Wednesday, May 27, 2009

Advertise or Die

According to a new Ad-ology Research study, "Advertising's Impact in a Soft Economy," more than 48% of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business must be struggling. Conversly, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business.

C. Lee Smith, president and CEO of Ad-ology Research, says "It is critical to advertise in the current economic climate, to maintain long-term positive consumer perception of your brand... advertising... assures consumers of a business' reliability... "

Thursday, May 21, 2009

Reaching Moms Through Schools

With more and more scrutiny being focused on advertising that is specifically directed to kids, many marketers are hesitant to even consider a through-school marketing program. What they might not realize, however, is that a through-school marketing program directed to moms (versus kids) is one of the most effective ways to build brand awareness and purchase intent for their products.

Annual spending on consumer goods (food, clothes etc.) for families with school-age kids is expected to reach $143 billion by 2010, according to Packaged Facts. Since moms make most of the purchase decisions for their families, consumer brand marketers must continue to look for new and more meaningful ways to engage the mom audience and make their brand message heard in this overcrowded, noisy marketing environment.

A through-school marketing program cuts through the clutter in the competitive marketing-to-moms space by putting a brand's message directly in front of a key demographic -- moms with school-age kids -- at a time and place when they are especially tuned in to messages and products that speak to their families' unique needs.

Why Through-School Marketing Gets Results

* Precision targeted with no missed hits - While traditional media and marketing options that reach the mom market cast a wide net hitting all segments of moms, through-school marketing directly connects consumer brands to an extremely targeted, captive audience of interested moms with kids ages 5-14.

*Relevant and receptive environment - Moms at school, or engaged in school-related activities, are in "full mommy mode" - specifically focused on their children's well being - making them particularly receptive to brand messages that speak to their challenges as a busy mom and offer solutions that will help them make their families more successful.

* Implied school endorsement and halo effect - When brands sponsor a family-focused school program, moms recognize and appreciate the brand's support of education and their school-family communities - and respond and follow through by patronizing the brands that support their schools.

* Grassroots brand advocacy - Moms attending a school-family event are in an ideal social environment to discuss and promote new products or services with other moms allowing mom-to-mom buzz and word of mouth endorsement to take place naturally.

Tips for Executing a Successful Through-School Marketing Program

Plan Ahead - It's important to know what a typical school's event planning cycle is for the year. Schools make planning decisions months in advance so be sure you allow enough lead time to build momentum and anticipation for your program before it is actually executed. For example, we sign schools up for our Back2School program in the spring before school ends and summer begins. It's critical to get schools signed up to participate in the program in spring so they are ready to execute it come August.

Make it relevant to moms - Make sure your program is relevant to moms in the context of the school environment otherwise you might lose the brand goodwill that you hoped to garner by sponsoring a school program. For example, we set up a through-school sampling program for a client who wanted to distribute detergent samples to moms. Moms were given these samples while attending the Spring Carnival at school, an event where kids are likely to get quite dirty.

Give schools a real reason for doing it - The last thing you want to happen is for your program to come across as blatant marketing with no real benefit to the school. Make sure your offer has value to the school and that your key connection in the school (the person or group who will execute the program) can clearly see how the school and the school families benefit from running your program.

(source:, John Driscoll, 5/20/09)

Tuesday, May 12, 2009

The Pew Research Center measured a number of categories for a chart called "Belt-Tightening in Bad Times." Here are a few of their insights:
  • 57% bought less expensive brands or went to discount stores
  • 28% cut back on alcohol and/or cigarettes
  • 24% reduced or cancelled CATV or satellite TV subscriptions
  • 22% reduced or cancelled a cell phone plan
  • 21% made plans to plant a vegetable garden
  • 20% took over yard work / repairs formerly contracted out

In a recent Gallup poll had a few additional interesting trends:

  • 32% of people surveyes say that not only have they been spending less over the past few months, it has become their "new normal"
  • 27% are saving more and call it the "new normal"
  • 9% are saving on a temporary basis

Here is the reality of business marketing moving forward...bells and whistles are out and thrift is in. As you look at your business you may want to pay less attention to the fluff that has worked in the past. Rather, you should focus your marketing efforts on how what you do will produce a savings in some way or last longer.

