Archive for the ‘MARKETING’ Category

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Buying Designer Duds on TV at 3 am? Don’t Mind If I Do…

December 13, 2010

TakeAway: TV shopping is thriving at a time when, by many accounts, it should have died under a crush of new online competition.

High-end fashion designers are flocking to sell their first mass collections on the air, entering a space once dominated by obscure exercise equipment and dowdy tchotchkes. 

While traditional retailers have had to contend with a fickle consumer, TV-shopping sales this year have been robust.

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Excerpted from WSJ, “The Golden Age of TV Shopping” By Elizabeth Holmes, November 11, 2010

QVC and HSN dominate the business, with sales last year of $7.4 billion and $2 billion, respectively. Each reaches just under 100 million U.S. households and broadcasts live 24 hours a day, every day of the year except Christmas.

One surprising source of support: online shopping. The Internet has helped make consumers more willing to buy merchandise without first seeing or touching it in a store.

The model also benefits from the data the networks gather on their shoppers, which allow for carefully targeted marketing. Viewers convey their opinions when they call in to pay, through calls on the air and via website reviews . HSN even keeps track of sales by the minute, which helps it to evaluate its designers and hosts and to adjust its sales pitch. As each segment is filmed, producers can watch a monitor that shows the number of items sold and other data, including the number of callers waiting to buy the item.

TV-shopping networks’ proximity to customers is a big draw for high-end apparel designers, many of whom rethought their businesses during the recession. As retailers cut inventories, designers became more open to other sales channels. The average price of an item sold on HSN is around $60, but the influx of high-end designers is helping to push the average price higher. HSN also adopted a softer selling style pitched to more-upscale customers. Rather than using high-pressure tactics, it emphasizes making the item seem desirable—in an entertaining way—by showing how a garment drapes on a model, for instance.

The proposition wasn’t risk-free for the designers. Adding a new outlet could upset the department stores that account for a big chunk of their sales, and cheaper goods could potentially tarnish their image.

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Full Article:
http://online.wsj.com/article/SB10001424052748703805004575606463489605440.html?mod=djemMM_t

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Posted in Mktg - Distribution Channels | Leave a Comment »

Kraft Tells Kids and Adults Like to “Say Cheese!”

December 9, 2010

TakeAway: Kraft continues to build on the momentum of its Macaroni & Cheese , which is enjoying a sales boom as a result of consumers’ focus on economical comfort foods. 

The latest news is the rollout of a new logo and contemporized package designs featuring a “noodle smile” intended to elicit positive emotions and memories associated with the iconic, 73-year-old brand.

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Excerpted from Marketing Daily, “Kraft Mac & Cheese Gets New, Unified Look” By Karlene Lukovitz, Dec 6, 2010

The smile is the key element in a new, cross-portfolio visual identity. The new look began to appear on Kraft’s new Homestyle mac and cheese line and smaller-volume products within the brand’s portfolio over the summer, but is just starting to be seen on the flagship Blue Box line. The new package design will be fully rolled out by first-quarter 2011.

Both the noodle smile and its use as a unifying element in the logo now being used across the brand portfolio reflect consumer research. “Smiles, joy and happiness” were consumers’ key associations for the brand, and they also made it clear that in their minds, the three product lines then within the portfolio – Macaroni & Cheese Dinner, Deluxe and the microwaveable products originally named Easy Mac Cups – as a single mac and cheese brand.

“We had been treating them separately, but we recognized through consumers that there was a huge opportunity to accelerate the long-term, sustainable growth of this key Kraft brand by treating it as an iconic mega-brand,” said Kraft’s North America senior marketing director of meals.

In addition to the logo, this unified approach spurred a name change for the microwaveable cups, to Kraft Macaroni & Cheese Dinner Cups. Those products, launched in 2006, are now generating over $100 million in sales, according to the Chicago Tribune.

The consumer branding research also ultimately helped inform the current “You know you love it” integrated campaign that was launched in May and focuses on tapping the sales potential for adult consumption of the brand’s products.  The Homestyle line launched this past spring, which includes breadcrumbs and is more akin to the “home-made”-like mac and cheese versions served in restaurants, also emerged from this broadened strategy.

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Full Article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=140566

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A very soft sell from Ikea in China

December 8, 2010

TakeAway: Even though the average Chinese consumer can’t afford most of the furniture in Ikea, the company is encouraging potential customers to spend a lot of time in its stores.

Eventually when individual purchasing power catches up to China’s macroeconomic growth, the company hopes to be top-of-mind for that new bed or sofa.

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Excerpted from Bloomberg Businessweek, “In Ikea’s China Stores, Loitering Is Encouraged,” by Michael Wei, October 28, 2010

Yang Shuqi paces the aisles of an Ikea store in Beijing, looking for a “small bed with toys.” She’s not planning to buy one—her grandson Beibei just needs to take a nap.

Unfortunately on this Saturday afternoon, every bed in the 43,000-square-meter (463,000-square-foot) store is occupied, with some children and adults fast asleep under the covers.

Managers at the Swedish furniture retailer don’t mind. They figure that the more customers choose to relax in its Western-style showrooms or grab a cheap snack at the in-store restaurants, the more likely they’ll be to make a purchase once their incomes catch up with their aspirations. …

Ikea plans to more than double the number of its stores on the mainland by 2015, to 18, on a bet that incomes in China will continue growing at a fast clip. (Per-capita gross domestic product has more than tripled in the past decade alone). …

Market researcher Euromonitor International expects China’s home-furnishings market to surge 17 percent this year, to $28 billion. “Government stimulus spending and favorable policies toward retailing and consumer lending have encouraged overall retail growth in China,” says Alex Liu, a Euromonitor analyst in Shanghai. Ikea, which has been in China since 1998, doesn’t break out sales for the country; Euromonitor figures the Swedish retailer has the biggest share of China’s home-furnishings market, at about 7 percent. …

Even after years of record-breaking economic growth, however, China’s per-capita gross national income ranked 120th by purchasing power last year, according to the World Bank. So, for now, there’s a lot more looking than buying for many Ikea visitors. At the Beijing store, Xu Nan, a 22-year-old college student, had one of her friends snap a photo of her lounging on a black Vreta sofa that sells for 7,999 yuan ($1,197)—the equivalent of one-third of China’s annual per-capita GDP. …

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Full Article
http://www.businessweek.com/magazine/content/10_45/b4202022164114.htm

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Millennials say “red” or “white” … or a Miller Lite

December 7, 2010

TakeAway: 70 million millennials’ (loosely defined as those born between 1980 and 2000) taste for adventure, quirkiness and convenience will drive the market in the coming decade.

They are taking up wine at an earlier age than Gen X-ers and will buy wine just about anywhere – including the corner convenience store.

Moreover, 20 million of them have yet to turn 21, meaning they will become an even more powerful force. 

Experts say millennials, as opposed to other generations, have no fear of asking for wine advice, but a lot of them seek it from Facebook friends and on Twitter – which is leading winemakers to invest in social media.

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Excerpted from AdAge, “Millennials: the Great White Hope for Wine Industry” By E.J. Schultz, December 6, 2010

Wine marketers have only recently started zeroing in on the market, as opposed to other lifestyle brands which have been tracking the generation for many years.  The most recent player is 7-Eleven, which convened a focus group of millennials before launching its latest line of proprietary wines about two weeks ago. The brand, called Cherrywood Cellars, is priced at $7.99 to $8.99 to lure young adult drinkers whom the convenience store chain says might be watching their wallets more closely than Gen X-ers and baby boomers during the economic downturn.

Although beer remains the beverage of choice for millennials, accounting for 42% of their alcoholic drinks, wine captures 20% — up from 13% for Gen Xers when they were a similar age 10 years ago, according to Nielsen. Drinkers tend to shift to spirits and wine as they get older. If that trend holds, wine will account for 26% of all alcoholic drinks consumed by all U.S. generations in 10 years, up from 24% today, while beer will fall from 41% to 38%, according to Nielsen.

The test for marketers is to gain loyalty from young drinkers whose tastes are only now emerging. For some wine companies, that means putting members of the generation in charge of their brands. At Treasury Wine Estates in Napa, for instance, a 26-year-old is a member of a team of 20- and 30-somethings planning the national launch early next year of Sledgehammer, which is targeting the male millennial market.  Marketed as a “no-fuss” wine, the brand “eschews really traditional wine speak” like “this smells of cherries and berries and that type of thing.”  But the wine will also seek to subtly educate the new generation of wine drinkers, possibly using booklets of wine facts presented in a way that’s “funny and sarcastic.”

Some companies have formed special millennial divisions, such as The Wine Group, maker of Franzia, whose Underdog Wine Merchants unit is enjoying big success with Cupcake Vineyards. The brand was the 14th-best-selling wine for the four-week period ending Oct. 31, with sales jumping 250%.

Still, marketers risk overplaying their hand if they reach out too aggressively to the generation, known for its suspicion of overt selling tactics. For instance, some industry executives are noticing a backlash against trendy, edgier wine labels.

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Full Article:
http://adage.com/article?article_id=147474

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Posted in Beverages - Soft Drinks, Mktg - Consumer Behavior, Trends & Milestones | Leave a Comment »

Finding “Good Targets” in the Digital Age

December 6, 2010

TakeAway:  To find the “best” customer targets, marketers need to include digital and social behaviors into the profitability equation.

In addition to revenue measures such as lifetime value, current spending in category in dollars, current brand share, number and types of products or services purchased, and brand switching history/potential, there are also several other characteristics that make one customer more valuable than another because s/he’s easier to get and keep, as well as engage as co-marketers.

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Excerpted from AdAge, “How to Define a ‘Good Target’ in the Digital Age” By Kevin Clancy and Peter Krieg, November 17, 2010

Marketers have to integrate traditional and digital paid advertising with “owned” properties such as the brand’s website, as well as traditional and social “earned” media such as news articles and tweets in a way that gets them the biggest bang for their marketing dollar.

To separate the “best” from the rest, marketers need to find customers who are:

Less price sensitive. Unless you’re Walmart and want to grab share among the folks who put price above all other brand considerations, price insensitivity is another important indication of a buyer’s value to a brand and one particularly relevant these days.

Struggling with big problems. The bigger the problem your brand can solve, the bigger the market response.

Interested in new products and services from the brand. Introducing new products and services can generate the kind of organic growth companies crave. So why not ensure that new products and services will generate bottom-line growth by narrowing in on the customers most interested in considering the latest offerings from a brand or company? Apple’s pretty much got this one down.

Will advocate for your brand. The greater the level of influence a buyer has among her social networks, the more a brand’s marketing ROI will benefit.

Socially connected on the web. Because of the speed and number of tools available to customers to spread information about product and services online, word-of-mouth activity is even more important to capture in a digital environment. The more active and engaged a customer is with different social media, the more valuable he can be to a brand. Ford chose 100 20-something YouTube storytellers who’d developed a fan community of their own and gave them a Fiesta for six months. Each month they shared their experiences on YouTube, Flickr, Facebook and Twitter. Ford received 50,000 requests for information on Fiesta – almost entirely from new-to-Ford customers – and sold 10,000 units in the first six days of sales.

Rather than look at each of these things separately, though, marketers can and should bring together all of these “proxies for profitability” with financial data to calculate a single measure of value.

From an operational standpoint, then, marketers need to look for customers who are:

Distinct in terms of needs and wants. The more homogeneous and anticipated a target group’s needs and wants, the easier time marketers will have developing compelling positioning and messaging that breaks through in traditional and digital channels.

Relevant to traditional and digital communications decisions. Get a sense of how high-value customers use traditional, digital and social-media communications throughout the pre- and post-purchase process, and in particular, how they like to interact with a brand within different communication channels.

