Archive for the ‘Mktg – Segmentation’ Category

Macy’s targeting millennials … pssst: so is everybody else.

November 12, 2012

Punch line: Macy’s is launching 13 new brands and expanding 10 other existing labels that it believes will resonate with shoppers in the 13-to-30 age group.

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Excerpted from The Washington Post’s, “Macy’s launches new brand strategy to cater to millennials, the 13-to-30 age group”

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Macy’s new fashion offerings, which are being rolled out this fall and next spring, represent the first phase of the retailer’s intensive campaign to attract the highly sought-after … but challenging bunch. The tech-savvy group likes to spend and it likes brands, but shops differently.

In March, Macy’s restructured its merchandise team to focus on those shoppers and plans to make other major changes in the next three years to further rope them in. Those range from infusing tablets and other technology into the shopping experience to changing displays more frequently.

Boston Consulting Group released a study earlier this year based on a survey of about 4,000 millennials.

The research showed millennials trust their Facebook friends more than corporate ads or experts, and tend to favor spending at specialty stores, discount stores, online or outlet stores.

And they put a premium on speed and convenience.

Christine Barton, a partner at the Boston Consulting Group, says the department stores have a big opportunity to grab this customer, but they need to “refreshen their franchise.”

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Posted in Millenials, Mktg - Brands - Private Label, Mktg - Segmentation, Mktg - Shopping Behavior | Leave a Comment »

Chasin’ the ladies … ditch the wine, pour the whiskey.

November 10, 2011

Take Away: Jim Beam looks to boost its market share by diversifying its product portfolio with lighter, fruiters drinks aimed at women. Jimmy hopes to drive new in-home occasions with females, tapping into the ‘ladies night-in’ concept.

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Excerpted from Businessweek.com, “Jim Beam pulls a gender bender”

… After 216 years of catering to guys’ guy, with tattooed singer Kid Rock as a pitchman — Jim Beam whiskey is now chasing women.

“Two years ago, 100 percent of our marketing was geared to men,”

Beam  is now touting women-friendly Courvoisier cognac infused with red wine, tart Pucker vodka, and low-calorie Skinnygirl-brand cocktails … trying to reach female consumers with lighter or fruitier quaffs they can consume outside of bars and restaurants.…

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The gender-bending marketing shift happened almost by accident.

In 2009 the distiller introduced a black cherry-infused version of Jim Beam called Red Stag and signed Kid Rock to pitch the product.

As sales took off, Beam discovered that women were buying the sweeter concoction at almost three times the rate at which they typically bought bourbon.

Further research revealed what the company marketing executives came to call the “girlfriend connection … Women tend to drink with other women or in a very social setting.”

“We wanted to understand the emotional reasons why women drink wine or spirits.”

While women make up almost half of spirits drinkers, they consume just 25%  of the spirits sold — far less than their 58% of wine consumption,

“We started to understand how to move that wine occasion to a spirits occasion”

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Sales of Beam’s Sauza tequila also benefited from the women’s focus.

About 57 percent of the tequila sold in the U.S. is mixed in margaritas,

Two-thirds of those margaritas are consumed by women. Yet tequila marketers always targeted men.

Sauza began marketing itself around the notion of a “ladies’ night in,” hosting 1,000 in-home margarita parties and advertising on Food Network (SNI). …  the company teamed up with restaurants to brand so-called “Sauza-Ritas.”

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The bottom line: Beam is rolling out drinks targeted at women to fuel sales in the $19.2 billion spirits business, which grew 2.3 percent last year.

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Posted in Beverages - Soft Drinks, Mktg - Positioning, Mktg - Segmentation | Leave a Comment »

Forget demographics … segment markets based on buying behavior.

November 4, 2011

TakeAway: MasterCard and Visa are entering the business of market research by tracking online purchases and using the info to identify market segments and target them.

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Excerpt From WSJ: “Using Credit Cards to Target Web Ads”

Visa  and MasterCard are using what they know about people’s credit-card purchases for targeting them with ads online.

This strategy is a technological feat: tying people’s Internet lives with shopping activities.

Some of the ideas, for instance, a weight-loss ad to a person who just swiped their card at a fast-food chain — then track whether that person bought the advertised products.

Currently, Web ads generally are based on a person’s online behavior but not information tied to his or her identity or activities in the brick-and-mortar world.

