Online SKU Management: Apt Stores for the App Stores

So where do you go shopping for applications on your smartphones?

Apple of course has its App Store with over 140,000 apps.

Google has its Market with 20,000 apps and growing. So does Research In Motion for its Blackberry. And Nokia has its just launched Ovi Store with apps coming.

Now if you are the proprietor of these online supermarkets, how do you manage your sku's?

All good category managers on the manufacturer side are continually reviewing their assortment to match consumer needs, variety, profitability and shelf space. And they partner with retailers, who are concerned about similar issues, to offer an optimal assortment for the consumer. They discuss (argue?) number of sku's, placement, pricing, inventory, etc.

Unfortunately this discipline seems to be woefully absent online. You can make categories of apps. Offer free trial versions. Provide provide Private Label apps like Verizon does. This approach is particularly complicated when you have hundreds of small developers. Apple does exert control and supervision. But all in all, these marketers are missing a real apparent understanding of consumer needs and optimal profitability.

And if you are a consumer, how do you know which ones to sample and buy. Well, the free ones require only the time and effort to download. But there is a cost to that.

Consumers can use online reviews or watch the AndroidStats Market Place rankings to see what apps are going up and what are going down in regard to downloads.

Consumers can also look to see the number of downloads that a particular apps has and the number of star ratings (similar to what CNET also provides for its downloads).

But marketers are here dealing with a totally different type of sku experience and run the risk of really confusing consumers.

According to Flurry, a market research firm that tracks mobile phone trends, the average consumer only has 5-10 apps on their phone. And that is with +100,000 apps out there. The numbers between actual consumption and the wasted online space is huge. But I guess that is what the internet can do profit per space when space is limitless.

Apple says it makes money on its App store. But you have to believe that smartphone manufacturers are leaving money on the table because they are not actively managing the consumer experience and presentation.

Now there has to be an app for that.

To sleep, perchance to dream

When Hamlet said that he was just echoing the fervent wish of millions of people around the globe.

Cephalon recognizes the issue, hence its application for Nuvigil as a pill for counter-acting jet lag. But what about the flip side. Diphenhydramine (nee Benadryl) certainly offers a safe, effective remedy but it does have some side effects.

But at what price does sleep come? In working with Nicholas Hall, I note the following critical facts:

Wide-Spread Prevalence and Rising

Insomnia is reported to affect 24%-65% of the population in the focus geographies. Since 2001, its prevalence has increased by 13% in the US alone. This rising prevalence translates into market growth for companies applying for Rx-to-OTC switches.

Consumer Preference for Self-Medication

Consumers in the focus countries are increasingly willing to self-medicate and have proven themselves to be responsible users in the past. Self-medication will only rise as health awareness among consumers increases, and this will benefit companies going for OTC switches.

Accident-Risk/Productivity Loss

Around 28% of automobile drivers in the US have fallen asleep while driving. Another study estimates 10,000 to 20,000 avoidable casualties due to accidents caused by drowsy driving in France annually. This risk to public health can be avoided by providing the public easier access to OTC insomnia drugs.

Financial Burden on National Systems

The annual cost of insomnia in the US is $42bn in direct and indirect costs. The corresponding cost for France was $1.4bn in 1999, and a similar financial burden is estimated in other countries. Easier access through OTC switching will make its prevention easier, resulting in reduced indirect burden.

Government Policy Could Reduce Its Cost Burden

Governments in developed nations have taken proactive measures to reduce the healthcare burden by switching prescription drugs available on insurance to OTC. The UK government has specifically pledged to double the number of switches in a year to ten.

The easy answer: Balanced well-regulated Rx to OTC switches. It would be great to be able to switch short-acting Ambien. Explore the possibilities of Lunesta or Rozerem.

However, the pharma and consumer healthcare would never derive the true benefits until regulatory agencies really get serious about switch. They worry about the cost burden to the government and understandably the safety aspect. But there are tools, programs and efforts that can be made. And yes, Virginia, there is an even a case for Viagra.

But, before we get active, let’s start with something we all need to function. A new, refreshing way to sleep.

Cleaning Up In Emerging Markets: Heinz and Unilever

As we start the New Year, where else does one start but with emerging markets?

The math is simple. You go where there are more mouths to feed and more rising household incomes.

Before, those rich, developed markets of the US and Western Europe carried the coal for so many multi-national firms from the 1950’s even until the 1990’s, a tremendous forty year run.

But even those great commercial dynasties eventually run out of steam. Look what happened to the Soviet Union after 68 years.

Now every business worth its salt wants to sit at the top of the table and build a new house of business out of BRICs (Brazil, Russia, India and China). And a critical way to the feast is through product quality.

Take that humble condiment: ketchup.

Mexico consumes more ketchup in the world than eight other countries. Heinz used to have a less than 1% share of the Mexican market. Odd, yes? Especially since Heinz makes really good ketchup. So what does the company do?

It buys a private label supplier of ketchup to such outlets as Domino’s Pizza, Burger King and Kentucky Fried Chicken, gains a toehold in the business and then goes on to demonstrate its product superiority. Most Mexican ketchups contain starch. So you go around doing a demo where you drop a drop of iodine on local ketchup and it turns black. Then you put a drop on Heinz ketchup and it stays red. No starch fillers. Quality wins. Heinz now has a 12% share of the market.

When I was marketing director for Unilever in Japan, we launched Domestos, the first bleach toilet cleaner. All the other toilet cleaners in Japan were acid cleaners. We did a side by side demo, running an acid cleaner down one side of a soiled tile and Domestos down the other side. The Domestos side was whiter than the streak down a skunk’s back. The other side, not so clean. Domestos became a market leader.

The lesson: The way to win in emerging markets is by demonstrating superior quality to markets hungry for better qualities of life.

A New Year's Toast To Brands

Alas poor Saab, I knew it well,

an auto of infinite pleasure, of most excellent driving,

he hath borne me in its seats a thousand times;

and now, how abhorred in my imagination it is!

My gorge rises at it. GM is to close down Saab.

When I lived in California, I used to drive my 900 Saab convertible car up into the Orange County hills and survey the David Hockney-lit valleys of opulence. I even bought my daughter the short-lived four-wheel 9-2X to navigate the frozen roads of Ann Arbor to Zingerman’s on a frigid Sunday morn.

How sad it is when a brand name dies. How many millions upon millions do companies put into the value of a name only to see it sometimes die on the vine of commerce?

In 2010, though, we will most likely see more and more value placed on brand names. Kettle Chips sells for $700 million. P&G pursues the freshening scent of Ambi Pur. Kraft looks to gorge itself on Cadbury chocolate, while Cadbury itself, like any lover of chocolate, longs for an even richer aficionado of its sweet sales.

Wherein lies the value of such names. Well, surely, a great deal of it lies in the goods it delivers, whether it is quirky driving, convenient air scenting, crispy potatoes and crème eggs. These elements go into the essence of the brand and help define it.

I was struck the other day by the comments of a friend of mine who is looking for a job. I asked what he had learned about flogging himself on the job search. He replied: be unique and be focused. A truer definition of branding has been rarely been stated. Now all that remains is for him to spend tireless energy on promotion and millions on advertising and he will land somewhere, as will Cadbury and, we hope, Saab. We feel emotional attachments to our brands, our friends, and their personalities. And that makes their value all the more dearer.

As we enter 2010, let’s hope it is a year in which brands and friends receive their just due, their well deserved value and the stewards of those brands have the wisdom and the money to carry them forward.