Findable in syndicated media databases. The “best” communications channels – either current or prospective – are the ones with a disproportionate number of high-value customers.

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Full Article:

http://adage.com/cmostrategy/article?article_id=147155

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Posted in Mktg - CLTV, Mktg - Loyalty Programs | Leave a Comment »

Market researchers say “let me look into your eyes” …

December 3, 2010

TakeAway: Packaging is an important purchase decision factor when consumers are at the store, ready to buy.

A great product with poor packaging might be passed over for a sleeker packaged alternative.

That’s why several brands are turning to eye tracking research to gauge how consumers’ eyes fixate on products across a shelf category.

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Excerpted from Brandchannel, “The Eyes Have It: Brands Conduct Staring Contest With Consumers,” by Barry Silverstein, November 30, 2010

It sounds like science fiction, but the best way to know whether or not consumers find brand packaging appealing may be to look into their eyes. It turns out that consumer brand companies like Procter & Gamble and Johnson & Johnson are doing just that.

Testing new brand packaging or a new product with consumers has always been a high-risk proposition. Focus groups, surveys, and other traditional consumer research techniques offer some insight, but they are hardly definitive.

Companies with millions of dollars invested in brands want a more accurate assessment of whether or not a product will resonate with a consumer.

Christian Simms, associate director of consumer market knowledge for P&G’s Herbal Essences and Pantene brands, tells Packaging World, “What consumers say and what they react to is a very different thing than what they spontaneously react to. We’re interested in what they can tell us without saying it to us.”

That’s why P&G uses eye tracking research for answers. Eye tracking is not a new science. It has been used for over twenty years in the military and for medical applications. …

In a typical eye tracking experiment, an individual consumer is shown, for example, 6-foot wide store shelves on a screen. The consumer views the shelf categories in this simulated shopping environment. Using a joystick, the consumer moves from one category to another. While she’s doing so, her eye movements are being recorded at 60 readings per second.

The collected data is used to create a heat map of fixation readings; the more intense the color in the heat map, the higher the number of viewing fixations. The data is also analyzed so that the marketer knows the percentage of consumers who “actively fixated” on each product or brand on a shelf. …

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http://www.brandchannel.com/home/post/2010/11/30/Eye-Tracking.aspx#continue

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Transparency Tops CPG Trends According to Mintel

December 2, 2010

TakeAway: Grappling with product content and marketing approaches in the face of growing consumer concerns about obesity and other chronic health problems will continue to be one of the biggest issues affecting global food and beverage makers’ product development and marketing strategies in 2011, according to a new, category-spanning CPG trends analysis by Mintel.  

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Excerpted from Marketing Daily, “Transparency Issues Among Top ’11 CPG Trends” By Karlene Lukovitz, November 5, 2010

Major CPG trends continuing or growing in importance into 2011:

    * Redefining “natural”, related to ongoing trend of transparency.  In addition to the success of products featuring “no high fructose corn syrup” on their labels (such as Yoplait’s Simply … Go-Gurt), one factor driving the success of certain “retro” products (another key CPG trend), like Pepsi Retro, is use of sugar instead of HFCS.

    * Shift from covert to overt marketing of formulation changes, but will depend on ingredients and geographic region.

    * Professional products for amateurs (e.g. carpet cleaners to hair-care products). Products enabling consumers to DIY instead of paying professionals continue to grow in number.

    * Less is more, redux. On the food/beverage front, lifestyle simplification tied to convenience and economical solutions (with environmentalism playing a secondary role) both ties into and counterbalances the more-professional-at-home-cooking trend. Examples include Starbucks’ Via or beverages positioned as full meals in a can or bottle.

    * Econo-chic. Luxury is making a comeback, but in limited, selective ways. CPG products positioned as “small treats” stand to gain.

    * Instant results, particularly in the personal care category.

    * Simplicity for older consumers. On the other hand, Baby Boomers and pre-Boomers increasingly want products that deliver simple but realistic results, rather than ones promising instant miracles.

    * More cradle-to-grave marketing. Example: the Nestle Nesquik line spans products targeted to children under six up to a Gourmand variety for adults.

    * Blurring categories. Many CPGs can no longer be slotted readily into a single category — shifting the focus from labels and branding to benefits, and creating opportunities, along with some confusion. Examples include Sunkist Solar Fusion (a fruit-flavored, carbonated drink with caffeine) and L’Oreal’s Perfect Clean Foaming Gel (featuring an integrated “scrublet”).

    * Personal hygiene comes out of the closet. More open marketing of what were once considered highly personal items.

    * Sustainability still focused on basics. Consumers continue to reduce, recycle and reuse, and continue to be interested in buying “green” products — as long as they don’t cost more.

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Full Article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=138944

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Amazon’s impressive numbers … prime numbers, that is.

December 1, 2010

TakeAway: Customer loyalty can be a difficult thing for a retailer selling undifferentiated goods, especially on the internet.

But marketing revolves around people and forming relationship bonds with customers through effective loyalty programs can reap big rewards.

Just ask Amazon …

Amazon’s Prime customers account for only 4 percent of customers but account for as much as 20 percent of overall sales.

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Excerpted from Bloomberg Businessweek, “What’s in Amazon’s Box? Instant Gratification,” by Brad Stone, November 24, 2010

… Amazon Prime may be the most ingenious and effective customer loyalty program in all of e-commerce, if not retail in general.

It converts casual shoppers … who gorge on the gratification of having purchases reliably appear two days after they order, into Amazon addicts.

Analysts describe Prime as one of the main factors driving Amazon’s stock price—up 296 percent in the last two years—and the main reason Amazon’s sales grew 30 percent during the recession while other retailers flailed.

At the same time, Prime has proven exceedingly difficult for rivals to copy: It allows Amazon to exploit its wide selection, low prices, network of third-party merchants, and finely tuned distribution system, while also keying off that faintly irrational human need to maximize the benefits of a club you have already paid to join. …

Amazon relentlessly promotes Prime in press releases and on its home page, and this year started offering free Prime trials to students and parents.

The company declines to disclose specifics about the program, though analysts estimate it has more than 4 million members in the U.S., a small slice of Amazon’s 121 million active buyers worldwide.

Analysts say Prime members increase their purchases on the site by about 150 percent after they join and may be responsible for as much as 20 percent of Amazon’s overall sales in the U.S.

The company’s executives acknowledge only that the program gets people to buy more—and more kinds of items—on the site. “In all my years here, I don’t remember anything that has been as successful at getting customers to shop in new product lines,” says Robbie Schwietzer, vice-president of Amazon Prime and an eight-year veteran of the company. …

Amazon now offers Prime in the continental U.S, Britain, Germany, France, and Japan, and Schwietzer says the company is moving toward guaranteeing Prime shipments within a day instead of two days.  …

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Full Article
http://www.businessweek.com/magazine/content/10_49/b4206039292096.htm

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Posted in Mktg - Loyalty Programs | Leave a Comment »

Pass the sea salt … now, there’s a gamechanger is the French Fries War.

November 30, 2010

TakeAway:  Wendy’s announced a national marketing plan for its new recipe for French fries, the biggest overhaul of its fries in 41 years. 

Wendy’s CMO admitted fries “are something we hadn’t been a leader in, in the past.” 

The $25 million campaign aims to educate consumers about Wendy’s new fries that it hopes will compete mightily against McDonald’s.

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Excerpted from NYTimes, “Wendy’s Rethinks Fries in Nod to More Natural Foods” By Tanzina Vega, November 21, 2010

For the last year, the company has been examining its product line for opportunities to promote food made with more natural ingredients. Wendy’s “new natural-cut fries with sea salt” use Russet Burbank potatoes and are thinner and crisper than the current fries and will be unpeeled.

The idea is to provide an alternative to McDonald’s, which has long been the leader in French fry sales. The Wendy’s campaign includes two television spots that will run on cable and network stations such as TBS, VH1 and Bravo and during shows such as “Conan” and “Lopez Tonight.” The campaign includes two radio commercials that will air nationally, as well as billboards around the country to entice people to select Wendy’s when they get hungry.

The digital campaign includes the use of the Wendy’s Web site, a Twitter account, a Facebook fan page and digital banner ads. The company’s YouTube channel will feature an ad for the fries and the background of the Wendy’s Twitter account page will also feature art for the fries and a “Fry for All” app that lets users select a box of fries that they can post on their Facebook page so they can “share” fries with their friends. The idea of sharing is central to the campaign. “When something is really good, you don’t necessarily want to share it so easily,” said the chief executive and CEO of Wendy’s agency of record.

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Full Article:

http://www.nytimes.com/2010/11/22/business/media/22wendys.html?ref=media

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Is that a giant Quiznos toaster floating across the outfield grass?

November 29, 2010

TakeAway: Marketers are always looking for ways to increase consumers’ engagement with their brands.

Augmented reality technology offers a new way to do this.

But as Quiznos has learned, there are still some issues to be worked out.

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Excerpted from Fortune, “Augmented reality lacks bite for marketers,” by Kristina Grifantini, November 12, 2010

While enjoying a game at Yankee Stadium, you take out your smart phone and point its camera at the field. If the resulting image on your screen shows a giant Quiznos toaster floating above the grass, does that make you more inclined to go get a Quiznos sandwich? …

To users, augmented reality (AR) can seem like magic. When they hold up their phones to their surroundings, the program uses the phone’s camera, GPS, compass, and Web connection to superimpose digital images and information on an on-screen view. …

Though this technology has been around for a while, it has largely been confined to computers with webcams, or to special goggles and headsets. But with the exploding popularity of sensor-equipped smart phones, marketers are trying to use it to sell everything from lunch to concert tickets.

For the Denver-based Quiznos, the idea came about when the number of mobile users visiting its website skyrocketed from 20,000 to a million in a year. Tim Kraus, Quiznos’s interactive-marketing manager, wondered how he could turn those visits into additional real-life trips to one of the chain’s 5,000-plus stores. …

But since Quiznos launched the AR campaign in June, fewer than 2,000 people have user the layer, says Kraus, and he is unable to link the campaign to any increase in sales. Undaunted, he calls it an early-stage experiment to discover what works and what doesn’t. Aside from the fun and novelty factor, “there’s actually some utility in there,” he says. “I definitely think it’s a platform that’s going to grow.” …

This fall, Qualcomm released a software development kit that programmers can use to build vision-based AR applications for Android phones; the company expects commercial campaigns based on the technology to kick off next year. …

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Full Article
http://tech.fortune.cnn.com/2010/11/12/augmented-reality-lacks-bite-for-marketers/

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Consumers baffled by zero

November 23, 2010

TakeAway: The human brain has difficulty interpreting the number 0 according to new research.

This difficulty can lead to irrational decisions when it comes to choosing a credit cards with 0% interest rates.

Retailers offering credit cards will be happy to take advantage of this.

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Excerpted from Wall Street Journal, “When 1% is more appealing than 0%,” by Mary Pilon, November 17, 2010

As retailers ramp up their holiday sales pitches, they may be playing off some surprising and counterintuitive ways our brains interpret numbers.

For example: what’s more confusing: A credit card with a 1% interest rate or a card with a 0% interest rate?

Even though 0% is better, we might be lured toward the 1% card … When it comes to advertising “zero,” consumers get baffled. …

… The “principle of diminishing sensitivity” makes the perceived difference between two quantities decrease as both increase by the same amount. He offers up the example that the difference between 10 and 20 is perceived as larger than the difference between 110 and 120, even though in both cases, the numbers are still only 10 apart.

Enter the number zero.

“Zero is a special value that prevents consumers from using relative comparisons when making decisions.” Because zero makes us lose our reference point when we compare it to other values. …

Let’s say you’re offered a credit card with a 25% interest rate. Then, say you’re offered a credit card with a 1% interest rate. You may think, according to the theory, “Wow, that’s 25 times as high of an interest rate!” The gap seems huge.