“There is a lot of data out there, but there is not a lot of data based on actual purchase transactions. We are taking it a level deeper…it is a much more precise targeting mechanism.”

MasterCard is pursuing a plan to sell marketers an analysis of anonymous, aggregated data sorted into marketing “segments,” such as people with a high propensity to be interested in international travel.

Visa is also currently pitching the ability to use cardholders’ anonymous buying histories, in aggregate, to tailor the ads people see online.

That would let advertisers, for instance, show cat-grooming offers to people in one area, and dog-grooming ads to people somewhere else, based on the group buying behavior in the areas as a whole.

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Goya looks beyond Latinos …

October 22, 2010

TakeAway: For decades, Goya has been at home in Latino households. 

Now, it’s going after a broader, general market with a new advertising campaign, and for the first time in its 75-year history, Goya is using mobile technology in its efforts.

Goya Foods’ biggest general market effort runs counter to those of many other food companies, which are focusing their efforts on the growing Latino population in the United States.

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Excerpted from NYTimes, “Goya Aims to Expand the Neighborhood” By Tanzina Vega,September 23, 2010

 After conducting focus groups in New York and Houston in June, Goya learned that non-Latinos were looking to “spice up” their everyday meals.

 So, Goya is talking to general market consumers.

Rather than teaching the general population “to cook Latino,” the campaign encourages general market consumers to include Goya products in their everyday cooking (e.g. casseroles, salads and meatloaf) and not just for the occasional taco night.

As part of the effort, Goya worked with the Food Network’s Web site, Foodnetwork.com, and bought a one-day home page banner ad that resulted in more than 700,000 views.

The campaign will not appear on social-networking sites like Twitter and Facebook because Goya’s ad agency hasn’t seen ROI on them.

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Full Article:
http://www.nytimes.com/2010/09/24/business/media/24adco.html?_r=2&ref=global

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What the 2010 Census May Mean for Marketers

September 14, 2010

TakeAway:  The 2010 Census results will likely reveal the Hispanic market’s growing influence and help marketers understand they need to start focusing on this huge demographic change.  Few people realize that Hispanics are influencing the general market more than vice-versa.

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Excerpted from AdvertisingAge, “A Look at the Numbers Behind America’s Huge Demographic Shift” By Chiqui Cartagena, August 31, 2010

With the arrival of Hispanic Heritage month, people in the media and marketing worlds have already started to talk about what the new Census results could reveal next year.  This is the key point: It’s not about the Hispanic market, it about how these demographic shifts are affecting the so-called general consumer market.

 It wasn’t really until the 2000 Census that the dominance of Hispanics became a “new phenomenon.”  By the end of 2010, there will be 30% more Hispanics (50 million) than there will be African Americans (38 million) in this country. 

 Hispanics will continue to be a driving force behind America’s changing face, not so much through immigration but rather by births, with 60% of the U.S. Hispanic market growth coming from the natural births.

So, what does this mean to you?

  • Any marketing plan targeting youths must take into account Hispanics.
  • Marketing plans must take into account that Hispanics live in multi-generational households, therefore it is critical to understand how different generations influence each other.
  • The influence of the Hispanic market goes beyond the traditional states. Over 30 markets saw the Hispanic population increase by more than 100,000 persons in the past 10 years.
  • U.S. born Hispanics will require marketing campaigns that take into account their unique cultural background. It is critical to develop marketing campaigns that go beyond language and place of birth.

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Full Article:
http://adage.com/bigtent/post?article_id=145653

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Take an Apple to work ?

February 11, 2010

Takeaway: Apple is a favorite at home, and many Mac Heads are now demanding their favorite computers in the workplace.

So far, Apple has turned a blind eye to the corporate customer. Perhaps this is because team Jobs worries that the buttoned-up behemoths would taint its sexy consumer brand.

That said, the recent introduction of the iPad reminds us that the consumer may soon become maxed out with Mac gear and the corporate client may become more critical to boosting Apple’s bottom line. Could a clever multiple target strategy help Apple have its cake and eat it too?
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Excerpt from itbusiness.ca, “The enterprise opportunity Apple doesn’t want you to know about” by Jeff Jedras, February 8, 2010.
 
There probably isn’t a week that goes by without an enterprise IT manager hearing one of their users lament “why can’t I have one of those cool iMacs instead of this boring, grey PC?” It’s enough to make even the strongest IT manager run for the hills.