Thursday, May 7, 2009

Why Consumers Are Leaving Certain Restaurants

The annual Leaky Bucket Report from Restaurant Marketing Group confirms that the trickle of customer defections from restaurants could intensify in this recession, and lack of value and poor service would ensure that guests jump ship.

The online study measures the size of a customer "leak" for each of 160 brands, meaning the percentage of recent customers who report they are unlikely to return to a particular eatery.

Arjun Sen, president of Centennial, Colo.-based Restaurant Marketing Group, said the restaurant industry's average leak size is 36 percent, up 7 percent from 2008.

"If I were a restaurateur," Sen said, "I would connect the dots by saying that a 7-percent increase in the industry's overall leak means (the customer) is grading me severely now."

The survey of more than 5,600 consumers aged 18 to 64, conducted in March, showed an 11-percent increase for price and value as a reason for leaks, compared with last year, accounting for 36 percent of all defections. Service rose 10 percent compared with 2008 and now accounts for 23 percent of all leaks. The only cause of leaks that declined was location, which fell 7 percent.

Food quality, at 25 percent, and menus, at 17 percent, remain unchanged from 2008 as reasons for leaks.

"The main leak increases we have are price-value and service," Sen said. "You're seeing location as a reason for leaks going down, so consumers are saying, 'OK, I'll go two miles farther if you treat me better and give me a better deal.'

"In recent years, location had been a bigger deal-breaker because so many consumers lived near many different restaurants, Sen said.

One industry segment faring better than others is Asian, as that sector's 37-percent average leak size is a 1-percent improvement on last year's average. While that is slightly above the entire industry's 36-percent average leak, the Asian category outperforms the industry averages on every individual metric for leaks: price-value, service, location, food, menu, atmosphere and family-friendly.

"As a category, Asian is so fragmented," Sen said. "From Panda Express to P.F. Chang's or beyond, they're each a little different. But all of them have freshness cues everywhere, and all have been born more recently than (many other) brands. As consumers look for more choices, these brands are jumping up more."

Asian concepts also score far better than industry averages on price-value and service. The Asian category average score for price-value was 33 percent, compared with 36 percent for all restaurants, and the category's service score was 18 percent, compared with a 23-percent industry average.

By contrast, the bar and grill sector's 22-percent service score is merely on par with the industry average and accounts for more leaks than service in the Asian, coffee, sweets and treats, and soup and salad segments.

"I would have expected casual dining to have the most advantage in terms of service," Sen said, "because they're offering the most service."

Many casual brands also struggle with value perceptions, especially at lunch, accounting for a 39-percent price-value leak score, Sen said.

"They're doing what's 'price-value-relevant' for dinner," he said. "If we want to use the best deal, Applebee's '2 for $20' deal, it's still not relevant for lunch. It's very tough for them to compete with fast food and fast casual, especially the sub sandwich (category). In three to five years, Subway's $5 footlong and Quiznos' $4 Toasty Torpedo will be seen as a defining moment. (Those deals) move traffic away from both fast food and casual dining."

The one segment whose average leak size remained constant from 2008 was coffee, which held steady at 33 percent. The three chains in the sector -- Caribou Coffee, Seattle's Best and Starbucks -- combined for a mixed performance on the two main causes for leaks this year. The coffee segment had an average score of 18 percent for service, better than the industry average of 23 percent. But the sector's price-value leak score was 49 percent, due largely to Starbucks' score of 67 percent.

"Starbucks has a price-value problem," Sen said. "It was still tolerable last year, because people said, 'You don't have low-price items, but if I want to spend $5, you are the best."However, Sen noted, this year Starbucks and other coffeehouses face credible threats from McDonald's and Dunkin' Donuts, who have upgraded their coffee items. The coffee segment leader has responded with its new value offering, the $3.95 breakfast pairings launched this winter.

"Even with Starbucks' price changes," Sen said, "unless they can move many people to that new $3.95 price point, their biggest problem is still in front of them, because so many people still feel Starbucks' price-value is broken.
"However, "service is still great in coffee," he said. "That's what's holding Starbucks together."
(Source: Nation's Restaurant News, 05/04/09)