But then, let’s say you’re offered a credit card with a 25% interest rate and another interest rate of 0%. The zero makes us lose our bearings when it comes to determining the gap between the two, even though we know that the 0% is less than the 1% and even further away from 25%.

According to research cited in the paper, when no reference point was cited, 49% of survey participants chose a card with a 0% interest rate, while 73% chose a card with a 1% interest rate even though that rate is clearly less advantageous in the long run. …

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Full Article
http://blogs.wsj.com/economics/2010/11/17/when-1-is-more-appealing-than-0/

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Children’s Tylenol is back, but will Mom buy?

November 22, 2010

TakeAway:  The first children’s Tylenol products are returning to drugstore shelves after a long safety recall, and maker Johnson & Johnson now faces the tricky task of persuading parents to buy the pain reliever again. 

The company has taken a low-key approach and must walk a messaging tightrope, providing reassurance that it has fixed its problems without calling so much attention to them that safety concerns resurface.

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Excerpted from WSJ, “Tylenol for Kids Returns to Shelves” By Jonathan Rockoff, November 18, 2010

Bottles of the grape-flavored version of children’s Tylenol have begun reappearing in pharmacies across the country half a year after several J&J over-the-counter children’s medicines were pulled because of manufacturing problems.

The recalls have cost the company hundreds of millions of dollars in lost sales and prompted a shake-up of manufacturing and management.  The quality problems included floating metal particles in the medicines and the potential for excessive concentrations of an active ingredient.

To get parents to return to Tylenol, J&J must combat not just the hit to its reputation but also the encroachment of rival brands, which have been taking over shelf space in drugstores. Cheaper private-label brands are also gaining amid the tough economy as sales of branded medicines drop.  Loyalty to Tylenol’s pain pills, a strong indication that customers will buy the product, dropped 7% in the past year, according to an annual survey in August of 35,000 Americans.  Among over-the-counter pain medicines, Tylenol ranked behind rivals Advil, Aleve and Excedrin in terms of customer loyalty after trailing only Advil in 2009.

“You don’t want to always be apologizing, because that cues the wrong response. You want to be cuing the core emotional benefits that Tylenol delivers,” said the chief executive of a company that consulted for J&J.  There are no signs in stores calling attention to the return, and packaging appears similar to the box before the recall.

Tylenol is a signature brand for J&J, which also sells prescription drugs and medical devices. The company’s swift withdrawal of the medicine during a fatal tampering episode in 1982 endeared J&J and Tylenol to generations of consumers.  Some of that goodwill persists, even after the most recent recalls.

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Full Article:

http://online.wsj.com/article/SB10001424052748703688704575620851371476806.html


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Posted in Mktg - Product Recalls, Mktg - Promotion | Leave a Comment »

Manly Men Drink Coke Zero and Pepsi Max

November 18, 2010

TakeAway: Coke and Pepsi’s rivalry is the stuff of legend in the ad business.

Coke Zero and Pepsi Max are chasing a burgeoning market of men who don’t want “diet” soda. 

Coke Zero launched five years ago and commands a healthy lead in sales. Pepsi, however, launched a new positioning over the summer. 

Below is a comparison of how each managed its media programs.

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Excerpted from AdAge, “Coke Zero vs. Pepsi Max: Which Media Plan Had More Fizz?” By Antony Young, November 3, 2010

1.  Creative executions

Coke Zero’s ‘Four S’ Strategy: Coke Zero centered its brand media strategy on four key pillars: sports, social media, schools and Spanish language media. To build brand discussion, Coke Zero also implemented several clever social media and college programs. Lastly, Coke Zero shifted just under a fifth of its budget into Hispanic media in 2010.

Pepsi Max: Zero Calories, Maximum Taste: Pepsi Max went with a more multimedia plan across television, print and online display to launch its new positioning, “Zero Calories, Maximum Taste.” The new creative dropped diet from its messaging and went after Coke Zero with a comparative ad.

2.  Paid media strategy

Coke Zero’s paid media plan this year so far has been essentially 99% broadcast. It also focused almost solely on sports programming.  It also made a very significant shift in targeting among the Hispanic market by placing 18% of its total budget on Univision. Last year it did not buy any Spanish Language television

Pepsi Max employed a broader range of media. It put 72% of its media plan into broadcast television, contrasting Coke Zero’s 51% in broadcast, 28% in cable and 21% in spot. Pepsi Max’s sports buy included auto racing, but its purchase spanned a wider variety of programming to deliver higher reach. Its top two programming genres were reality and comedy.  In print, Pepsi Max ran a series of advertorials in Maxim.

3.  Owned media strategy

Both brands’ owned media strategy smartly leveraged content on Facebook.

4.  Earned media strategy

Coke Zero posted a clever video and developed an excellent college advocate program dubbed Coke Zero Agent. Essentially a recruitment program at major colleges around the country, students pitched to be a Coke Zero Agent, a role that involved promoting the brand in their colleges through marketing and social programs on campus.

The Super Bowl is still some three months away, but Pepsi Max kicked off early buzz for its planned promotion with Doritos. It launched the promotion at an event in Los Angeles with Betty White, the breakout star of the 2010 Super Bowl commercials with her spot for Snickers.

Summary

While Coke Zero had the benefit of a bigger budget, it made clear choices about where it wanted to play in what looked like a more deliberate and distinct strategy. It made a clear decision with its television plan to single-mindedly chase the young male audience through sports programming events. Its substantial investment in Hispanic media gave the brand one edge over Pepsi Max. It also intelligently employed branded content online.

Pepsi Max‘s plan had a more traditional media flavor to it, delivering strong audiences for the advertising and smartly leveraged Doritos’ early buzz for the forthcoming Super Bowl.

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Full Article:
http://adage.com/mediaworks/article?article_id=146884

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What’s in that black bag? Garbage?

November 17, 2010

TakeAway: Hefty wants to cash in on evolving trash-can colors with BlackOut, a new line of black kitchen bags.

Hefty hopes they’ll bring new interest to one of the lowest-involvement categories. 

The target is mainly “kitchen enthusiasts,” the 40% of people who see the kitchen as the heart of their home and enjoy cooking.

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Excerpted from AdAge, “What the Stylish Garbage Can Is Wearing: Hefty in Black” By Jack Neff, November 3, 2010

Hefty discovered that consumers were buying more black and stainless-steel trash cans, which consumers say look better with black garbage bags.  Hefty executives are among the first to admit it’s hard to get people thinking about trash bags. Private-label shares in the category stand among the highest in packaged goods at 39% for the year ended Oct. 3. Overall category sales were down 5% for the year, in part because some consumers turned to using bags from the groceries or other “free” alternatives.

But Hefty research found, given the right reasons, people actually do care about where they stash their trash. Color, surprisingly, is one of them.  Today, most kitchen trash bags are white, stemming from a time when most kitchen appliances were white or shades of beige. That time has passed.

Product development started only eight months ago, when Hefty marketers discovered a seismic shift in trash-can and kitchen appliance colors thanks to its partnership with HMS Manufacturing, which licenses the Hefty name for kitchen trash cans. While nearly two-thirds of new kitchen trash cans are still white or tan, unit sales of black trash cans are up 38% from last year. Sales of stainless-steel cans are up 12%, while sales of the white/beige range are down 8%.  This follows trends in kitchen appliances.  While stainless steel is the bigger trend in appliances, black is a bigger deal in trash cans, primarily because black cans are less expensive than stainless steel or chrome. Consumers also find black bags look better with stainless steel than white ones, she said.

Hefty discovered trash also looks better, or at least less messy, in black bags.  The black bag also appeals to consumers’ desire for privacy.

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Full Article:
http://adage.com/article?article_id=146880

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Under Armour tries to play in Nike’s sandbox

November 16, 2010

TakeAway: Just a small piece of the $2.5 billion U.S. market for basketball sneakers would meaningfully add to Under Armour’s $856 million annual sales.

Never mind that Nike owns 95% of that market and spends $2.4 billion annually on marketing to defend it.  CEO Kevin Plank has set his sights on being the number one basketball shoe manufacturer.

That’s a quite lofty goal for a company that has already failed in other types of athletic shoes.

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Excerpted from Bloomberg Businessweek, “A Half-Court Shot for Under Armour,” by Matt Townsend, October 28, 2010

… Under Armour  launched a basketball shoe line, called Micro G, to take on the longtime ruler of the court, Nike. …

In the $2.5 billion U.S. market for basketball sneakers, Plank confronts more than just Nike’s 95 percent share and the billions it spends on marketing. Sales of basketball shoes in the U.S. have slid for the past three years as fewer people play the sport …. And Under Armour’s earlier disappointments in cross-training and running shoes suggest its hoop dreams may be tough to realize.

If Plank harbors doubts about taking on Nike in its stronghold, he isn’t showing it. “Our goal for getting into basketball is to be No. 1,” he says. …

Despite the trash talk and Baltimore-based Under Armour’s fast growth (sales at its core apparel business have tripled in the past five years), Plank has had difficulty climbing the learning curve in sports footwear. In 2008, Under Armour spent big on a Super Bowl ad for a line of cross-training shoes—months before the shoes actually reached stores. Many shoppers had forgotten the ad by the time of the shoes’ debut. Meanwhile, tepid sales of the line of running shoes it introduced in 2009 have led the company to allow retailers to discount them or simply send them back to clean out inventories. …

As Plank prepared for the Micro G launch, he told employees to start thinking of Under Armour as a footwear brand, not just an apparel maker. “I called our marketing team and said, ‘Go through this building and find anything that says we are only an apparel brand and throw it away,'” Plank says. …

Plank expanded Under Armour by identifying profitable market niches, such as its namesake undergarments that pull moisture away from athletes’ skin …. Getting into basketball shoes, however, is “a whole other level,”…

One reason: Nike spent $2.4 billion on marketing in its last fiscal year, or almost three times Under Armour’s annual sales and 20 times its marketing outlays. Perhaps that’s why the Beaverton (Ore.) sports giant isn’t exactly running scared. “While our main focus is on fulfilling our own potential, which is unlimited, we thrive on competition of any kind,” says Nike spokesman Derek Kent when asked about Under Armour’s foray into basketball. “We expect to further expand our leadership position.”

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Full Article
http://www.businessweek.com/magazine/content/10_45/b4202024138269.htm

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My name is Domino’s, and my pizza was bad. Now it’s better.

November 15, 2010

TakeAway: Domino’s admitted its old pizza was lacking (to put it politely) and introduced a new recipe by revealing it to its staunchest critics.

The company continued the transparency theme by encouraging customers to alert Domino’s when the pizzas they ordered were not up to par.

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Excerpted from AdAge, “Domino’s Talks Radical Authenticity” By Abbey Klaassen, October 28, 2010

It was arguably one of the riskiest marketing campaigns of all time — so how, exactly, did Domino’s get its “Oh Yes We Did” campaign, which touted a revamp of pizza by admitting the previous version was terrible?

“We had to do something” because sales were so bad, said Domino’s CMO. 

“New and improved” campaigns typically feel cliché and disingenuous.  So Domino’s looked at what was going on in the news and culture and launched it under a new guise: radical transparency.

So far, the company has seen only positive results; most recently, its third-quarter same-store sales were up 11.7%.

Additionally, the “Show Us Your Pizza” campaign, in which Domino’s asked customers to take their own photographs of the food to be used in ad campaigns, has resulted in 13,000 submissions. Domino’s also responded in ads to customers whose photos showed a pizza that didn’t arrive photo-ready.

