sweet spot

How Tory Burch Built Her Fashion Empire And Became A Billionaire In Less Than A Decade

Source: http://www.businessinsider.com/tory-burch-the-ballerina-flat-billionaire-2013-7

New York socialite Tory Burch became the queen of fashion and a billionaire in less than a decade.

She packaged her “boho prep” style, and distributed it to the masses by launching her namesake company in 2004.

The core product of her aspirational brand, her signature Reva ballerina flat, priced at just under $200, hit a sweet spot in the market and quickly became a status symbol.

She has outpaced her competitors, Michael Kors and Coach, and the word on the street is that her company is on the road to go public.

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Thursday, July 11th, 2013 news No Comments

‘99% Of Sales Come From People Who Don’t Interact With Ads’

Source: http://www.businessinsider.com/facebook-99-of-sales-come-from-people-who-dont-interact-with-ads-2012-10

facebook money

Facebook is trying to close the loop between ad exposure on the social network and real-life buying habits. 

For years, it has been difficult to prove that someone seeing an ad on Facebook (or anywhere else for that matter) became more likely to buy the product.

Brad Smallwood, Facebook’s director of Monetization Analytics, expanded on what the social network’s new partnership with Datalogix means for marketers at the IAB Mixx Conference during Advertising Week.

The partnership will allow Facebook clients to match user data with Datalogix sales data, and draw conclusions about whether ads on Facebook actually increased purchases. (Datalogix purchased data on 70 million American households.)

“The outcomes that happen in the grocery store, at the car dealership,” Smallwood said of the initiative that “for the first time ever that draws that elusive straight line from ad exposure to purchase.”

One overall takeaway from the data — which Smallwood said doesn’t identify consumers by name — is clear: Unless you’re dealing with a specific type of campaign (i.e. direct online sales) the answer isn’t direct response or clicks.

According to Smallwood, “99 percent of sales come from people who don’t interact with ads. They consume the message and then when they go to the store they purchase.”

Other important takeaways include:

  • Of Facebook’s study that measured 50 campaigns, 70 percent saw a 3x greater return on ad spend, and 49 percent saw a 5x or greater return on ad spend.
  • “Reach is a crucial driver,” Smallwood! said. A nd digital campaigns that managed to find the proper reach were 70 percent more effective at driving purchases than ROI.
  • Smallwood said that marketers see a 40 percent increase in ROI by finding the “optimal frequency point.” He compared finding the frequency “sweet spot” in social to other platforms: “In TV you don’t want to send 50 impressions to one person, but you also don’t want to send one.”

Although some privacy groups are asking the FTC to investigate whether this partnership violates consumers’ privacy, Smallwood portrayed the new initiative as a “move away from the models that don’t maximize.”

“We at Facebook are dedicated to help you understand stuff like that.”

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Monday, October 1st, 2012 news No Comments

Why Michael Kors Is Having A Blockbuster Year

Source: http://www.businessinsider.com/why-michael-kors-is-successful-2012-9

michael kors model

The Michael Kors brand has achieved unstoppable momentum even in the age of discount retailers.

The company recently raised its guidance again after blockbuster sales in the second quarter.

Meanwhile, other aspirational brands like Tiffany & Co. and Restoration Hardware are struggling.

Michael Kors succeeded because it was the first retailer to hit the market’s sweet spot: people with money to spend but who aren’t rich.

Luxury marketing expert Pam Danziger calls these people HENRYs, for “High Earners Not Rich Yet.” They are the people who make between $100,000 and $250,000, she says.

HENRYs are a growing segment, while the wealthiest people are making less than they used to.

Danziger explained the concept to us in a recent note:

Ultra-affluents (i.e. those at the top 2 percent of U.S. households with incomes starting at $250,000) cut their spending by nearly 30 percent from 2010, while the HENRYs (High Earners Not RichYet with incomes $100,000-$249,999) increased their spending on luxury by some 11 percent from 2009 levels. Even though HENRYs individually have a far lower spending threshold than ultra-affluents, there are nearly ten HENRY households for every ultra-affluent. That is why with a total of 21.3 million households, the HENRY segment is a critically important part of the consumer market.

With Michael Kors’ $450 handbags and $250 watches, HENRYs can show off their success without feeling like they’re going overboard.

Kors wisely chose the exact right audience, and now it’s pay! ing off.

DON’T MISS: The Real Reason People Line Up At The Apple Store >

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Friday, September 21st, 2012 news No Comments

The iPad Costs Apple As Little As $229.35 to Build

Source: http://feeds.gawker.com/~r/gizmodo/full/~3/s–4hn9Lyuk/the-ipad-costs-apple-as-little-as-22935-to-build

The $500 16GB, Wi-Fi only iPad costs Apple less than half that to build, according to a recent component breakdown from iSuppli. And for the 64GB 3G iPad, Apple clears nearly $500 in profit. Here’s how it breaks down:

Apple iPad Estimated Bill-of-Materials and Manufacturing Cost Analysis:
This will no doubt be updated once iSuppli and others are able to do a teardown of an actual device, but those estimated profit margins are pretty stunning, particularly on the higher-end models. iSuppli also points out that the 32GB versions of the iPad only cost $30 more to make than their 16GB counterparts, yet retail for $100 more—a good indication that that’s where they expect the sweet spot to be in the market.

Goes a long way to explaining why Apple’s so willing to be flexible on the price, no?[iSuppli]

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Thursday, February 11th, 2010 digital No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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