While IT had a list of tried and true answers to bar Apple for many years – cost of support, compatibility with Windows networks, cost of acquisition – those barriers have been coming down, one by one. New management tools make managing mixed networks simple. You can even run Windows on a Mac device, and the increased reliability of an Apple machine can net-out the marginal difference in acquisition cost.

So, increasingly, there is a stronger and stronger case to be made for bringing Apple into the enterprise market. The question is, is the enterprise a market that the fiercely consumer-focused company even wants to go after?

On that question, the jury is out. Apple declined several requests to be interviewed for this feature.

The enterprise is certainly an untapped market for Apple. According to a November, 2009 report from Forrester Research on Enterprise Platform Trends, enterprise Mac OS use was at just four per cent in June 2009, up from one per cent when Forrester first began tracking the statistic in 2006.
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Full Article:
http://www.itbusiness.ca/it/client/en/home/News.asp?id=56341&cid=6

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Of the 5 types of Americans … which are you?

January 7, 2010

Dr. Frank Luntz has used dozens of attitudinal, behavioral, and demographic questions to segment Americans into five statistically distinct psychographic categories that explain not just who they are, but also how they are likely to behave and their view of life around them.

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Excerpted from: WHAT AMERICANS REALLY WANT by Dr. Frank I. Luntz

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According to Dr. Luntz’s surveys, there are five segments of American consumers:

1. Thirty percent of Americans are Relationship People.

The largest segment of the American population, it’s also the youngest.

To them, relationships can mean friends, family, or spouse. Their whole idea of the good life is to be with someone all the time.

They get their satisfaction out of interacting with other people. They don’t care as much about jobs or careers. They are generally satisfied with their life today, but very nervous about tomorrow.

They don’t save; they spend, and they enjoy spending on other people as much, if not more than, on themselves.

2. Twenty-five percent of Americans are Spiritual People.

This is the oldest and most female-oriented of the five segments.

What unites them, in addition to the importance of religion and prayer, are the principles of simplicity and efficiency.

They don’t need or want to spend money to be happy.

They have older cars and TV sets; they don’t have TiVo or satellite radio.

They’re not just late adopters, they’re non-adopters because stuff doesn’t matter to them.

If Relationship People are the loudest group, Spiritual People are the quietest.

They tend to do things in their spare time that don’t require other people, such as reading and listening to music.

They appreciate the outdoors (they are environmentalists) and they have a respect for natural beauty.

3. Eighteen percent of Americans are Health People.

They’re younger than average, more male than female, and they’re the segment most likely to participate than to observe.

You won’t just meet this segment at the gym or on the basketball or tennis court — you’ll find them shopping at Whole Foods and having a snack at Jamba Juice.

They’re similar to the Spiritual segment in their desire to be outdoors, but they’re parallel to the Relationship segment in their desire to be with others.

They are the most physically active of all the groups and put a lesser emphasis on career and financial success.

4. Twelve percent of Americans are Control People.

These people can be very unpleasant to be around.

For them, it’s not about money; it’s about more time and less hassle.

They have everything planned out.

Their intensity is similar to the Health segment, but while the Healthy are engaged in physical activity, Control People are engaged in mental or intellectual activity.

Control People want to be doing something other than what they’re doing; they think today is awful, but tomorrow is going to be great.

This is the flip side, demographically, of the Spiritual segment in that these people are almost exclusively under 50 and more male than female.

They’re the mirror image in another way: Stuff matters. Their stereo is high-end, and their TV screen is huge. In fact, everything is bigger; they want the newest and the best of everything.

They’re willing to spend money, and they work longer hours than the other segments to be able to afford it.

5. Eleven percent of Americans are Financial Security People.

The fastest-growing segment, these people are always unhappy and dissatisfied, and in the current economic mess, they’re downright miserable.

They judge themselves by how other people judge them.

Their reputations mean more to them than they do for any other segment.

They’re the opposite of self-satisfied; they’re almost self-loathing.

They have a ton of material goods, but they buy things to make a status statement rather than to enjoy them.

They tend to be older and wealthier than average, although you’ll find plenty of people in their 30s in this segment.

They own; they don’t rent or lease because they want whatever it is to belong to them — and they’re dissatisfied when they can’t have everything they want when they want it.