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Full Article:
http://adage.com/ideaconference/article?article_id=146782

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Kraft Wants Philly to Flex from Bagels to…Chicken

November 11, 2010

TakeAway: Kraft Foods is repositioning Philadelphia Cream Cheese as a versatile cooking ingredient, spending big to introduce a new product, Philadelphia Cooking Creme. 

The reduced-fat, creamy and spoonable version of the iconic brand will hit stores early next year and be accompanied by one of the largest ad campaigns in company history.

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Excerpted from AdAge, “Kraft Puts Big Bucks Behind Philadelphia Cooking Creme Launch” By EJ Schultz, October 26, 2010

The ad budget for this will consume half of all spending in the cheese and dairy division, which also includes Velveeta and Kraft Singles. Those two brands alone accounted for more than $38 million in measured media spending in 2009.

The refrigerated creme will come in four flavors: original, Italian herb, savory garlic and Santa Fe. The campaign will promote the product as a sauce for chicken, vegetables or just about anything else you can put in a pan. Commercials will focus on solving the “dinner dilemma.”

Philadelphia brand cream cheese was first distributed in 1880 by a New York businessman and acquired by Kraft in 1928. The brand was marketed as a versatile cheese in the early years, but Kraft began positioning it as more of a bagel spread in the 1980s. Sales later flattened, as consumers began favoring low-carbohydrate diets, such as the Atkins Diet.

The push to return the cheese to its versatile roots gained steam this year with an online campaign called “Real Women of Philadelphia.” Consumers submitted cream cheese recipes and celebrity chef Paula Deen hosted a cook-off. Kraft hopes to build anticipation for the creme by first sending it to 2,000 consumers who sign up on the Real Women website. Users can submit pitches for an online commercial.

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Full Article:
http://adage.com/article?article_id=146710

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Give It to Me Straight…about Toilet Paper

November 10, 2010

TakeAway: Quilted Northern’s self-identification as “bath tissue” demonstrates the toilet paper segment’s fondness for euphemism, but a new campaign for Soft & Strong aims for straight talk.

It’s a change in messaging for a brand that ran ads for most of this past decade showing cartoon “Quilters” talking about its products. 

However, some people still don’t think it’s candid enough.  Exactly how candid do they want to get!?

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Excerpted from Brandweek, “Quilted Northern Ads Try New Approach: Candor” By Elaine Wong, October 3, 2010

Ads for Quilted Northern Soft & Strong show women against a white backdrop speaking their mind. “It’s time to get real about what happens in the bathroom,” says one woman. “Stop all the cutesy stuff,” another adds. A third woman states, “Feeling clean is so important.”

Campaigns for brands in this space often tout that a particular product is “soft” or “strong,” but those happen to be the basic “prices of entry” into the category, said Quilted Northern’s senior marketing director.  He claims that people buy toilet paper to get clean.

In the last year, ads from consumer product companies like Procter & Gamble and Kimberly-Clark have opted for straight talk relating to topics like feminine hygiene and adult incontinence.

Nevertheless, rivals in the category are also moving toward a more frank approach. Ads featuring a family of bears for Charmin show what happens when toilet paper “leaves pieces behind.” Kimberly-Clark is encouraging consumers to spread the word about the “freshness” one can achieve by using its Cottonelle Fresh Flushable Moist Wipes.

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/packaged-goods/e3ifd62d5f2cdeae60e68f7cb7dbafe7bab

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Where, oh where, is My McRib?

November 2, 2010

TakeAway: The McRib – a boneless pork patty molded into the shape of a rib slab and adorned with pickles, onions and barbecue sauce on a bun – is almost never available at all McDonald’s restaurants at the same time.

Instead, the Golden Arches offers them in different cities at different times, rarely for longer than a few weeks.

The elusive nature of McRibs has prompted a “McRib Locator” website and offers cache to a humdrum sandwich.

Sometimes, distribution is slim on purpose.

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Excerpted from the Wall Street Journal, “Bona Fide Fans Chase Rib-Free Rib Sandwich” By Julie Jargon and David Kesmodel, October 11, 2010

The sandwich’s elusiveness has created a fan base of people who go to considerable lengths to munch on a McRib.  On Nov. 2, for the first time in 16 years, McDonald’s will offer the McRib at outlets across the U.S., but even then, only for six weeks or so. “It doesn’t sell well all year long because people get tired of it,” says McDonald’s USA President Jan Fields.

Plenty of companies offer limited-time products to coincide with holidays or promotions. Burger King offered actual ribs for a while this year. Mars sells red and green M&M’s at Christmas.

While the chain says it sold more than 60 million McRib sandwiches in the last three years, it sold 1.5 billion Big Macs in the same period. But every sale counts in a business that demands month after month of strong same-store sales.

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Full Article:
http://online.wsj.com/article/SB10001424052748704696304575538373863627604.html?mod=WSJ_hps_RIGHTTopCarousel_2

 

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Naked Juice makes a splash

October 27, 2010

TakeAway: Sales of super premium juices have held up relatively well in a downturn, despite the products’ high price points.

PepsiCo launched the first national ad campaign for Naked Juice, its premium bottled juice brand.

Acai-based juices are competing on authenticity about their products, while up-and-coming brands deride mass market brands.

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Excerpted from Brandweek, “Naked Juice Ads Tell ‘Naked Truth’” By Elaine Wong,October 1, 2010

The campaign kicked off on digital properties and Naked Juice’s Facebook page. It highlights the brand’s promise—”no added sugar or preservatives”—and invites consumers to submit their own “naked truth.” Digital banner ads show live conversations consumers are having about the brand.

Print ads, which break in magazines such as Fitness and Shape, target consumers ages 25 to 35, who are “health-conscious, active and balanced in their food choices,” said Naked Juice’s marketing director.

Naked Juice was one of two pioneers (its rival is Odwalla) in the super premium juice category. But over time, the category’s original positioning and heritage became diluted, mainly, competitors coming into the marketplace are now introducing products with added sugar and extra water.

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/direct/e3ifd62d5f2cdeae60ecdfda51c1a6f4e83

 

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iPad’s astonishing adoption rate

October 26, 2010

TakeAway: The DVD player used to be the most quickly adopted non-phone electronic product, until the iPad launched.

In less than three months Apple sold 3 million iPads, blowing away the 350,000 DVD players sold in the first year.

As people replace their laptops with iPads, companies like Microsoft could be in trouble.

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Excerpted from CNBC’s Fast Money, “iPad Adoption Rate Fastest Ever, Passing DVD Player,” by John Melloy, October 4, 2010

Apple’s iPad sold three million units in the first 80 days after its April release and its current sales rate is about 4.5 million units per quarter, according to Bernstein Research. This sales rate is blowing past the … the 350,000 units sold in the first year by the DVD player, the most quickly adopted non-phone electronic product. …

At this current rate, the iPad will pass gaming hardware and the cellular phone to become the 4th biggest consumer electronics category with estimated sales of more than $9 billion in the U.S. next year …

… Pete Najarian, co-founder of TradeMonster.com …. “It’s really a total media device and there’s not much a PC can do that you can’t do on an iPad.”

… It took five years for the DVD to reach the unit sales pace that the iPad reached in just its first quarter, according to Bernstein. The iPad had the advantage of being the extension of Apple’s ever-expanding ecosystem of iPhones, iPod touches and Macs that are marked by ease of use and a familiar style.

… not only are the iPads cannibalizing the netbook/notebook category in stores, but could also be hurting sales of TVs and digital cameras. …

Apple has been the rare company that keeps the “first mover” advantage. As tablets from Microsoft and Research-In-Motion soon flood the market, and Apple’s market capitalization approaches Exxon Mobil, the company’s going to need the next big extension of that ecosystem. Apple TV is on sale now.

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Full Article
http://www.cnbc.com/id/39501308

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Ben & Jerry’s isn’t all natural?

October 25, 2010

TakeAway: Ben & Jerry’s has come a long way since it was just two guys making ice cream.

Now owned by Unilever, the brand is trying to remain authentic.

However, it’s “All Natural” ingredients aren’t what everyone considers natural.

Bowing to pressure from an advocacy group, Ben & Jerry’s will remove “All Natural” labeling from 48 products.

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Excerpted from Brandchannel, “Ben & Jerry’s Bows to ‘All Natural’ Pressure,” by Shirley Brady, September 27, 2010

…Ben & Jerry’s is removing the phrase “All Natural” from its packaging as a result of a request from a health advocacy group.

The Washington-based Center for Science in the Public Interest announced that the Vermont-based ice cream-maker, which is owned by Unilever, has agreed to remove the words “All Natural” from all its ice creams and frozen yogurts “that contain alkalized cocoa, corn syrup, partially hydrogenated soybean oil, or other ingredients that aren’t natural.”

The move “amicably” resolves a dispute arising from a letter that the Center for Science in the Public Interest sent last month to Unilever. The letter said that at least 48 Ben & Jerry’s products were “improperly labeled.”

Ben & Jerry’s responded to an inquiry from AP it won’t change any recipes, but will remove the disputed phrase gradually from all packaging.

One major point of contention: the FDA “has no formal definition for ‘natural.'” … “The Food and Drug Administration could do consumers and food manufacturers a great service by actually defining when the word ‘natural’ can and cannot be used to characterize a given ingredient,” CSPI Executive Director Michael F. Jacobson said in a statement. …

 

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http://www.brandchannel.com/home/post/2010/09/27/Ben-Jerrys-All-Natural-Ban.aspx

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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 are women talking about?

October 20, 2010

TakeAway: Women consumers are an formidable force, shaping how billions of marketing dollars are spent annually.

However, getting a deep view of their market influence, especially in a digital and social age, has been hard to come by.  A new monthly brand index aims to change that.

Women drive 85% of all consumer purchases (often by being unofficial brand ambassadors) and talk about brands constantly – about 92 per week.

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Excerpted from Brandweek, “Women’s Top Brands Listed” By Jim Cooper,September 27, 2010

A new monthly brand index that’s designed to be a comprehensive measure of the 25 brands most important to women compiles online search data, social media buzz data and online chatter.

Brands that used new media in their marketing mix were some of the biggest movers on the list. Gap, for example, which moved from No. 44 to No. 17 in August, offered a discount incentive to shoppers that checked in through Foursquare. Pizza Hut also offered a discount via Foursquare in August and saw its rank hit No. 60 from No. 73.

Brands with recently launched social initiatives also had solid gains on the index. Starbucks moved to No. 33 from No. 59 with a boost from buzz about an in-store donation program to help rebuild neighborhoods in New Orleans. And Olive Garden hit No. 92 from No. 145 with the news that it had raised $6 million for the Lymphoma and Leukemia Society through its Pasta for Pennies program.

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/direct/e3i386774579db7c2033a69ab0af09f5664?pn=1

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When it comes to consumer choice … less can be more.

October 19, 2010

TakeAway: Many companies take the approach that giving customers more choices is better.

But, there’s only so much information the human brain can process.

Recent research highlights that giving consumers fewer choices can provide a competitive edge.

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Excerpted from Strategy + Business, “A Better Choosing Experience,” by Sheena Iyengar & Kanika Agrawal, September 27, 2010

When Baskin-Robbins opened in 1953, its line of 31 flavors — one for every day of the month — was a novelty. At the time, such variety was unheard of, and Baskin-Robbins used it to stand out from other chains. …

Today it seems obvious to offer consumers more choice — but the experience is no longer a novelty, or nearly as much fun. …

Consumers have grown accustomed to having a lot of choice, and many people still express a strong desire for having more options. But that doesn’t make it a good idea. There are neurological limits on humans’ ability to process information, and the task of having to choose is often experienced as suffering, not pleasure.

That is why, rather than helping consumers better satisfy their preferences, the explosion of choice has made it more difficult overall for people to identify what they want and how to get it. Thus, if the market for your product is saturated with choice, you can’t gain a competitive edge by dumping more choices into the mix. … You can design a more helpful form of choice.

