E x c h a n g e o f I d e a s | July/August 2009 | $10.95
M A G A Z I N E
A publication of Reveries.com and Cool News of the Day
Brand rituals are what turn consumers into customers.
E V O L V 3
Strong retail businesses need loyal customers. Tapping into our expertise with some of the world’s largest retailers
like Tesco, Carrefour and Sprint, we know how to make your brand succeed. From retail to interactive to innovation
and growth, we’ll get you to the Future First.
P I VOT P OINT
M A G A Z I N E
Split Screen J U LY / A U G U S T 2 0 0 9
T he strongest brands are those that remain true to that
which made them strong to begin with. The weak are
those that forget what made them relevant and lose their
way. Seems to me there was a book about that recently.
And yet, we have Google, which makes all of its
money selling advertising, but doesn’t invest much
in advertising for itself. There’s Nike, whose use of Big “G” Identity
recycled materials is often at cross-purposes with its The future of brand identity both depends on and
departs from its past, says General Mills CMO
reputation for “performance.”
Mark Addicks. An exclusive Q&A interview by
A brand divided We now live in a world where Tim Manners.
Toys ‘R’ Us owns FAO Schwarz and
the Penske Automotive Group, a
retailer, owns Saturn, a car company.
Or can it? Then again, we live in a country
where an African-American man
with a Muslim name is President of the United States.
These curious bundles of contradictions aren’t
purely an American phenomenon, though. In Germany,
BMW is encouraging its factory workers to buy the
Tug of War
The front line of building brand identity is now in
cars they make. Factory workers buying luxury cars! the store. A discussion featuring Simon Uwins of
Imagine that. They couldn’t be serious. Fresh & Easy, Tom Britanik of Clorox, Rita
Or could they? Oh, probably not. But just think about Bargerhuff of 7-Eleven, Chris Heye of Welch’s
and Masha Sajdeh of Arc Worldwide.
that for a moment. Google’s strength is its weakness.
Nike’s weakness is its strength. BMW may just be
It is indeed a delicate balance between strengths
and weakness where brand identity is concerned —
witness the rise of store brands as innovative rivals to
national brands. W H I T E PA P E R
Like much of the rest of marketing, things are not
always as they seem, but a world of possibility resides The Shoppers’
within brand-identity contradictions. Perspective
What do you think? Value-seeking behaviors may transcend
demographics. By Mack Hoopes.
Peter F. Eder ALSO
5 COOL NEWS
Peet’s Sake, Five Guys and Porgy & Bass.
Alexander Isley Inc.
11 W H I T E PA P E R
Branding Sales Culture | Recapturing the value of selling skills is critical to
building brand identity. By Joel Nickelsen.
John S. Dykes
14 R ESEARCH R EPORT
Bigger than Elvis | Which brands have the strongest identities? Macintosh
or Windows? Kennedy or Reagan? Walmart or Target? An executive
Active International summary of a Reveries.com survey.
EURO RSCG Discovery
Henry Rak Consulting Partners
Hoyt & Company W H I T E PA P E R
Insight Out of Chaos Map the Market | An understanding of consumer behavior frames a brand’s
Landor Associates competitive advantage. By Eric Greifenberger.
Meridian Consulting Group
Miller Zell Inc. The Waterford Effect | The ultimate strength of a brand’s identity comes
TracyLocke from within. By Dori Molitor.
Hub Club W H I T E PA P E R
RPM Connect Long-Live Brands! | National brands need to up their game to stay on top.
By Mitch Blum.
Henkel Consumer Goods
David X. Manners Co.
33 CASE STUDY
Brand-Image Boffo | A behind-the-scenes look into the making of NetApp’s
global brand. By Britt Dionne.
107 Post Road East
Westport, CT 06880
203-227-7060 ext. 227
firstname.lastname@example.org 36 W H I T E PA P E R
Minding the Store | Shopper marketing must not be subordinated to
category management. By Chris Hoyt.
n Brought to you by the editors of Reveries.
com and Cool News of the Day, The Hub
magazine is dedicated to exploring insights,
ideas and innovation as the ultimate drivers W H I T E PA P E R
of success in marketing. Brand the Experience | Where would great brands be without the shoppers
n Published bi-monthly since July who buy them? By Al Wittemen and Marta LaRock.
2004, The Hub’s circulation is exclusive
to Reveries’ proprietary database of
approximately 3,500 senior-level, client-
side executives in Fortune 1000 marketing
departments and major ad agencies. Becoming Bucky Fuller, Pedaling Revolution and Che’s Afterlife.
n Advertising: For more information on
The Hub’s sponsorship and advertising
opportunities, please contact Joseph
COOL NE W S
“You have to be willing to plant some seeds and wait a few years,”
says Patrick J. O’Dea, ceo of Peet’s Coffee & Tea. Patrick is referring to
Peet’s efforts “to double the income of poor coffee farmers in Kenya,
Rwanda, Tanzania, and Uganda by linking their products with coffee
lovers in the developed world.”