 

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From: WHAT AMERICANS REALLY WANT. . . REALLY – The Truth About Our Hopes, Dreams, and Fears
by Dr. Frank I. Luntz

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Market segmentation is so yesterday … today, it’s self-selected “tribes”

November 13, 2009

TakeAway:  The power of the Web is undeniable.  It gives companies access to consumers in ways never thought possible.  Companies enjoy the luxury of leveraging online consumer groups for product development feedback, buzz generation, etc. 

Now, companies are flipping their segmentation strategies upside down and using consumer data gathered from the Web to build their segmentation strategies.  And, these companies are realizing cost and accuracy benefits.

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Excerpted from Strategy & Business, “The Promise of “Self Segmentation”,” By Nick Wreden, October 5, 2009

… Today, a community-based approach to segmentation — which is both less expensive and more effective than the traditional methodologies based on customer relationship management (CRM) systems — is becoming possible …

Self-segmentation provides a foundation for leveraging customer experience and input … The rise in social networks and online communities, combined with the new era of the Web-empowered consumer … consumers are increasingly segmenting themselves into communities, based on common characteristics, passions, interests, or needs. Such “self-segmentation” is likely to be much more accurate and reflective of consumers’ attributes …

Companies can now bind themselves to consumer communities of interest or “tribes,” … such self-selected communities not only reflect consumers’ true interests but also involve their connection to others with the same passions. This opens the door to fostering brand ambassadors, enabling customer collaboration, and facilitating word-of-mouth cross-fertilization …

Since relevant communities represent self-selected groups who share one or more interests, marketers can substantially reduce the costs, time, and toil required to identify, and segment, qualified prospects … and the communities provide a better guide to potential purchasing behavior …

Interactions within communities represent an ideal listening post, enabling marketers to glean direct insights without the filter of market research …

Engaged participants can provide product development guidance and identify shortcomings in service or other areas to help a company improve its brand …

Companies can utilize three approaches to leverage self-segmented communities — engaging with social networks, tracking online communication behavior, and mass customization …

Segmentation is vital as mass marketing slips into irrelevancy, with information overload causing consumers to block out many corporate communications … But CRM-based market segmentation can be expensive, complex, one-dimensional, and static. It fails to accommodate the multidimensional nature of consumers … It leads to top-down initiatives that view potential customers as targets to be blitzed with campaigns, ambushed with messages, and subjected to guerrilla marketing.

In this new era of branding, companies must focus on ethnic, cultural, religious, sports, or other segments, not markets. This pivot could be achieved through CRM systems, but self-segmented communities of interest provide a more effective alternative. Such communities can provide fast, low-cost market research, generate ideas and feedback about new offerings, help improve corporate and customer-to-customer service, strengthen relationships, provide an early warning system about problems, and promote favorable word-of-mouth. It all starts with finding communities united by a passion or an interest, and talking with them, not at them.

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Full Article
http://www.strategy-business.com/article/00004?pg=all

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Posted in AMS Concepts-Frameworks-Examples, Internet - Soc Networking, Internet Marketing - eCommerce -, Mktg - Segmentation | 1 Comment »

Boys will be boys … and that can be very profitable

October 16, 2009

TakeAway: Can anybody keep the attention of young males today? Maybe not, but that won’t stop us from trying.

Disney’s acquisition of Marvel is just the latest case of a company going after this fickle and easily-distracted segment.

You can’t blame Disney, however, as this segment has the potential to contribute greatly to overall profitability.

That is, as long as they finish their chores.

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Excerpted from BusinessWeek, “Disney’s Marvel Deal and the Pursuit of Boys” By Tom Lowry and Ronald Grover, September 10, 2009

The U.S. has 30 million males aged 5 to 19, and capturing their attention with a TV show, movie, or magazine article is a boon to advertisers. Boys (or their parental proxies) are ravenous consumers who spend billions each year on apparel, toys, and video games.

Big Media, faced with the loss of auto and financial advertising, is charging hard at this elusive demographic.

Exhibit A: Walt Disney’s $4 billion acquisition of Marvel Entertainment and all its superheroes.

Besides attracting more boys and balancing out Disney’s big following among girls, the Mouse House believes the Marvel acquisition will bolster Disney XD, a channel it is now using to target boys.

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Full Article
http://www.businessweek.com/magazine/content/09_38/b4147066139865.htm?chan=innovation_branding_top+stories

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Finally, a Rolls-Royce for the masses … well, kinda.

