Seasons on the Web          
by Brian Chmielewski

Are there seasons on the Web? If you market on the Web, can bet your job there are! And only 90 days remain in most fruitful of those seasons, the Christmas celebration. Based on standard operating hours, roughly 900 hours of shopping time is available, unless you're patronizing Internet vendors, in which case, you gain another 1200 hours. From the average consumer standpoint, spending this legion of hours in quest of the ideal gifts should induce some deranged rationalizing behavior, but from the sales and marketing perspective, it signifies a time to move beyond conceptual stages and into strategic development and implementation of seasonal publicity.

Why Pay Attention to Cycles?
However you prefer to term this festive holiday, one central theme remains clear - seasonal concerns pervade nearly every product category. For many businesses, the economic commotion provoked during the fourth business quarter represents their financial bedrock. In fact, fourth quarter 1997 witnessed US $ 335 million in e-commerce revenues according to the Internet Advertising Bureau. In opposition to linear theories of promotion, the cyclical or seasonal model provides new challenges and requires insight for activities such as forecasting and new product introductions. Effectively managing seasonal campaigns depends on being able to gauge accurately the effectiveness of advertising spending, promotions, pricing and many other possible factors. Your analytical capabilities provide keen recommendations on choices you must make to optimize your business - price levels, promotion methods, media spending, product portfolio mix, retail category optimization and other areas where statistical techniques can quantify likely outcomes or evaluate historical effectiveness of choices.

In nearly every environment, one interval in time is influenced by past intervals - every action becomes responsible for consequent actions. In financial markets, points on the yield curve influence each other. In commerce, the specific time of year and competitive pricing can directly effect demand. In marketing, the economic landscape and timeliness of promotions effect sales. Upon examination of the interactions between the members of a marketing production channel when the demand faced by the retailer is seasonal, manufacturers can determine production rates and price structure at which it will sell the product to the retailer. Likewise, retailers can decide the order quantities and pricing to sell the product to the customer based on their behavior.

Seasonal Research
Predominant retail measurement instruments in the offline world include product purchase scanning, retail audit services and accounting level reporting. Scanning of product codes and store visits has become an accepted standard as a result of the work of professional auditors, ACNielsen. Their statistical data offers complete portfolio representation of sample and census information across many product industries, such as, the food, household, health and beauty, durables, confectionery and beverage markets. Since the online world is, by nature, automated, tracking inventory levels and incidence of purchases - thus customer activity - can be more readily documented and available for historical analysis. With proper accounting, customer tracking software and inventory controls implemented, your Web-based business can cipher trends and make shrewd promotional decisions. Maybe you'll take advantage of those annual peak periods of activity that reflect a willingness of your target audience to demand your product by adding incentive of additional purchases of similar or identical products. Perhaps your agenda is to tackle the lulls in your business cycle with creative new sales and awareness promotions.

Applying and monitoring retail measurement services can help to gauge product penetration, overall product performance, distribution, promotion effectiveness, and price sensitivity. Whether the goal is long-term strategic planning or tactical decision-making, possessing thorough seasonal data grants you the means to measure and track those details that help you manage your business. Research services support decision-making at each stage of product marketing - from the identification of market opportunities, the development of product concepts and product positioning through to sales forecasting, advertising testing and tracking.

Time series analysis and forecasting
Planned promotions are more fruitful. With research and outline in hand, marketing, sales and operations teams perform according to realistic guidelines, allowing them to thrive. Establishing a seasonal campaign may appear simple - acknowledge your business cycle and then act when a period in that cycle corresponds to your goal. In all actuality, the business of pinpointing cyclical trend in very complex, involving multiple theories and numerous mathematical calculations designed to take every variable imaginable into consideration.

The Bass diffusion model is a popular model designed to determine when a consumer will adopt a new product or technology. The three parameters of the model are:

• the market potential; the total number of people who will eventually use the product



• the coefficient of external influence; the likelihood that somebody who is not yet using the product will start using it because of mass media coverage or other external factors



• the coefficient of internal influence; the likelihood that somebody who is not yet using the product will start using it because of "word-of-mouth" or other influence from those already using the product.

This is a very complicated model to understand. If you'd like to learn more about it, your can check out http://www.marketing.unsw.edu.au/user/chrisd/ses8four/index.htm or search for 'Bass diffusion model' at your favorite engine. Beware, this is not for the mathematically challenged.

Seasonal Marketing Examples

• Event marketing
  
To accentuate your efforts for some future event or point in time, you must plan in advance. The conference and tradeshow business and the movie industry are great examples of this. Based on time-specificity - the premiere or the conference dates - marketers perform research and analysis to react when the market is ripe, feeding the curiosity of their audiences, offering sneak previews, early registration benefits, promotional gear and more to bolster demand. For example, movies that want a competitive edge at the Academy Awards know to hit the big screen after October. This release is timed to keep the buzz about the movie, a buzz that remains fresh in the minds of judges and society until the presentation of the Oscars in March. March's victorious actors and actresses can count on greater demand for their services and the movie itself experiences greater box receipts, longer periods of play in the theatre, and more demand in video stores.


• Risk management marketing
  In an attempt to offset volatile price swings and ensure more predictable and steady pricing for natural elements and agricultural goods, some companies design and implement risk management plans. Risk management incorporates the use of financial instruments, such as futures contracts and options. The key to a successful risk management plan is to clearly state and understand the objectives and determine whether they are driven by budget projections or the prior year's expenditures. This type of marketing has been implemented in times of energy crisis and to a similar extent, as an exercise in corporate public relations during emergency crisis situations.



• Retail measurement services
  The retail audit remains a valuable source of market information as a basic measurement tool or as a supplement to or in lieu of scanning data. These types of audits involve the continuous measurement of product and category performance in the retail trade, reporting to clients on sales, distribution, stocks, price and other measures which assist them in marketing and trade negotiations and in commencing promotions when the market will bear fruit. Just as stores showcase seasonal themes, your Web-based business can change its navigation structure to reflect a time-sensitive promotion.

Possessing specific sales and merchandising information about your Web-based operation will allow you to produce reporting of your product and/or category performance. Unless you are a clairvoyant statistician, operate a monopoly or can rely upon existing industry trend analysis, manufacturing the statistical data for targeting your seasonal campaign can take some time. Fortunately there are professionals who specialize into this trade.

Employing industry indicators, such as those provided by ACNielsen, allows a snapshot of your market competitiveness against the backdrop of rivaling brands. Since the Web has is not border-sensitive, Nielsen's multi-national customers international reporting within and across country boundaries provides a global perspective. Nielsen now segments the Web as its own entity. With immediate access to information, reporting and analysis, this promises to be an exciting source of data for plotting seasonal business activity per industry. For a price, they also offer a series of Windows-based business applications that can enhance the present functionality, giving organizations the ability to plan, analyze and execute successful marketing and sales programs. Among these applications are Opportunity Explorer, Executive Spotlight, Business Review, Trade Manager, Category Manager, Promotion Optimizer, BrandView and BrandTrack.

Here are two more services that may lend a hand:
DataMetrix offers a service that focuses on the automation of developing seasonal data for companies. ACNielsen's SalesNET provides fast, easy access to pre-run reports and charts. These are designed and tailored to focus on fact-based selling and category management initiatives.

Take advantage of this advanced notice and start an awareness campaign today! uPromote Custom Marketing.

First published in WebPromote's Sept. 1998, Vol. 4 newsletter.