The goal of a new approach to choice should not be to manipulate consumers into making choices that aren’t right for them, but rather to collaborate in a way that benefits both of you. …To accomplish this, here are four actions you can take:

  1. Cut the number of options.
  2. Create confidence with expert or personalized recommendations.
  3. Categorize your offerings so that consumers better understand their options.
  4. Condition consumers by gradually introducing them to more-complex choices.

Offered together, these actions can distinguish your company. Rather than trapping people in a morass of alternatives, you’ll be one of those rare companies whose offerings rise to the top by raising customer spirits. …

Each of these forms of customer engagement can be technologically enabled, for example, through online networks or social media. But the heart of this method lies in better design of the shopping experience, fueled by better awareness of human capabilities. …

From the outset, your design shows them that you understand how they think and respect their desire for both control and simplicity. The message is clear: In the short run, you are helping them navigate a bewildering and even debilitating world of options. In the long run, you are inviting them to choose you.

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Full Article
http://www.strategy-business.com/article/00046?gko=13ead

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Testing the pricing waters

October 18, 2010

TakeAway: Companies that sell consumer mainstays are rolling out price increases in a collective test of America’s economic strength and in response to higher raw-material costs.

If consumers are willing to pay more, it could indicate the economy is turning a corner, but also serve as a warning that inflation could spiral.

If consumers balk at higher prices, though, it would represent a setback and could pinch corporate profits. Some companies could be forced to backtrack with discounts if sales falter.

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Excerpted from Wall Street Journal, “Gingerly, Retailers Try to Pass Along Higher Costs” By Liam Pleven,October 2, 2010

The ability of companies to sustain such price increases may sway how the Federal Reserve views the health of the economy, and potentially figure in its decision on whether another big round of stimulus is needed. The country’s low rate of inflation was cited by the Fed last month as a main reason the central bank is considering further steps to juice the economy.

Companies say some labor costs are rising, particularly for overseas manufacturing, and point to rising commodities prices. Commodities typically make up less of a company’s costs, but prices have risen sharply, with cotton up 38% this year, coffee up 33% and rubber up 17%.

Some firms successfully increased prices earlier in the year, with little or no discernible impact on inflation. The 6% increase that Goodyear began rolling out for consumer tires follows on another 6% rise in June. The firm cited higher raw-material costs.

But many other firms held off on charging more even though the recession technically ended more than a year ago, because they were concerned about a consumer backlash and losing sales to rivals.

Still, some companies are dipping their toes in the water daintily, targeting specific products.

Starbucks, for instance,  is raising prices on “labor-intensive and larger-sized beverages,” but maintaining or lowering the price of a regular cup of coffee in most markets.

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Full Article:
http://online.wsj.com/article/SB10001424052748704029304575526331692863238.html?mod=WSJ_hpp_sections_business

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Buy me, I’m the underdog …

October 15, 2010

TakeAway: Americans love to root for the underdog.

New research shows that this tendency is applicable to marketing.

In a difficult economic environment, marketers have been leveraging underdog brand perceptions where feasible to gain consumer favorability.

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Excerpted from HBS Working Knowledge, “The Consumer Appeal of Underdog Branding,” by Martha Lagace, September 13, 2010

Picture the Jamaican bobsled team going for the gold at the Winter Olympics.

Or competitors in what seem fundamentally unbalanced battles: the Chicago Cubs versus the New York Yankees, Apple versus Microsoft, and Southwest Airlines versus United.

In the public eye, the weaker party is often more attractive. Why?

The reason might be an increasing willingness on the part of consumers to identify with the underdog. In today’s economically difficult times, it appears, underdog brands are gaining psychological, and real, power in the marketplace. …

“Today, underdog brand biographies are being used by both large and small companies and across categories …. Even large corporations, such as Apple and Google, are careful to retain their underdog roots in their brand biographies.” …

“Through a series of experiments, we show that underdog brand biographies are effective in the marketplace because consumers identify with the disadvantaged position of the underdog and share their passion and determination to succeed when the odds are against them.”

Marketers can use underdog narratives to positively affect consumers’ perceptions of and purchase of brands …

The common themes that link … underdog biographies are

  1. a disadvantaged position in the marketplace versus a “top dog,” a well-endowed competitor with superior resources or market dominance, and
  2. tremendous passion and determination to succeed despite the odds.  

Brand managers need to consider the credibility of the underdog narrative for the firm.

Many brands emphasize their underdog roots, but if they are later acquired by large corporations, it diminishes the credibility of their underdog brand biographies.

Brands such as Ben & Jerry’s and Snapple have been criticized by consumers once they were acquired by large corporations. …

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Full Article
http://hbswk.hbs.edu/item/6351.html

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Harley gets some gray hairs …

October 14, 2010

TakeAway: Times are tough at Harley-Davidson, but not just because of the economy.

The guy who comes to mind when you think of a Harley owner is getting too old to ride.

Even worse, there are not enough younger potential customers who want a Harley because it’s not as exclusive as it used to be.

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Excerpted from Fortune, “Harley-Davidson’s aging biker problem,” by Alex Taylor, September 17, 2010

Harley-Davidson was the feel-good turnaround story of the 1990s and then the poster-boy for brand values in the 2000s. How often did you read that Harley was the only consumer brand whose customers were so loyal they wore the company’s logo tattooed on their chest?

But after expanding exuberantly in the last decade, Harley has fallen on hard times. Now it is struggling against a foe that not even cost-cutting nor brand loyalty can overcome: demographics. Its current owners are getting old, and not enough younger ones are coming up behind them.

Harley’s core customer is a middle-aged white American male, a group that will contract in the coming decade. …

Bumpy roads are nothing new for Harley. … Fighting back at what it perceived as unfair competition [from Japanese manufacturers], the company won an anti-dumping ruling from the International Trade Commission in 1982, and President Reagan imposed a 45% additional tariff on super heavyweight Japanese bikes.

Given an opening, Harley used the opportunity provided by the tariffs to regroup. … Harleys became a cult item; Harley dealers packed extra charges onto list prices and compiled waiting lists for prospective customers. By the late 1990s, certain models were back-ordered for two years.

After resisting the temptation to expand, Harley belatedly added production capacity and grandiosely predicted sales would reach 400,000 by 2007. But with ample supply, Harleys began to lose their cachet. Sales peaked in 2006 at 349,000. …

Harley’s famous brand couldn’t buffer it from the downturn once owning a Harley stopped being cool. …

… Harley survived earlier economic downturns when other discretionary consumer durables slumped because Harleys were in short supply. As it built capacity to meet demand, Harley became just another manufacturer, vulnerable to a cyclical economy. In the fourth quarter of 2009, it suffered its first quarterly loss in 16 years.

The days when Harleys were a fashion accessory are likely over. …The challenge for Harley-Davidson in 2010 is to adjust to the new normal.

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http://money.cnn.com/2010/09/17/autos/harley_davidson_fall.fortune/index.htm

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Sierra Mist Goes Au Naturel

October 13, 2010

TakeAway: PepsiCo has renamed and repackaged its lemon-lime soda to Sierra Mist Natural and introduced a new campaign to reflect the beverage’s more natural ingredients.

The new tagline: “The soda nature would drink if nature drank soda.”  Perhaps, a bit of a stretch …

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Excerpted from Brandweek, “PepsiCo Pitches Sierra Mist Natural” By Elaine Wong,September 21, 2010

According to PepsiCo, the reformulated soda contains no preservatives or artificial flavors and is now made with real sugar instead of high fructose corn syrup.

 The commercials communicate Sierra Mist Natural’s new positioning by showing a variety of “nature experts” – rocks, trees and a rainbow – craving for the product.

 Major beverage companies such as PepsiCo and Coca-Cola have traditionally spent more marketing their cola brands, but now they’re turning their attention to growing consumer demand for natural products.

In fact, “natural” is a top priority when it comes to carbonated soft drinks.

The campaign aims to get the message across by positioning Sierra Mist Natural as the “hero” in each of the scenarios and using humor.

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/direct/e3i430e0ec60c443f0944fff88b91feabeb

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Gillette offers a new – cheap – shave … in India, that is.

October 12, 2010

TakeAway:

Gillette’s newest shaving system has just one blade, a light plastic handle and a sharply lower price.  The Gillette Guard will hit stores – in India – next week and costs 15 rupees, or 34 cents, and uses blades that cost five rupees, or 11 cents.

P&G’s goals are to first bring more consumers into Gillette and then try to lock them in to future purchases. 

To develop the Guard, P&G used target costing– starting with what consumers can afford and then adjust the features and manufacturing processes to meet the target.

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Excerpted from Wall Street Journal, “Gillette’s Latest Innovation in Razors: the 11-Cent Blade” By Ellen Byron,October 1, 2010

The Guard reflects P&G’s aggressive push into emerging markets for new customers and growth. That focus is forcing P&G to be more modest on scale and more flexible on price.

Gillette commands about 70% of the world’s razor and blade sales, but it lags behind rivals in India and other developing markets, mainly because those consumers can’t afford to buy its flagship products.

Gillette Guard is aiming to lure users of double-edge razors, about 400 million men in India, according to P&G estimates. In India, a brand called Super-Max holds the lead in double-edge blades, which cost roughly 1.5 to 2 rupees, which is half of the cost of even Gillette Guard.

The need to grow in emerging markets is pushing P&G to change its product-development strategy. In the past, P&G would sell basically the same premium products in developing countries, where only the wealthiest consumers could afford them. To reach more consumers, P&G changed course by creating pared-down products specifically designed to be less expensive.

P&G has a lot of ground to make up in India, where it estimates just 10% of men who shave use Gillette blades, compared with about 50% world-wide. Its plan is to get men to start using its products and then upgrade them as India’s economy grows.

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Full Article:
http://online.wsj.com/article/SB10001424052748704789404575524273890970954.html?mod=WSJ_hps_LEFTWhatsNews

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Registers Are Ringing … at the Dollar Stores, that is.

October 8, 2010

TakeAway: As people make fewer costly shopping trips to stock their pantries and increasingly can only afford inexpensive items in small quantities, stores are scrambling for the once-ignored low-end customer.

Some customers at Wal-Mart and the major dollar chains have such modest budgets that the retailers report upticks in spending at the beginning of the month, when government benefit checks and many paychecks come through.

Some of the stores have even managed to reach some middle-income shoppers, by increasing products from well-known brands such as Hanes, Quaker Oats and Nabisco. 

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Excerpted from the New York Times, “Stores Scramble to Accommodate Budget Shoppers” By Stephanie Clifford,September 22, 2010

Dollar stores have shown the biggest gain in shopper visits over the last year out of all the retailers that sell basic consumer goods. Manufacturers are racing to package more affordable versions of products common at those stores, and other budget retailers, feeling the loss of customers, are trying to duplicate their success.

 Wal-Mart, the world’s largest retailer, is adding thousands of items to its shelves, including inexpensive ones, and is asking dollar-store suppliers to create small, under-a-dollar packages for its stores, too.

 In areas with high unemployment, Wal-Mart is grouping together its less than $1 items in a clear challenge to the dollar stores. About a quarter of Wal-Mart’s stores are beginning to offer items for under $1, such as a four-pack of toilet paper, boxes containing just a few garbage bags and single rolls of paper towels.

The dollar stores have best been able to capitalize on the downmarket trend because of strategies they embraced during the recession, when the stores kept things cheap and expanded their merchandise.

During the recession, Wal-Mart pulled back on very inexpensive products, suppliers said, to make the stores look less cluttered and to appeal to shoppers who might be testing out that retailer instead of, say, Target. That decision has it now playing catch-up.