October 9, 2009

TakeAway:  Owning a Rolls-Royce is an undisputed symbol of wealth…and many would argue that the brand’s exclusivity is consumers’ primary motivation for purchasing and re-purchasing its cars.  Rolls Royce has decided to test the loyalty of its existing consumer base by offering a lower-priced version of its car and thus making the car attainable by a larger portion of society. Will this strategy backfire and alienate its existing loyal consumer base?

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Excerpted from WSJ, “Rolls-Royce Unveils its Economy Car” By  Vanessa Fuhrmans, September 17, 2009

… Rolls-Royce Motor Cars’ answer to the worst downturn in decades: Its new Ghost model, to be had for a mere $245,000 … Though the Ghost has the same hand-crafted interiors and famous grill, the sleeker and slightly shorter model costs about one-third less than the $380,000 starting price of the British car maker’s flagship Phantom.  As more people globally can afford a Rolls, though, the company faces a delicate balancing act: boosting sales while not diluting the brand’s exclusive cachet …

The Ghost’s launch comes at a critical time. Rolls-Royce sold a record 1,212 Phantoms last year. But as the economic downturn caught up with even the superrich, sales plunged 34% in the first half of this year, tarnishing what had been a bright spot for its German parent, BMW AG.  Meanwhile, Rolls faces growing competition for the lower rung of the upper crust from Bentley … Bentley sales have risen 10-fold … The success of Bentley’s Continental model (priced between $150,000 and $200,000) underscored the market to be had in the niche above Porsche and Mercedes-Benz but below Rolls-Royce …. 

The Ghost appears to be hitting the mark: Some 1,200 potential buyers have signaled “strong interest” or pledged to order one, about the same number of total Phantoms sold last year, the company said.  As the economy recovers, the car maker says it expects to sell at least 2,000 annually, boosting its total production nearly threefold.  The company has gone to great lengths to preserve the model’s Rolls-Royce quintessence, yet at a downsized price … Rolls-Royce … said 85% of the people who have expressed interest in the Ghost have never owned a Rolls, uncommon among Phantom owners. 

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Full Article
http://online.wsj.com/article/SB125312564687516787.html#mod=todays_us_nonsub_marketplace

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Grape Nuts Breaks the Mold By Targeting Men

March 31, 2009

Excerpted from WSJ, “Grape Nuts Takes Aim at Men” By Suzanne Vranica, Mar 26, 2009

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Seeking to revive a crunchy stalwart, cereal maker Post Foods is launching a new ad campaign for Grape Nuts that is aimed at men.

The cheeky campaign includes a special Web site on MSN with dozens of two-minute videos … which tout the cereal’s quality and offer advice, such as how to ask for a raise in a recession … The site also offers “The Guy’s Manual,” with tips on topics like restoring vintage cars. The campaign’s print ads, which will run in Sports Illustrated, feature men fishing and golfing and include the new slogan “That Takes Grape Nuts” … 

The campaign is a departure for cereal advertising, which has been dominated by wholesome images of mom and the family breakfast table. Even Grape Nuts, which is eaten mainly by men, has run ads targeting women …

While men are increasingly sharing grocery-shopping duties, the task is still handled largely by women, ad experts say. “Men will be entertained” by the ad, “but is it going to influence their purchase if they aren’t the ones doing the shopping?” asks Kristi Faulkner, a principal at Womenkind, a marketing firm.

“When you do something that is different, there is always some uncertainly,” says Steve Van Tassel, Post’s president. He says Post plans to step up its in-store marketing efforts to make sure that whoever does the shopping is aware of Grape Nuts.

Post is trying to stand out in the $6.6 billion ready-to-eat cereal category, where the Grape Nuts brand has been hurt by a host of competitors in the healthy-cereal category … Grape Nuts sales slipped 15% to $54.2 million during the 12 months ended Feb. 22 from a year earlier …  All Bran saw sales rise 30%.

