As computing became ubiquitous, increases in office efficiency were projected to cause the death of real world documents, paper and related supplies. In reality, the demand for specific products has shifted. Nielsen trend data indicates that consumers and businesses spent nearly $325 million on printer inkjet and toner cartridges (excluding WalMart) last year. This volume represented a 4% increase from the previous year. But the market for pens and pencils, weighing in at $317 million last year, experienced a drop of 4.5%.

With the market for traditional writing instruments under assault, manufacturers and retailers are coming up with new ways to position familiar products like the #2 yellow pencil. Leading retailer Office Depot recently announced its intent to help consumers find the writing instrument that best suits their needs. New flexibility in packaging allows consumers to purchase single pens. And pens are now coming equipped with special ink to prevent “criminal check and document washing”. Not to be left out, pencils are being touted as environmentally friendly and microbe-proof. These changes point to the need for creativity as marketers remind consumers that sometimes there is no substitute for old-fashioned tools of the trade.

[Sources: Lempert, Phil. Facts, Figures, & The Future, May 2009; Office Depot release, May 2009]

State and local governments are busy spending stimulus funds on shovel-ready highway and bridge repair projects but did you know that the American Recovery and Reinvestment Act of 2009 also provides for broadband investment? The feds are ready to spend $7.2 billion to boost broadband access to residential markets. A study recently released by PivotMedia indicates that the rural market for residential broadband access is particularly attractive.

Rural markets tend to be served by Tier 3 and 4 companies such as:

• Fairpoint
• HictoryTech
• IowaTelcom
• CenturyTel
• nTelos

PivotMedia’s study shows that demand for rural residential broadband access exceeded the demand in urban areas during 2008. This increased demand may have stemmed in part from the astonishing drop in the number of traditional land lines in rural America. The first quarter 2008 drop of 4.27% in  traditional land lines accelerated to 7.14% by the fourth quarter. Clearly, U.S. consumers in rural markets are ready to make big changes when it comes to communications.

If you are working with cable or other communications firms that serve rural markets, remind these clients that a new marketing campaign to reach consumers who have been underserved by high speed capabilities should be a top priority.

[Source: Pivot Media study, Spring 2009]

Proving that smart phones are devices which inform, connect, and entertain their owners, the statistics on Apple’s App Store reveal exciting opportunities for both retailers and other application developers. Whether consumers are shopping via their mobile phones, checking the weather, or listening to music, those who use iPhones or iPod Touch devices have found 1 billion excuses to download a mobile application. While Apple is the largest player in this industry to date with 75,000 apps available, Research in Motion and Google are also in the market.

Here are the top categories of consumer downloads:

• Games 37%
• Music 28%
• Entertainment 24%

Here’s how many applications are consumers downloading:

• 1-5 44%
• 6-10 14%
• 11-15 5%

Here’s how consumers decide which application to download:

• Looking through what’s available 60%
• Consulting friends/family 30%
• Determining which applications seem popular 30%

At least one quarter of smart phone users have not downloaded applications leading some industry experts, including Rob Pegoraro, to complain that the process is still too cumbersome. It’s a safe bet that industry operators will fix that problem. For now, game developers and other application providers who charge for their products may need help marketing to their target audiences as competition increases.

[Source: Press release, PitchEngine, April 2009; Pegoraro, Rob. Fast Forward, Washington Post, 5.10.09]

Long before boxes of cereal or cookies land on the shelves at the local grocery store, manufacturers have spent significant sums on trade promotion management. The goal of these expenditures, which approach 14% of revenues according to some surveys,  is to influence retailer behavior. Specifically, trade promotions encourage retailers to take steps to increase sales of manufacturers’ products.

Trade promotions attempt to influence retailers to:

• Carry specific products
• Devote a set amount of shelf space/location to the products
• Set a specific price for the products

While manufacturers and retailers may be cutting some advertising budgets, manufacturers have a different plan when it comes to trade promotion spending in 2009 as revealed by a recent Consumer Goods poll:

• Decrease slightly over last year 33%
• Stay flat from last year 25%
• Increase more rapidly than previous years 20%
• Increase at the same pace as previous years 18%
• Decrease significantly from previous years 5%

The survey results indicate that firms are still willing to spend on trade promotion and they are also looking for systems to help them identify opportunities for improved efficiency and to measure return on investment. Share the results of this survey with your management consulting clients and develop a pitch to consumer goods manufacturers that allows them to increase sales along with trade promotion spending.

[Sources: Trade Promotion Management, Accenture, 2008; Trade Promotion Management, Consumer Goods Today, 5.1.2009]