The dollar stores have found creative ways to keep their prices low. When commodity costs rose for suppliers, for example, the dollar stores asked them to decrease the number of sandwich bags in a box or pushed them to come up with a cheaper version of the products.

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Full Article:
http://www.nytimes.com/2010/09/22/business/22dollar.html?_r=1&th&emc=th 

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Kodak tries to hang on …

October 7, 2010

TakeAway: For years Kodak’s photo kiosks received little traffic as people decided that they’d rather print at home or keep their photos in digital form.

Now Kodak has caught on that consumers are interesting in specialty printing, such as collages, so the company is updating its kiosks for this functionality.

It’s an insight that the company hopes will change its stodgy brand association into something more cutting edge.  But there’s a catch.  You have to buy a mat or a frame.

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Excerpted from Brandchannel, “Kodak Touts Innovations at Photokina,” by Barry Silverstein, September 21, 2010

Kodak, a brand name that may find it a major challenge to shake its association with conventional photography, is doing everything it can to become a hip, socially aware digital photography provider. …

Kodak’s latest entry into the “cool, hot and worthy” category was unveiled this week … The company’s new retailer photo kiosk “automatically enlarges, shrinks, crops, aligns and arranges as many as 13 images on one print.”

… The new “collage option” software will be introduced in December at some 5,000 CVS stores in the US.

There is one catch … The consumer is required to purchase a mat, or a frame with a mat, along with the collage. …

“Most creative collage systems in the market don’t really take the presentation into account — you create the collage but then you have to mount or frame it. Kodak is taking it all the way to the wall,” …

While traditional photo prints have dropped in popularity because of digital photography, specialty printing is now booming for that very same reason.

Specialty sales of such items as posters, postcards and t-shirts made from digital images have increased from $738 million in 2006 to $1.3 billion last year.

Clearly, Kodak is looking to create its own “Kodak moment” and ride the wave with specialty photography products of its own.

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Full Article
http://www.brandchannel.com/home/post/2010/09/21/Kodak-Photokina-Collage.aspx

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Lululemon’s Ambassadors wear their loyalty on their sleeves … literally !

October 6, 2010

TakeAway: Upstart retailer Lululemon Athletica, a Vancouver-based maker and retailer of athletic wear, enlists fitness instructors as “ambassadors” to distinguish itself from sportswear giants who typically hire high-priced sports celebrities to model their outfits. 

Lululemon spends almost nothing on advertising beyond occasional print ads in yoga and running magazines; instead, ambassadors receive up to $1,000 of free apparel in return for modeling it for their clients. 

Word of mouth is certainly powerful.

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Excerpted from The Wall Street Journal, “Lululemon Grows Fast on a Slim Budget” By Kevin Helliker, September 13, 2010

Lululemon belongs to an emerging class of retailers focused primarily on designing, making and selling athletic wear to women—and grabbing growing shares of the estimated $15 billion market for women’s fitness attire. 

The companies’ believe that traditional sportswear giants have treated female athletes as an afterthought resonates with many women.

Even amid the recession, Lululemon’s high-priced apparel is selling briskly.

The company has expanded its roster of ambassadors to include running, spinning and resistance-training gurus, including some men.

In keeping with the peace-and-love ethos of yoga, Lululemon publicly describes its primary purpose as promoting good health and well-being rather than making profit.

The company says it offers free yoga classes in its stores to introduce people to yoga’s stress-relieving benefits, not to sell clothes.

Similarly, the company says its ambassador program offers vital feedback on new apparel from fitness experts.

 

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Full Article:
http://online.wsj.com/article/SB10001424052748703960004575481890366935552.html#printMode

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Puttin’ on the Ritz

October 5, 2010

TakeAway: Responding to the sharp decline in rates consumers will pay for luxury hotels during economic hard times, Ritz-Carlton will join airlines, credit-card companies, and many other hotel chains in offering a loyalty program to its customers. 

“Ritz-Carlton Rewards” will let guests earn free nights at other hotels.

The high-end chain had long held that its customers weren’t interested in anything as pedestrian as “points,” but the recession has hit luxury hotels even harder than the rest of the industry.

The new points program is one of a number of actions taken at Ritz hotels to try to attract more business and leisure travelers.

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Excerpted from the Wall Street Journal, “Ritz Carlton Bows to Recession, Adds Rewards” By Alexandra Berzon,September 14, 2010

 

“We always said in the early days, we’re not going to give you a toaster, we’re going to give you service,” said Ritz President and Chief Operating Officer Herve Humler. “That was part of the philosophy.”

The occupancy problems for luxury hotels have been compounded by what is known within the hotel industry as the “AIG effect“: Corporations that were the beneficiaries of taxpayer dollars or were laying off workers were criticized by politicians for booking expensive conferences in luxury resorts, and so they started to pull back. Recently, that problem has begun to ease slightly.

Even before the recession, the Ritz found it necessary to make changes in its high-class veneer, becoming more relevant for younger generations that were put off by the traditionally stiff service at many of its hotels.

That led to such changes as making the greetings from staff members less scripted, adding more technology to the rooms and removing the traditional piano and harp players from the lobbies in favor of, in some cases, pop music.

After spending years studying whether to include Ritz in its loyalty program, Marriott executives said that focus groups in the last year and a half began to show that customers were demanding enticements, particularly in Asia where Ritz is expanding. 

The company designed the new loyalty program to keep it separately branded from the general Marriott points program, Marriott Rewards, which has more than 30 million members who can earn points, which can be redeemed at any Marriott hotel as well as several airline partners.

 

Ritz’s top competitor, Four Seasons, has no plans to implement a loyalty program.

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Full Article:
http://online.wsj.com/article/SB10001424052748704190704575490113861298350.html

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Spend Real Money on…Fake Money?

October 4, 2010

TakeAway: Starting September 5, Target will offer Facebook Credits gift cards. 

With 500 million members, Facebook expects many to purchase the cards and use them on their favorite social games, applications and virtual goods. 

Target jumped on board, expecting the markets for online gaming and digital music to continue to grow.  For some potential cross-promotion, Target also has more than 1.5 million fans on its Facebook page.

What ever happened to good old conversation or handwritten letters, anyway?

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Excerpted from USA Today, “Target to sell Facebook Credits gift cards” By Jon Swartz, September 2, 2010

The new Facebook gift cards will be available in values of $15, $25 and $50 at all of Target’s 1,750 retail stores and at Target.com. Two or three more national retailers will start selling the cards in coming months.

This will be the first time Facebook has had any presence in a retail store. Facebook already has an arrangement with online-payment services PayPal and MOL to purchase Facebook Credits.

More than 200 million people play free social games on Facebook each month, according to Facebook. And many of them are beginning to spend money on premium goods and services associated with those games.  By year’s end, Facebook expects to have gift card credits available for its thousands of games. At least 19 games on Facebook have more than 10 million active users a month.

 Facebook’s entry into the growing prepaid gift card market could prove lucrative. The domestic prepaid gift card market is expected to reach $86.2billion this year, compared with $80.6billion in 2009, according to Mercator Advisory Group.

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Full Article:
http://www.usatoday.com/tech/news/2010-09-01-target01_ST_N.htm

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Leveraging a "P": Wal-Mart Expands Its Reach via FedEx

October 1, 2010

TakeAway: Wal-Mart is experimenting with allowing customers to buy merchandise online and have it delivered for free to urban FedEx locations in a bid to boost sales in big cities where the retailer has little to no store presence.

A perfect example of one of the 6Ps – placement!

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Excerpted from the Wall Street Journal, “Wal-Mart Uses FedEx to Expand Urban Push” By Miguel Bustillo,September 20, 2010

This summer, Wal-Mart started tests in Los Angeles and Boston to allow customers to direct purchases made on Walmart.com to FedEx Office outlets at no cost, mimicking a Wal-Mart offering called Site to Store that lets online buyers send items to the retailer’s stores for free.

Wal-Mart has no stores in Boston and two in Los Angeles, but FedEx has many locations in both. Wal-Mart is still collecting feedback from the tests.

Some retail experts said it seemed like an inevitable next step for the retailer, which has struggled to expand into America’s largest cities amid political opposition from labor unions. Wal-Mart is searching for new ways to spark domestic growth without needing to invest in real estate.

Wal-Mart also is pursuing younger urban shoppers, who don’t think twice about making big purchases online.

The partnership could allow FedEx to capitalize on its locations near college campuses it inherited when it acquired Kinkos in 2004.

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http://online.wsj.com/article/SB10001424052748704416904575501790739176042.html

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Pizza Hut searches for (internal) stars …

September 30, 2010

TakeAway: Pizza Hut has created a new ad campaign that moves from a pricing war with rivals Domino’s and Papa John’s to differentiation purely based on branding through employee spokespeople. 

There is no mention of deals or new-product offerings, and the ads seem to be working.

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Excerpted from AdAge, “Pizza Hut Makes Its Staff the Stars in Brand-Focused Campaign” By Rupal Parekh,September 20, 2010

There are signs that Pizza Hut is beginning to gain some ground on category leader Domino’s, which has 18.4% of the market compared to Pizza Hut’s 15%. Domino’s marketing strategy – something akin to “our pizza was gross, but we fixed the recipe” – was working to some degree. Domino’s posted historic same-store sales increases earlier this year of 14.4% vs. Pizza Hut’s 6%, but in the second quarter, Pizza Hut led same-store sales with an 8% lift.

Pizza Hut’s CMO said: “We just need to incite the consumer to pull up the emotional side of the brand and the high-quality products we provide…Our brand stands for quality already…we have no need to denigrate the brand in order to get people to engage with it.”

That Pizza Hut is turning employees into spokespeople makes it one of several brands (including Nationwide Insurance, Best Buy and BP)

in the past year that have tried to personalize their companies by using homegrown marketing talent, perhaps not coincidentally, while struggling with the recession.

While it’s not a goal of the campaign, the youthful skew could help connect with what Kurt Kane, VP-brand advertising at Pizza Hut, earlier this year told Ad Age is one of two of Pizza Hut’s core consumer groups, families and young adults.

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Full Article:

http://adage.com/article?article_id=145981

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Kenmore – Sear’s jewel – gets modern.

September 29, 2010

TakeAway: By any measure Kenmore has been successful over a long period of time. 

Even in today’s intensely competitive home appliance market, it has managed to stay on top across all major appliance categories. 

Now, the brand is being  overhauled in an effort to modernize.

With customer-focused innovations geared toward a new generation, including appliances that transmit data over a phone line in order to troubleshoot, the brand seems likely to stay on top for the foreseeable future.

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Excerpted from Brandchannel, “Kenmore – A classic appliance brand gets a makeover,” by Barry Silverstein, August 17, 2010

There was a time in the annals of American retailing when Sears ruled the universe in both mail order and store sales. While that era is long gone, the venerable Kenmore brand, originally associated with Sears, has maintained its independent leadership position in household appliances.

First introduced on a laundry appliance in 1927 … The brand’s awareness factor is legendary. Today, more people in the United States buy Kenmore than any other appliance brand, one in every three American homes contains a Kenmore appliance, and Kenmore ranks number one or number two in every major appliance category.

… Even its rivals know the unshakeable power of the brand — Frigidaire, LG and Whirlpool all manufacture products that are sold under the Kenmore name.

But Kenmore has not rested on its laurels …

The trick, of course, is to modernize the brand while retaining and enhancing its long-standing reputation. … that involves four primary areas:

1. “Premium customer touch points,” such as higher quality handles and knobs that are both elegant and ergonomic.
2. “Premium technology,” including user-friendly interfaces such as color-touch LCD displays that are advanced but intuitive and easy to use.
3. Streamlined modern design.
4. New logo and custom font, as well as a new sound palette on select products.