Wall Street and the packaged-goods industry will be watching the campaign closely. Ralcorp’s (Ralston Purina) accquisition of Post, whose brands include Honey Bunches of Oats, Shredded Wheat and Pebbles, raised questions about how a company known for shunning advertising to keep prices low would handle brands that were largely built through marketing.  Ralcorp spent just $97, 837 on ads last year …

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Full Article:
http://online.wsj.com/article/SB123801803460241457.html

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Dr. Pepper Targets Video Game Junkies

January 30, 2009

Excerpted from the New York Times, “A Drink Backed by a Sports Hero (Wielding a Mean Game Controller)”, by Stephanie Clifford, November 19, 2008

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Dr. Pepper announced, for the first time, it is promoting a professional athlete on bottles that it will distribute nationally. But the shaggy-haired athlete on the label is not a traditional sports star: he’s a 21-year-old who has a three-year, $250,000 contract to play video games.

Dr Pepper is featuring the Halo 3 player Tom Taylor, who goes by Tsquared, on the labels, which will appear on about 175 million 20-ounce bottles from January to April.

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Video games are hugely popular with young men, who are playing them instead of watching television and reading magazines. Marketers are trying to advertise their products to this group by sponsoring tournaments or placing advertisements within the games themselves. (The Obama presidential campaign, for example, put ads on virtual billboards in the game Burnout Paradise.)

With the new labels, Dr Pepper is trying to grab the attention of gaming fans, who at Major League Gaming are largely men in their teenage years and early 20s.

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“The successful marketing of major stars is what sports leagues have always been about,” said Matthew Bromberg, the chief executive of Major League Gaming. “What’s really going on here is for tens of millions of young men, the aspiration to be a pro gamer is the new dream of sports stardom,” he said.

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Full article:
http://www.nytimes.com/2008/11/19/business/media/19adco.html?ref=technology

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The Wealthy Shifts on Luxury, Optimism, & Politics

October 21, 2008

Excerpted from AdAge “Study:Luxe Loses Luster for Wealthy” by Lucia Moses, October 2, 2008

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Fears about personal finances are bubbling over to America’s richest, says a new survey by American Express Publishing and researcher Harrison Group, whose findings bode ill for the already-softening luxury advertising category.

The survey, conducted Sept. 19-23 among 614 consumers with an annual household income of $100,000-plus—the top 10% of America’s families—asked how the market turmoil was affecting respondents’ spending plans…The vast majority of respondents—83%—said they were waiting for items to go on sale before buying.

Luxury is losing favor with this group; the percentage of people who said a little luxury was important in tough times declined to 50% from 61% in June. “What makes the survey a source of concern is that this top 10% represents over 50% of all retail spending,” Jim Taylor, vice chairman of Harrison Group, said in a statement. “It is affluent consumers who have kept the consumer economy afloat and whose purchasing is critical to the coming holiday season.”

Attitudes among the affluent have worsened throughout the year, with 48% of the country’s richest families saying they were worried about running out of money, up from 35% in April. Sixty percent said they believed the economy was in a recession that would last more than a year, up from 55% in June.

Optimism also is on the downswing. Fifty-five percent of respondents indicated they were optimistic about their future, down from 93% in 2005…

The survey also found that the Republican Party is losing its hold on the wealthy. The percentage of the affluent calling themselves Republicans stood at 34% in September, down from 46% in 2006, the survey showed. An equal percentage said they were independent, up from 19% two years ago…findings suggest that the affluent still favor Republican candidate John McCain for president but that there are enough undecided wealthy voters to tip the scales in favor of Democratic hopeful Barack Obama.

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Full article:
http://www.brandweek.com/bw/content_display/news-and-features/retail-restaurants/e3id41521fe85d4537f1ae883da0ed6db34?imw=Y

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Wendy’s Changes its Target, Leaving the Red Wig Behind

October 16, 2008

Excerpted from the Wall Street Journal “Wendy’s Comes Up With a New Strategic Recipe” by Janet Adamy, September 29, 2009

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Wendy’s plans to target older customers, change its value menu and improve items like its french fries as its new owner takes over.

Wendy’s new chief executive, Roland Smith, says the chain plans to market to older customers…Wendy’s has struggled to increase sales and profit since Mr. Thomas died six years ago, and that led directors to put the chain up for sale last year.

In an interview, Roland Smith, president and chief executive of the new Wendy’s/Arby’s Group Inc., said executives plan to reverse the previous’ management team’s strategy of courting 18- to 24-year-olds and will instead aim its marketing at customers ages 24 to 49. A new marketing campaign that focuses on the quality of the chain’s food “is a breath of fresh air from the red-wig campaign,” a more offbeat series of commercials that Wendy’s ran last year featuring young men wearing red wigs, Mr. Smith said.

