TNG Blog

Four months ago I started an apartment search in Germany. It seemed to be enough time to find the perfect place that I would call home for the next couple of years. In an initial round, I filtered 8 apartments from 68 on the rental market at that time, each of which seemed to have what I was looking for. No crazy requests, I just wanted a window in each room (read LIGHT, since I don’t want to live in a box), hardwood floors throughout (since lots of places had tiles in the whole place…yes, bedroom too), and a balcony where I would be able to put my patio furniture. From those 8 apartments, only 3 actually had all of what I was looking for. Great! It felt like finding a place to live in Germany was an easy task. The only thing left was to negotiate the price and move into the ‘best deal’ since all of them seemed a bit pricey.

My first negotiating activity was a real disaster. The agent was obviously annoyed and irked by my attempts to negotiate a lower monthly rate. I really had good arguments why I thought that the rate should have been lower – from comparing the price to others on the market to naming all the investments that I would implement in the place and which would stay for the owner (since I’m not planning on taking with me, nor can I resell custom-made kitchen cabinets). No matter how hard I pushed his answer was “No, this is the price for this apartment. The owner knows that the place is worth this much and won’t rent it for less. If you don’t want it, someone will come along who will”.I guess that every product has its customer, one who’s willing to pay a particular asking price. Obviously I was not the right customer for this product.

Ok. Tough luck. 2 more to go.

The second  place, the second agent. Of course I had questions about the apartment! However, the agent found my extensive interest in details….frustrating and pestering . One moment he turned to me and actually said “Since you are asking too many questions, it’s obvious that you don’t like this place.” No! I liked the place just fine! I just wanted to know if holes in walls would be closed and if I could change or remove the curtains…. But, he didn’t have any patience for me. He had this demotivated look on his face, showing me that the visit was obviously over – since I was not the right customer for that place. I had too many ‘issues’ that the right customer would not. The right customer would be just happy, quiet and would take the place without question. I didn’t even get to the point of negotiating the price this time.

In the mean time, I was trying to rent out my own condominium in the Chicago area. After a month on the market, I started to rethink the price – was it too high? After a second month not renting the condo, it was clear that I had to lower the price if I wanted to get a tenant. People started to call and show some interest, and finally an offer came – even a bit lower than my reduced asking price – but hey I couldn’t afford to go on for much longer with paying rent on one side and a mortgage on the other side.

The third place was being rented out directly by the owners. I kind of felt for them since I saw myself for a split second. Decent renovations, decent location, more or less both I and my partner were satisfied…that is until we started hearing about all the conditions that we needed to fulfill “No animals, preferably no children, a garden that was exclusively mine had to be ‘this’ way,  you are not being allowed to paint the walls any color other than white…”. Should I mention that the rent would be raised 10% after a year and even more the subsequent year. Space for any negotiations? I think not! Did they seem a bit more emotionally attached to their ‘product’ than normal? Yup! Were they aware of the rest of the offers on the market ? No. They didn’t have an outsider (an agent) to even give them constructive advice about how to ‘sell their product’. In their eyes, they had a perfect product on the market and only a fool would pass and not rent it. They were doing a favor to the world by even putting their product on the market. I just wasn’t thankful for that (favor)….what an imperfect customer I was! Thank God!

Last year, I wrote a case study about wasted advertising money in the corporate world. This month, to no surprise, I have once again come across a similar situation. Call me a typical woman, but at least a few times a year I have to buy Vogue, as opposed to just flipping through it at one of the bookstores. So this month, I was perusing through the pages of the December issue of the iconic Vogue, described by book critic Caroline Weber in The New York Times in December 2006 as “the world’s most influential fashion magazine.” Weber points that the magazine I was reading had “long functioned as a bible for anyone worshiping at the altar of luxury, celebrity and style.” Yet she is not alone, as many others have pointed to its fame for images of high fashion and high society. And as I continue to skim the pages, as any good marketer, I find myself wondering about the magazine’s brand identity and the marketing activities of various fashion and lifestyle brands that advertise in this premier publication.

Let’s look at this from a few sides.

First, from the lens of Vogue, which – as mentioned above – has long held the reputation of luxury, high society, and high fashion. If one has enough nerves to flip through to page 246, where an uninterrupted 67 pages of content actually reside, one could see an 8-page spread on Tom Ford, 8- and 10-page layouts of the latest high fashion trends, 6 pages of cover girl Angelina Jolie, and a random assortment of additional stories on modern art, landscaping, and…Spider Man, the Rock Musical. Now if we move beyond the fact that less than 40% of the magazine’s 330-pages are actually devoted to content – other than advertisements and random empty pages like the Table of Contents – one can clearly see that the magazine still holds on to some glimpse of being the “world’s most influential fashion magazine.”

When one accounts for the fact that more than 90% of the magazine’s advertisements focus on some realm of fashion, style, and beauty (see chart below), one might even venture that, through the collective influence of moderate content and a barrage of advertisements, the magazine remains truly dedicated to fashion and style. But that is not my concern. Rather, I question whether Vogue remains true to its reputation as a beacon for “high fashion and high society.”

Part of the issue arises from the fact that, since taking over in 1988, current editor Anna Wintour has aimed to create a Vogue that is focused on new and more affordable ideas of fashion for a wider audience, in order to maintain circulation of the magazine. But something still does not feel right. You flip through the 120+ pages of content discussed above and you see a Balenciaga bikini for over $1k, a leather iPad case for $4k, and $200 Gucci sandals for the little one. As you continue through the content, all you see are high end items. There is nothing that is affordable for the masses. So, Vogue is still holding true to its reputation.

Or is it?

I begin to see a disparity in the brand – the content is truly a “bible for anyone worshiping at the altar of luxury, celebrity and style” yet the advertisements are a mishmash of sponsors that would pay. Are the same women praying for a Louis Vuitton life by the coast (p.8), a Chanel dress (p.22), and a diamond enriched Omega watch (p.26), the same ones that worship Gap (p.48-59), Target (p.82), and JC Penney (p.207), and drive a Chevrolet (p.136)? I think not. In fact, there is so much disparity that it does not make sense. After performing an in-depth analysis of the issue, I find that only about one-third (see chart below) of the advertising pages are dedicated to what I consider to be true luxury brands (e.g., Chanel, Louis Vuitton, Burberry, Rolex, etc).

So, Vogue is aiming to broaden its user base by soliciting advertisements from a variety of brands, yet the content that they provide truly focuses almost exclusively on the high end fashion and lifestyle domain. The reader, or the customer, ultimately ends up flipping through 200 pages of advertisements, perhaps reads an article or two, and maybe gets some ideas about fashion but might not be able to afford it. And then there are the brands that advertise in Vogue hoping to reach their target market.

Some of these companies should ask themselves several strategic questions:

• Are they reaching their target market?
• Is this an effective approach to reaching their target market?
• Are there better alternatives for marketing spend?

It is difficult to fully estimate the value of these advertisements, but I would certainly suggest that there are probably several companies whose marketing budget might be better spent elsewhere…Chevrolet and Gap included.

Idiot’s Advice for Small Business Owners: Small business owners and entrepreneurs that don’t have the luxury of wasting resources or time on a variety of marketing vehicles must choose wisely. Make sure that you thoroughly study your options and select those channels or vehicles within a channel that will most effectively allow you to reach and influence your target audience.