a car http://www.louisvuittonsoutletua.net Louis Vuitton Handbagdealer, a grocer, or whatever

[Coach]

They are quite professional http://www.coachoutletonlineua.net Coach Outlet that the shattered Lebanese government was incapable of providing, and has evolved since then into a political force with two cabinet ministers and a dozen seats in Parliament. http://www.coachoutletonlinea0.org Coach Outlet“ in this, and this is something some Western donors are admitting that has a positive impression on some Western politicians,” said Stephan Rosiny, a research fellow at the http://www.coachoutleturla.com Coach Factory Oultet Institute of Middle East Studies at the German Institute of Global and Area Studies in Hamburg. http://www.coachfactoryoutletfa.net Coach Factory OutletThat in turn provides a rationale for the group’s charitable networks among Lebanese immigrants in Europe. “They may collect money for their institutions, but they aren’t http://www.coachoutletonlineab.com Coach Outlet operating publicly,” Mr. Rosiny said. “As long as they aren’t involved in politics and aren’t operating openly, they are tolerated.” http://www.coachoutleshome.com Coach Outlet Online Experts question how effectively European police officials are keeping track of the kind of serious, well-trained operatives capable of staging attacks versus counting up donors http://www.coachoutlet67.org Coach Factory Outlet. to funds for orphans of suicide bombers. “I don’t believe that they are able to monitor Hezbollah activities because Hezbollah is such a professional player,” said Guido http://www.coachfactoryoutletsc.org Coach Outlet Online Steinberg, an expert on terrorism with the German Institute for International and Security Affairs. http://www.louisvuittonususa.net Louis Vuitton Bag “The supporters that march the streets with a Hezbollah flag are not a threat to national security,” Mr. Ritzmann said. “We’re more concerned with small groups — a car http://www.louisvuittonsoutletua.net Louis Vuitton Handbagdealer, a grocer, or whatever

[Wisdom]

MICHIE's SWEET POTATO SOUFFLE:3 lbs. sweet potatoes, pleeed cut into cubes2 eggs1/2 cup brown sugar - divided1/2 cup butter - melted - divided1 teaspoon salt1 teaspoon ground cinnamonup to 1/2 cup orange juice1 cup chopped walnutslarge marshmallowsIn a large saucepan over high heat, bring potatoes to boil, reduce heat; cover and simmer 15-20 minutes and drain. Beat potatoes until slightly smooth, beat in eggs, 1/4 cup brown sugar, 1/4 cup melted butter, salt and cinnamon. Starting with 1/4 cup orange juice, make mixture moist and fluffy. Spread in a 2-3 quart pan. Top with nuts. Sprinkle 1/4 cup brown sugar, then 1/4 cup melted butter. Place Marshmallows on top. Bake at 350 degrees for 25-30 minutes. Don't let marshmallows get to browned.Use as a dipping sauce for Turkey:SUE's CRANBERRY GLAZE SAUCE:1 (16 oz.) can jellied cranberry sauce1 cup brown sugar1/4 cup orange juice1 teaspoon ground cinnamonMix all ingredients together. Cook in a saucepan on medium heat until smooth and heated thoroughly.ESTHER's MILK CRACKER STUFFING:1 can evaporated milk1/2 cup (1 stick) butter1 cup watersalt and pepper to taste1 box Royal Lunch Milk Crackers (crumbled)2 eggs (well beaten)In a food processor; grind milk crackers into crumbs and place in a large bowl. In a medium saucepan heat evaporated milk, butter, water, salt and pepper until it just starts to boil or scald. Add milk mixture to cracker crumbs and stir. Beat eggs and pour into cracker mixture. Stir until well blended. Spoon into 2-quart greased baking dish or loaf pan. Bake at 350 degrees for 30 to 40 minutes or until heated through. WENDY's PUMPKIN CAKE ROLL:3 eggs1 cup sugar2/3 cup pumpkin1 teaspoon lemon juice3/4 cup flour1 teaspoon baking powder2 teaspoon cinnamon1 teaspoon ginger1/2 teaspoon nutmeg1/2 teaspoon salt1/2 cup walnuts, finely choppedFilling:1 cup powdered sugar8 oz. cream cheese4 Tablespoons butter1/2 teaspoon vanilla extractIn large bowl, beat eggs for 5 minutes. Add sugar gradually, beating well. Add pumpkin and lemon juice, mixing until blended. In separate bowl, combine flour, baking powder, spices and salt. Fold dry ingredients into egg mixture. Spread batter into greased and floured 15 x 10 x 1 cookie sheet. Top with finely chopped nuts. Bake at 375 degrees for 15 minutes. Remove from oven. Cool for 15 minutes. Place cake (nut side down) on a clean kitchen towel sprinkled with powdered sugar. Start at narrow end (corner) roll cake up in towel. Set aside.While cake is cooling in towel, prepare filling. Beat together cream cheese and butter; stir in powdered sugar and vanilla and blend until smooth. Unroll cake, and spread on filling. Roll up cake,(without the towel) lengthwise this time end to end and sprinkle with powdered sugar. Chill at least 1 hour. Slice and serve. Keep refrigerated. OLGA's PUMPKIN PIE:1 cup sugar1/2 teaspoon salt1 1/2 teaspoon ground cinnamon1/2 teaspoon ground ginger1/2 teaspoon ground allspice1/2 teaspoon ground cloves1/2 teaspoon ground nutmeg1 1/2 cups pumpkin puree, canned or fresh1 (12oz.) can evaporated milk2 eggs, lightly beaten1 unbaked pastry shell (9-inch)Combine sugar, salt, and spices in a large mixing bowl. Add pumpkin, evaporated milk, and eggs; mix well. Pour into pastry-lined pie pan. Bake at 425 degrees for 15 minutes; reduce heat to 350 degrees and bake 40 minutes or until center is set.

[ralph lauren polo]

Ho pensato che sarò in grado di lasciare il mio primo commento. io non verificare che cosa dire, tranne che mi sono divertito a leggere. Nizza blog. bene essere bookmarking continuate a visitare questo sito molto tipicamente.

[chaussures nike shox R6]

sehr interessant Poesiealbum! taht verwendet werden, um eine große Sache zu sein, auch in der Schule, bekommen alle ein Autogramm, und sie hatten lustige Dinge zu schreiben. Denken Sie daran, "Slam Bücher" oder "Slang Bücher" verabschiedete aroungd in der Schule? Ich hatte einmal ein Autogramm Tier, einen ausgestopften Hund Vinyl, dass Ihre Freunde wurden angeblich zu unterzeichnen.

[collections]

Quality posts is the main to interest the viewers to go to see the site, that's what this web site is providing.