Mr. Smith said that, like rivals McDonald’s Corp and Burger King Holdings Inc., Wendy’s plans to change its value menu, which includes three items for 99 cents, as it faces higher ingredient and labor costs. He said Wendy’s is considering higher price points for some items and looking at putting different items on the menu…

Mr. Smith acknowledged that Wendy’s hasn’t done a good-enough job of creating products to bolster sales and fend off competitors. After talking to franchisees, he decided that the chain also needs to improve the quality of existing items and emphasize a message of freshness in its marketing. In particular, he wants Wendy’s to offer better french fries, sandwich buns and bacon.

For Wendy’s, one of the keys to increasing its sales and profit will be breaking into the breakfast business…Wendy’s has been serving breakfast at some locations but has yet to hit on a successful strategy. Mr. Smith said the company needs to reformulate some of its breakfast items and improve its coffee, which is made by Procter & Gamble’s Folgers. Wendy’s also is testing espresso drinks in some stores.

Another key to improving sales will be remodeling thousands of Wendy’s restaurants…The credit crunch is likely to make that more difficult for franchisees who need to borrow money to fund the renovations. “It’s going to be tougher to get money to buy stores and rebuild stores”…

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Full article:
http://online.wsj.com/article/SB122270629158386159.html

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Its His Turn: Marketing to Dad’s

October 16, 2008

Excerpted from Marketing Daily “Marketing to Today’s Dad Requires New Approaches” by Karlene Lukovitz, September 22, 2008

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Many Generation X and Y fathers, in particular, are a new breed who are more involved with their children’s lives and more likely to make day-in, day-out types of product purchases–not just the home electronics or riding lawnmower buys, confirms a new study from Packaged Facts authored by Silver Stork Research.

Marketers looking to reach beyond appealing mostly or only to mothers to tap into this “Dad Factor” need to stop reflexively “thinking pink,” say the analysts. They should gear their brands’ media outreach and benefits positioning to these new fathers–who have a markedly different purchasing behavior than moms…

Who are these new generations of dads? They are less defined by gender stereotypes and see much less of a dividing line between men and women…these dads approach parenthood with a team attitude. Gen X and Y dads are positive, comfortable with their gender, optimistic about being parents …and much more active consumers than dads of previous generations.

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Key facts about newer-generation dads and marketing effectively to them, per the report:

Dads are men–meaning that parenthood doesn’t change their overall approach to the world; it just expands it.

Like mothers, fathers’ key concerns regarding their children are education and health…

Dads don’t like to browse and shop, at least when it comes to family-oriented products… However, they do have a propensity to make impulse purchases–an opportunity for marketers.

Electronic media and the Internet are key…

New dads are attracted to products that are practical and solve a problem. They put quality before price…At the same time, marketing should seek to leverage these dads’ appreciation of a humorous element in…and seek to add an element of fun to the products themselves. Fun and play are cornerstones of interaction between these dads and their kids.

Marketing/advertising should reflect these dads’ parental motivations to give their kids what they want, make their kids happy and be perceived as heroes by their children.

Marketing should include images of dads interacting with kids, especially “real” dads/kids, to reflect the more positive, involved image to which younger dads relate… Product packaging should take male-appeal into account…

Including products or product appeals geared to dads within promotions primarily targeting moms can also be effective.

Edit by SAC

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Full article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=91038

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Marketing to hockey moms …

September 26, 2008

Excerpted from BrandChannel.com: “Do Hockey and Soccer Mom Brands Share Goals?”, Abram Sauer, September 11, 2008

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Alaska governor Sarah Palin opened a (marketing) debate: Is hockey mom the new millennium’s soccer mom, just as soccer mom was the 1990’s version of the 1980’s super mom? Are soccer moms and hockey moms different? Is the branding that represents them accurate, or are the terms just oversimplified stereotypes?

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There are about 350,000 hockey players under the age of 20 in the US, and that these hockey families have a median household income of nearly US$ 100,000—which is far higher than the national average.

A soccer mom is “most likely married, aged late 20s to early 40s, probably driving an SUV; she works, Some are college graduates and some are not.”

“The demographics of hockey moms and soccer moms are very similar … Hockey moms might have a reputation for being a little tougher—perhaps due to the nature of the sport.”