… Kenmore announced an additional innovation called Kenmore Connect, a technology designed to speed up appliance repairs. Kenmore machines with problems have the ability to transmit data over a toll-free phone line for review by company representatives. …

Product design isn’t the only area getting a … makeover. … Kenmore launched an interactive “Kenmore Live Studio” in Chicago. The studio is equipped with cameras that broadcast video via the Internet and includes demonstrations by chefs, presentations, and unveilings of new products that can be shared in real time on the brand’s Facebook page. …

Obviously, Kenmore is making a concerted effort to gain relevancy with a whole new generation of consumers.
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Full Article
http://www.brandchannel.com/features_profile.asp

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Posted in Mktg - Brands, Mktg - Brands - Private Label, Mktg - Product & Innovation, Mktg - Product Line Mgnt | Leave a Comment »

Kenmore – Sear's jewel – gets modern.

September 29, 2010

TakeAway: By any measure Kenmore has been successful over a long period of time. 

Even in today’s intensely competitive home appliance market, it has managed to stay on top across all major appliance categories. 

Now, the brand is being  overhauled in an effort to modernize.

With customer-focused innovations geared toward a new generation, including appliances that transmit data over a phone line in order to troubleshoot, the brand seems likely to stay on top for the foreseeable future.

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Excerpted from Brandchannel, “Kenmore – A classic appliance brand gets a makeover,” by Barry Silverstein, August 17, 2010

There was a time in the annals of American retailing when Sears ruled the universe in both mail order and store sales. While that era is long gone, the venerable Kenmore brand, originally associated with Sears, has maintained its independent leadership position in household appliances.

First introduced on a laundry appliance in 1927 … The brand’s awareness factor is legendary. Today, more people in the United States buy Kenmore than any other appliance brand, one in every three American homes contains a Kenmore appliance, and Kenmore ranks number one or number two in every major appliance category.

… Even its rivals know the unshakeable power of the brand — Frigidaire, LG and Whirlpool all manufacture products that are sold under the Kenmore name.

But Kenmore has not rested on its laurels …

The trick, of course, is to modernize the brand while retaining and enhancing its long-standing reputation. … that involves four primary areas:

1. “Premium customer touch points,” such as higher quality handles and knobs that are both elegant and ergonomic.
2. “Premium technology,” including user-friendly interfaces such as color-touch LCD displays that are advanced but intuitive and easy to use.
3. Streamlined modern design.
4. New logo and custom font, as well as a new sound palette on select products.

… Kenmore announced an additional innovation called Kenmore Connect, a technology designed to speed up appliance repairs. Kenmore machines with problems have the ability to transmit data over a toll-free phone line for review by company representatives. …

Product design isn’t the only area getting a … makeover. … Kenmore launched an interactive “Kenmore Live Studio” in Chicago. The studio is equipped with cameras that broadcast video via the Internet and includes demonstrations by chefs, presentations, and unveilings of new products that can be shared in real time on the brand’s Facebook page. …

Obviously, Kenmore is making a concerted effort to gain relevancy with a whole new generation of consumers.
Edit by DMG

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Full Article
http://www.brandchannel.com/features_profile.asp

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SABMiller refocuses on “organic” … organic growth, not ingredients.

September 28, 2010

TakeAway: Beer giant SABMiller, revamping its business model in an effort to stimulate growth, is asking the top managers in its 75 countries to focus on “organic growth” and far less on acquisitions operations restructuring..

Former “MarkStratians,” rejoice!  Indeed, marketing matters.in driving organic growth.

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Excerpted from the Wall Street Journal, “SABMiller Refocuses On Sales, Marketing” By David Kesmodel,September 17, 2010 

SABMiller announced the shift away from a decentralized structure this week to managers at the brewer’s global leadership conference. The change is aimed at boosting sales and profits from existing operations, after many years in which SABMiller generated much of its growth from acquisitions. SABMiller executives – who essentially have acted as local CEOs – now will concentrate on building brands and gaining shelf space at bars and stores.

SABMiller, the second-largest brewer by sales after Anheuser, is streamlining its business by centralizing back-office finance, human resources and manufacturing systems and parts of its supply chain.

SABMiller and other beer giants are trying to build on the strong sales-volume growth they’re seeing in emerging economies such as China, while adjusting prices and trimming costs to offset slower growth or declines in markets such as the U.S. and much of Europe.

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Full Article:
http://online.wsj.com/article/SB10001424052748703440604575496284288649798.html

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Remember when Nokia was the dominant mobile phone manufacturer ?

September 27, 2010

TakeAway: Once upon a time Nokia was the dominant mobile phone manufacturer.  However, it lost sight of one of the critical components of a successful marketing strategy: people.

Rather than objectively applying an understanding of customer needs into its products and marketing programs, Nokia was content to assume that what customers wanted in the past would remain the same.

So while others like Apple and RIMM developed smart phones with innovations that excited customers, Nokia did nothing and has paid dearly for it. 

It’s trying to get back on track, but it might be too late.

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Excerpted from Bloomberg Businessweek, “How Nokia Fell From Grace,” by Matthew Linn, August 15, 2010

What was the most successful European company of the 1990s? Easy: Nokia. The Finnish mobile-phone manufacturer captured the emerging market for mobile phones and built the industry’s most powerful brand. Its handsets virtually defined the industry from the time it launched its first GSM phone … in 1992. From 1996 to 2001 its revenues increased almost fivefold, and by 1998 it was the world’s biggest mobile manufacturer. In 2005 it sold its billionth handset …

Now, what’s the most disappointing company of the 2000s? Easy again: Nokia. The company has been in steep decline—a point underscored by its Sept. 10 announcement that it was hiring its first non-Finn as chief executive officer. …

Since Apple introduced its iPhone in January 2007, Nokia shares have fallen 49 percent. In a ranking of global brands by Millward Brown Optimor this year, Nokia was No. 43, having dropped 30 places in 12 months. …

Recognizing the scale of its challenges, Nokia hired Stephen Elop, the Canadian head of Microsoft’s business unit, to turn the company around. Everyone will wish him well. … if the guy knows so much about phones, he’s kept it a secret. Microsoft has never made any progress in that industry.

The cruel truth is that for all its residual market share, Nokia looks like a has-been. The company misread the way the mobile-phone industry was merging with computing and social networking. And it’s probably too late to turn that around.

There are uncomfortable lessons here. First, success is not a sinecure. Nokia got to the top of its industry quickly. Once there, it became complacent. … Nokia worried about hanging onto market share rather than creating innovative products that excite customers. Second, Nokia was unwilling to challenge itself. The company clung to the idea that handsets were mainly about calling people. It failed to notice that they were just as much about checking your e-mail, finding a good restaurant, and updating your Twitter page. …

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http://www.businessweek.com/magazine/content/10_39/b4196007421255.htm

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McDonald’s: Getting minorities to "love it"

September 24, 2010

TakeAway: Years ago when McDonald’s niche offerings to Hispanics on the west coast overperformed with the general market, the company realized it was on to something. 

Now, rather than develop ads and menu choices geared towards the broad, general market, McDonald’s has developed a strategy of appealing to minorities and hoping the message will catch on with a broader demographic. 

While this is a very different approach than most companies take, as the demographics of the U.S. continue to change, this strategy is sure to be copied. 

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Excerpted from Bloomberg Businessweek, “Ethnic Marketing: McDonald’s Is Loving It,” by Burt Helm, July 8, 2010

The music industry has long sold black culture to white Americans. Now McDonald’s is doing much the same. It’s taking cues from African Americans, Hispanics, and Asians to develop menus and advertising in the hopes of encouraging middle-class Caucasians to buy smoothies and snack wraps as avidly as they consume hip-hop and rock ‘n’ roll.

“The ethnic consumer tends to set trends,” says Neil Golden, McDonald’s U.S. chief marketing officer. “So they help set the tone for how we enter the marketplace.” Golden says preferences gleaned from minority consumers shape McDonald’s menu and ad choices, which are then marketed to all customers.

The fast-food giant’s strategy is a departure from the way companies typically market to American households. Usually, a company works with an agency to develop advertising aimed at the general market, then turns to boutique multicultural agencies to create versions tailored to blacks, Hispanics, or Asians. McDonald’s still creates ads specially tailored to minority groups, as it has for over 30 years, but minorities exert an increasingly influential role in its mainstream advertising as well. The company thinks they provide early exposure to new trends. …

Its low prices have helped fuel McDonald’s recent strong performance, even as the rest of the restaurant industry struggles to recover from the recession. But Golden says his minority-shapes-majority marketing strategy is paying off, too. U.S. sales rose 1.5 percent in the first three months of the year …

Golden says he first discovered how dramatically minority tastes can influence mainstream preferences when he oversaw McDonald’s marketing in the U.S. West in the 1990s. His team had developed products aimed at Hispanics called the “Fiesta Menu,” … “But [the Fiesta menu] overperformed in the general market.”

Golden went on to create a strategy for the U.S. business that he calls “Leading with Ethnic Insights.” … marketers are asked to imagine how they would sell a product if the U.S. population were only African American, Hispanic, or Asian. They look for differences to McDonald’s general market plan.

That sensitivity has already influenced new products. The fruit combinations in McDonald’s latest smoothies, for instance, reflect taste preferences in minority communities. And when the company started heavily advertising coffee drinks last year, the ads emphasized the indulgent aspects of sweeter drinks like mochas, a message that resonated with blacks, says Golden. …

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Full Article
http://www.businessweek.com/magazine/content/10_29/b4187022876832.htm

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Coca-Cola: You’re Still the One

September 22, 2010

TakeAway:  Coca-Cola, IBM and Microsoft again scored highly in this year’s Interbrand ranking of the 100 Best Global Brands.

Among other highlights, BP fell off the list (not a surprise, given the oil spill) and Hewlett-Packard jumped into the top 10 for the first time.

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Excerpted from the AdWeek, “Coke Tops List of Global Brands” By Todd Wasserman,September 16, 2010 

The list, based on “a unique methodology analyzing the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectation,” according to Interbrand, showed some big movers over the course of 2009-2010.

But in some cases, brands seemed to weather crises well. Toyota, No. 11 on the list, lost 16 percent of its value after its recall PR disaster earlier this year. However, it only fell three places. Goldman Sachs, despite its well-publicized troubles, actually rose from No. 38 to No. 37.

The biggest winners were tech brands, which seemed to withstand the economic times particularly well.

For example, Google’s brand value jumped 36 percent, making it a solid No. 4, while Intel (7) and HP (10) had a strong showing, as did Apple (17).

For the full ranking and explanation, go to http://www.interbrand.com/en/best-global-brands/best-global-brands-2008/best-global-brands-2010.aspx.

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Full Article:
http://www.adweek.com/aw/content_display/news/client/e3ic5827d475c9bb4365c4421ee4830c228

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Coca-Cola: You’re Still the One

September 22, 2010

TakeAway:  Coca-Cola, IBM and Microsoft again scored highly in this year’s Interbrand ranking of the 100 Best Global Brands.

Among other highlights, BP fell off the list (not a surprise, given the oil spill) and Hewlett-Packard jumped into the top 10 for the first time.

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Excerpted from the AdWeek, “Coke Tops List of Global Brands” By Todd Wasserman,September 16, 2010 

The list, based on “a unique methodology analyzing the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectation,” according to Interbrand, showed some big movers over the course of 2009-2010.

But in some cases, brands seemed to weather crises well. Toyota, No. 11 on the list, lost 16 percent of its value after its recall PR disaster earlier this year. However, it only fell three places. Goldman Sachs, despite its well-publicized troubles, actually rose from No. 38 to No. 37.

The biggest winners were tech brands, which seemed to withstand the economic times particularly well.

