Archive for March 8th, 2011

Uh-oh … the recession hits Wal-Mart as consumers change their buying ways.

March 8, 2011

TakeAway: Wal-Mart, the world’s largest retailer, has had seven consecutive quarters of declining same-store sales. 

A variety of factors contributed to this, including new shopping habits, strong competitors and a loss of some “fill-in” trips.

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Excerpted from WSJ, “U.S. Sales At Wal-Mart Show Decline” By Stephanie Clifford, February 22, 2011

As the Christmas season approached, Wal-Mart Stores said it was fixing the problems in its United States division. It hired new executives, added merchandise that it had cut, and fought with Target and other competitors to provide the lowest prices over the holidays.

Company executives and analysts said consumers seemed to have changed their ways during the recession, and that has persisted into the sluggish recovery.

New shopping habits, like using less credit, relying more on month-to-month cash and buying in smaller packages, have hampered Wal-Mart’s ability to climb out of the sales slump. 

In addition, while consumers are still using Wal-Mart for big shopping trips, they are visiting drugstores and dollar stores for in-between purchases.

In the fourth quarter of 2010, the problems stemmed from several areas. Toy sales were down in American stores, though Wal-Mart had aggressively promoted prices and added back toys to its aisles. Apparel continued to be a problem. 

And in consumables — basics like toilet paper and soap — Wal-Mart said its prices and sizes were a problem for shoppers who continued to be on tight budgets.

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Dr, Pepper says “More taste for only 10 measly calories”

March 8, 2011

TakeAway: Will Dr. Pepper 10 be able to capture the elusive male diet drinker market?

With a strong campaign aimed directly at males they sure hope so. 

Allowing the drink to have 10 calories instead of 0 enables the drink to deliver a flavor closer to the original and they believe will differentiate their product from the crowded diet drink market.  

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Excerpted from AdAge, “Can Dr Pepper’s Mid-Cal Soda Score a 10 With Men?”  by Natalie Zmuda, February 21, 2011

Dr Pepper doesn’t want there to be any confusion. Its new 10-calorie soda is simply “Not for Women.”

Dr Pepper Ten, … targeting men, a bold move in a category that has had its fair share of marketing missteps. Coke Zero and Pepsi Max, …had difficulty nailing down the right message for a diet product that’s meant to appeal to men.

Aware of those missteps, Dr Pepper is rolling out an extensive test campaign for the new product, its packaging and marketing. Dave Fleming, director-marketing at Dr Pepper, called the test, which runs from now through June, “elaborate,” saying the strategy is atypical for the company, …

Dr Pepper Ten was created for 25- to 34-year-old men who prefer regular Dr Pepper but want fewer calories. And its inclusion of 10 calories, rather than zero like its competitors, allowed it to deliver a flavor closer to the regular version…

“We have a lot of excitement about this and wanted to give it fair treatment, so it would resemble a national launch in test markets,” he said. “We want to make sure that, if we do take this national, we understand all the variables.”

To that end, Dr Pepper Ten will be trotted out with commercials … A mobile “Man Cave” will also travel to each of six test markets, …The branded trailer will set up in “testosterone zones” such as ball fields or car shows and give men a place to watch TV and play video games. …

The packaging and marketing are both heavy on masculinity, but also clearly state the brand proposition, …

Mr. Fleming said he’s not out to alienate women, … “But we did the research, and it scored well with men and women.”

In theory, so-called mid-calorie sodas will appeal equally to men and women, with a sweet spot among 25- to 34-year-olds, said Bill Pecoriello, CEO of Consumer Edge Research. But he points out that Dr Pepper Ten is clearly intended to appeal to the target market staked out by Coke Zero and Pepsi Max. …

Mid-calorie sodas such as Dr Pepper Ten could be just the boost the struggling soft-drink category needs, as consumers look to trim calories from their diets and health advocates blame the fizzy drinks for obesity and diabetes. …some in the industry believe this in-between category could appeal to consumers, …”The performance we’re seeing from brands like Coke Zero, Diet Mtn Dew and Diet Dr Pepper indicates that diets and perhaps mid-cals may be the future route to growth for the soda category.”

 

 

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