Celinda Lake — often credited for coining the term “soccer mom” in the 1990s — explains that, despite an average household income of almost US$ 100,000, “Hockey moms are more blue collar than soccer moms,”

The hockey mom demographic is also called “Wal-Mart Moms.”

“Hockey moms’ respond to male communication styles—competitive, assertive, hierarchical, us vs. them. Soccer moms respond to more female communication styles—cooperative, focused on common ground, connecting and sharing values.”

There is a consensus that “hockey mom” has a more blue-collar feel: “Some have gone so far to say that hockey moms are anti-intellectual and worse.”

Paradoxically, the generalization of “soccer moms” has made many women anxious to disassociate themselves from it. 

Often, when you think of a soccer mom, you think of a mom consumed with her kids driving a mini-van. You don’t have pictures of a highly accomplished career woman, or a technologically savvy woman, or a world leader. That’s why the label is so loaded, you associate many attributes to it that may or not be true of a particular woman.

Brands looking to reach these moms need to make solid information readily available: “There’s still a perception out there that soccer moms are only online to email, do a little shopping, and perhaps visit blogs. What they do want is information. Women are going online to research everything from buying a car, to health care insurance, to planning the family vacation. They want a lot of information, not just fluffy celebrity stories.

Women often have more questions than men do, which is another reason she is going online to do research on information she can’t find in the stores or from the sales people. There’s a huge opportunity here for companies to provide answers to her questions. Because even if she shops offline, that search very often begins online.

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Full article:
http://www.brandchannel.com/start1.asp?fa_id=440

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Segmentation: Unlocking Superior Profitability

September 11, 2008

Excerpted from The Boston Consulting Group, “Consumer Segmentation: A Call To Action”, by Mary Egan and Jean-Manuel Izaret, July, 2008.

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Segmentation should be based on a combination of qualitative and quantitative data.

Qualitative research allows a company to explore its category from the consumer’s perspective and learn how consumers think about, shop for, and use its products. The identified behavioral and attitudinal factors the qualitative phase must be supported with a rich set of quantitative data .

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Segmentation should be designed to yield specific business actions that will result in measurable performance.

The segmentation scheme that will have the greatest financial impact can be identified by focusing on three areas: 

1. Category involvement

2. Segment profitability

3. Opportunities for action

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Category Involvement:

Assesses the degree to which consumers consider a product category important given their needs, emotional makeup, values, and interests.

  • Most consumers can identify at least a couple of categories for which they have a special affinity. Such shoppers may make up as little as 20% of the consumers in a category but may be responsible for as much as 70-80% of its sales.
  • Sociodemographic segmentations (age, race, income) are mostly inadequate at predicting consumer spending. They may make it easy to identify and track consumers, but they don’t necessarily lead to effective actions.
  • Occasion based segmentation may prove more effective than one that looks at consumer alone.

Implications: Segmentation surveys should focus on category-specific attitudes and avoid general questions not relevant to the category.

The explanatory power of the segmentation comes from the link established between category-specific attitudes and the particular kinds of behavior they produce.

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Segment Profitability:

Quantifies profit pools by segment and prioritizes them by looking at the proportion of consumer spending by channel, the frequency of splurging or trading up in the category, and the proportion of buying at full price versus taking advantage of discounts, sales, or promotions.

Even in an uncertain economy, there remains in almost every category a segment of highly involved and highly profitable consumers whose emotional attachment to the category largely insulates it from economizing decisions that consumers make elsewhere to cut back.

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Opportunities For Action:

Business actions a company intends to take as a result of the segmentation effort.

Possible levers to improve value creation: pricing and promotional strategies, consumer marketing messages and channels, new products and sub-brands, customer retention strategies, new retail concepts.

Begin with a clear hypothesis about which actions will achieve the company’s objectives and make sure that those actions are addressed in the research design and analysis.

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At the very minimum, a segmentation should answer the following questions:

  • – Which consumer segments represent the largest profit pools in our category?
  • – What is our share of wallet across segments today?
  • – How should we prioritize the various growth opportunities within and across segments?
  • – What messages and offerings will command the attention of these consumers?
  • – How can we position our brands for growth against competitors and one another?
  • – What changes should we make in order to increase share among targeted segments?

Edit by DAF

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Full article:
http://www.bcg.com/impact_expertise/publications/files/Consumer_Segmentation_July_2008.pdf

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