For example, Google’s brand value jumped 36 percent, making it a solid No. 4, while Intel (7) and HP (10) had a strong showing, as did Apple (17).

For the full ranking and explanation, go to http://www.interbrand.com/en/best-global-brands/best-global-brands-2008/best-global-brands-2010.aspx.

Edit by AMW

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Full Article:
http://www.adweek.com/aw/content_display/news/client/e3ic5827d475c9bb4365c4421ee4830c228

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“Cash for clunkers” … CLUNK !

September 21, 2010

From the WSJ …

Earlier this year, Christina Romer, the former chairman of the Council of Economic Advisers, wrote that cash for clunkers was an example of “very nearly the best possible countercylical fiscal policy in an economy suffering from temporarily low aggregate demand.”

Economists Atif Mian of the University of California Berkeley and Amir Sufi of the University of Chicago have examined “cash for clunkers,” the $2.85 billion program that subsidized consumers to buy new cars and destroy older ones.

Their conclusion: The program “had no long run effect on auto purchases.”

It did juice sales during its two-month run last summer, by about 360,000 cars, but then it quickly hurt sales by about the same amount, in effect stealing purchases from the future.

The program was a wash in a mere seven months.

Messrs. Mian and Sufi caution that …  if this is the result from the “best possible” stimulus program — per Ms. Romer — the impact of the others must have been awful.

Excerpted from WSJ: Stimulus for Clunkers, Sept. 20, 2010
http://online.wsj.com/article/SB10001424052748703904304575497903033602826.html?mod=WSJ_Opinion_AboveLEFTTop

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It’s time to upgrade your Gatorade

September 21, 2010

TakeAway: Since its inception, Gatorade sales have increased every year.  However, with a tough economy and intense competition, sales have decreased for the first time in Gatorade’s history.

To right the ship, Gatorade is introducing a revamped product line closely aligned with a versioning strategy. 

Not only will there be three different types of Gatorade for the main product line, but there will be a similar “pro” series for serious athletes. 

It’s been a winning strategy for software, but will it work for sports drinks?

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Excerpted from Brandchannel, “Gatorade Focuses Brand on Athletes with G-Series Pro,” by Dale Buss, August 14, 2010

Gatorade took a huge step in the revitalization of its brand today by revealing a new structure for its mainstream product line, the G Series … and … “G-Series Pro” products … for serious athletes.

Gatorade’s chief marketing officer, Sarah Robb O’Hagan, shared the rationale behind the new brand architecture …

Gatorade “is a formidable franchise,” … “But we haven’t had the right performance the last few years.” …

Despite being one of PepsiCo’s most profitable brands, Gatorade lost significant sales volume last year for the first time ever because of financial pressures on consumers — most of that loss … going to lower-priced carbonated soft drinks and even to tap water. Gatorade also had lost market share over the years to a proliferation of other better-for-you beverage types and products, and to its own shift in emphasis to “lifestyle” rather than hard-core athletic consumers. …

 

Gatorade’s new product-line structure carries the “G” branding in the next logical step with the G Series. G Series 01 Prime is positioned as “pre-game fuel” and an “energy to start” beverage for consumption before athletic activity; 02 Perform drinks include the brand’s pre-existing Gatorade Thirst Quencher line and G2, a low-cal Gatorade for hydration during activities; and 03 Recover drinks include 10 to 20 grams of protein per serving to help body recovery from exertion.

The G-Series Pro line, which is to be carried exclusively in the U.S. in GNC’s 5,500 stores, uses the same functional logic. “But this is a line that has only been available to elite athletes in pro locker rooms for the last 15 years,” O’Hagan explained to analysts. “For the first time we’re choosing to commercialize them and take them to the consumer.” …

 

The brand’s presentation today to analysts went a long way toward answering questions about Gatorade’s future. The crucial next step: executing the new rationale so that consumers develop a thirst for Gatorade — and keep coming back.

 

 

 

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Full Article
http://www.brandchannel.com/home/post/2010/09/14/Gatorade-Overhauls-Brand-Architecture.aspx

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Xerox to Its Clients: “Lend Me Your Icons”

September 20, 2010

TakeAway: Xerox takes a risk with borrowed-interest advertising. 

What if people who see their new ads featuring some of their clients remember Marriott’s customer service pitch rather than Xerox? 

Xerox says, “We think because these clients are being seen in an unusual space that it will make people look twice. We think the risk is offset by the power of the creative and the relevance of the message in the marketplace.” 

Time will tell…

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Excerpted from blogs.forbes.com, “Xerox Hopes Other Brands Help New Ads Shine” By Melanie Wells,September 1, 2010

It can be difficult for B-to-B companies to create lapel-grabbing advertising. Xerox hopes to get around that in its biggest ad effort in decades by featuring clients, such as P&G and Target. Some ads feature their well-recognized brand icons shown doing Xerox-related work, such as invoicing or digitizing documents. The campaign tagline: “Ready for Real Business.” The campaign will feature 20 companies that use Xerox products or services by the end of 2011. Companies featured in the initial TV and print ads include Marriott Hotels & Resorts; Ducati, the motorcycle maker; and the University of Notre Dame. Xerox admits some companies it approached weren’t comfortable lending their brands to this campaign, other executives liked the idea of having their icons appear in media where Xerox advertises but consumer-focused companies do not. CEO Ursula Burns “picked up the phone [to fellow CEOs], saying ‘Would you be interested in being in this campaign?’” Edit by AMW* * * * *

Full Article:
http://blogs.forbes.com/melaniewells/2010/09/01/xerox-brands-ad-campaign/

 

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Repositioning: Making the Old New Again at Ethan Allen

September 17, 2010

TakeAway: Ethan Allen has launched a new ad campaign, which aims to convince consumers that they don’t have to splurge on lots of furniture to create a stylish home. 

The home furnishings retailer is introducing a series of TV, print, online and direct mail ads with a recessionary pitch. 

Ads position Ethan Allen as an “aspirational” and “attainable” brand through slogans like:

“A great room starts with a great piece.” And: “Relax. You don’t have to do it all at once.”

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KEH Note: Is it just me or are those slogans a bit ‘odd’? 

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Excerpted from Brandweek, “Ethan Allen Pitches ‘Attainable’ Furniture” By Elaine Wong,September 9, 2010

The new campaign is part of the company’s strategy to reposition itself with younger consumers.

Americans in their 40s, 50s and 60s currently make up the brand’s core demographic.

But Ethan Allen is looking to connect with consumers in their 30s and 40s, who also have some discretionary income to spend.  Market research revealed that many consumers previously thought of the brand as unaffordable.

A 30-second spot, titled “Falling,” shows a woman falling slowly backwards in a bare room. As she leans back—as if to sit—a comfortable cushioned chair appears and she takes in the moment. A voiceover coaxes, “Get that one piece right, and the rest of the room will just fall into place,” as other furniture appears in the room.

The ads give Ethan Allen a contemporary twist. “Like a lot of classic American brands, [Ethan Allen has] become so well known that people’s perceptions of them become somewhat out of date,”

The campaign positions the brand as “elegant, yet approachable . . . and a little more modern than you might have thought.”

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/retail-restaurants/e3iff28983151fb56b19121e78b5ff9467c

 

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Netflix’s steady stream of product offerings

September 16, 2010

TakeAway: One of the keys to a company’s long-term success is developing new products or services that create value for high potential markets

Rather than remain content with its status as the leader in DVD rentals, a strategy that did not work well for Blockbuster, Netflix is constantly developing new ways to deliver its services and expand its offerings. 

As technology improves and consumer preference shifts toward online streaming, Netflix has been able to thrive and add new subscribers by forging relationships with companies like Apple and Epix that respectively provide hardware to deliver Netflix’s content and license content to Netflix.

This latest deal with Apple will help ensure that Netflix continues to deliver increased value to its customers even as the DVD rental market continues to decline.

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Excerpted from WSJ, “Netflix Adds Polish With Apple,” by Nick Wingfield, September 2, 2010

Apple Inc.’s decision to include a streaming video service from Netflix Inc. is another sign the DVD rental company may be able to weather a shift to Internet video that is challenging other companies across the entertainment landscape.

Apple … said a new, cheaper version of its Apple TV set-top box … will feature the streaming Netflix service … [T]he relationship could further establish Netflix as a mainstay in electronics devices that deliver Web content to the living room.

Netflix … for several years has been cutting deals with game console makers, television manufacturers and Blu-ray disc makers to include software in their products that provide access to the Netflix streaming service. It has similar apps that run on iPhones and iPads. In total … more than 100 different electronics devices can now access the Netflix streaming service. …

The company says the convenience of its Internet service has helped Netflix expand overall subscriptions. They jumped 42% to 15 million members in the second quarter from 10.6 million a year ago. The company says 61% of Netflix members watched at least 15 minutes of its streaming video during that period, up from 37% the prior year. …

Netflix has defied predictions of its demise again and again over its 13-year history. It has weathered challenges in its DVD rental business from much bigger companies including Wal-Mart Stores Inc., Amazon.com Inc. and Blockbuster Inc. Both Wal-Mart and Amazon ended up getting out of the DVD rental-by-mail business. Blockbuster, meanwhile, has struggled to transform itself, warning investors that it could file for Chapter 11 bankruptcy protection. …

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Full Article
http://online.wsj.com/article/SB10001424052748704791004575466051763313276.html

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Less isn’t always more … just ask Walmart.

September 15, 2010

TakeAway: Walmart’s merchandising strategy called Project Impact knocked thousands of items off the retailer’s shelves and cleared the aisles of promotional merchandise.

And, the retailer has moved to give regional and store managers more power over what their stores carry and how merchandise gets displayed.

Both  programs will have a major impact on a host of marketers over the next year. 

A few brands are immediate winners, though many of the category resets that will add back thousands of items won’t occur until early 2011.

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Excerpted from AdvertisingAge, “Walmart’s Merchandising Shift Has Five Brands Dancing in Aisles” By Jack Neff,September 13, 2010 

The program to reinvigorate growth at Walmart always focused on 10 words.

Seven remain operative, including “Save Money.  Live Better”, the slogan adopted in 2007, and “Fast, Friendly, Clean,” which refers to efforts to improve the store environment and shopping experience. 

Three — referring to the “Win, Play, Show” merchandising and assortment strategy — have been tossed out of the lexicon, according to several people familiar with the matter.   “Win, Play, Show,” reduced assortments widely and often let price leadership over competitors narrow or disappear entirely in the “Play” and “Show” categories.

Reversal of that, along with return of merchandise to aisles, or so-called “Action Alley,” is having the biggest impact on brands.

Among the beneficiaries so far, according to people familiar with the matter:

HEFTY ONEZIP: Along with Glad, it got eradicated from the food-bag aisle after a Walmart category review last year. Starting in April, it got a small amount of space back, and more recently it has fully regained its shelf space.  

PAMPERS: Since Pampers isn’t distributed at Costco or big dollar chains Dollar General and Family Dollar, Walmart takes on added importance for the brand. It’s one reason P&G is widely believed to “over-index” at Walmart, and why it should broadly benefit from increased display space at the giant retailer. 

WISK: This detergent brand had been booted from retailers in the recent years and hanging on to distribution in only around 10% of Walmart stores. Timing proved fortuitous, as Wisk was planning a formula upgrade and major marketing push for August just as Walmart was relaxing its assortment stance. The result is full national distribution for Wisk.  

ELMER’S GLUE: Timing is everything, and the decision to open up “Action Alleys” again in many stores just in time for back-to-school season put this staple of the season in high-traffic areas. 

CHEX MIX: A reset of the snack section recently has brought the item-count for this General Mills brand from three up to eight. 

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Full Article:
http://adage.com/article?article_id=145845

 

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