Peet’s plan is “to develop a special blend of ... coffees that will be sold
online and in its 191 cafes starting this summer.” The net would be
better coffee, wealthier farmers and perhaps a burnished brand image
for Peet’s, too.
That won’t be easy though. For one thing, it means doing business
in “war-ravaged” Rwanda, “which has 450,000 family coffee farms”
and dealing with “a frayed infrastructure, a shortage of money to pay
for fertilizer, and suppliers who have little experience in dealing with
So, when Peet’s roastmaster, Jim Reynolds, offers advice, he’s working
Part of the problem is also that most Rwandans do not drink coffee.
with some farmers who “had never tasted coffee and reacted as if they
had bitten into a lemon” when tasting it.
Other obstacles include “bad roads and delays at border crossings”
along a 1,000 mile route to Kenya, followed by two months at sea
before arriving in California. Still, Peet’s v.p. Doug Welsh says that
“the inherent quality of the coffee is very good.” And as Patrick J.
O’Dea sees it: “The return on investment is really the value of our
brand, including the lifetime value of every loyal customer we have.” Five Guys
[S o u rc e : Steve Hamm, BusinessWeek, 5/4/09] “We’re too humble to ever think we can compete with
Wendy’s and McDonald’s,” says Jerry Murrell, founder
and ceo of the fast-growing Five Guys hamburger chain.
Five Guys, as you may recall, recently had the humbling
Porgy & Bass
experience of serving a cheeseburger to the President of the
United States at its Washington D.C. location.
This was after the First Lady made two lunchtime visits to
At Porgy & Bass, a cramped little seafood shop in Queens, New York,
Five Guys with her staff. Topping it all off, the President
the fish dumplings are sold by the ensemble, chorus or solo. The
compared Five Guys to the pyramids during his recent visit
seasonings share a shelf with a Mozart biography. Violin concertos fill
to Egypt. “Five Guys was good,” said Mr. Obama. “This is
the air as customers ponder the “musical witticisms ... written on the
better.” Says Jerry: “I think I’ll vote Democratic next time.”
handwritten signs offering fish specials.”
Founded by Jerry in 1986 as “a small takeout-only burger
Jane Cho opened the shop five years ago and explains, “I really want
restaurant,” Five Guys today has “436 locations in 32 states.”
to run a music store, but I don’t have the money to open one.” So
It is a family-run business and the secret of its success is,
instead she’s got Porgy & Bass, and a living.
um, the food.
She’s been there seven days a week for the past five years, waking up
“We were going to use our food to market our products,”
early and picking up her daily catch at the Hunts Point Market in the
says Jerry. Its burgers are 80 percent fat-free, “a blend of
Bronx. She’s a widow with two grown daughters, Yuri and Yumi, both
sirloin and chuck,” and a total of “13 different toppings
of whom are accomplished violinists.
can be customized for each order.” Five Guys has never
The shop, says Jane, is her oasis. “I don’t have many customers,” she advertised. And, despite pressure, Five Guys still won’t
says. “But they are good customers. I make just a living. I don’t expect serve milkshakes because, Jerry says, “we couldn’t possibly
anything more than that.” have a milkshake that comes out of a machine.”
[S o u rc e : Corey Kilgannon, New York Times, 5/16/09] [S o u rc e : Roger Yu, USA Today, 6/8/09]
Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com
The front line of building brand identity
is now in the store.
Tug of War
What does the term Rita Bargerhuff: It is different Do you see store
from private label and certainly
“store brand” means something different than
brands as a threat to
mean to you? it did 10 or 15 years ago. Today, national brands?
it means that a retailer is able to
Simon Uwins: It simply means a really look at their customers’ Uwins: Not particularly. I come
brand or a collection of products needs and wants very closely and from a background in the U.K.
that a customer clearly associates provide the products and value where they have co-existed
as belonging to the store from that the customer is looking for. for a long, long time. From my
A which the customer bought it. To
Chris Heye: The store brand term
experience, a national brand that’s
R oundtAble a degree, the identities of those
products are interchangeable with makes me think automatically of a
very relevant to customers is not
F eAtuRing the identity of the store itself.
Simon Uwins In the end, what people really
Fresh & Easy think of your brand, as a retailer,
In the end, what people really think of
is their experience in your store in your brand, as a retailer, is their
total. The products are a key part
of it, but so are the other elements
experience in your store in total.
Rita Bargerhuff of the store experience. That’s really Si MON U W i NS
7-Eleven what the store brand is all about.
Chris Heye Tom Britanik: It’s a brand made
proprietary brand for the retailer, What it puts under pressure
Welch’s for a retailer at their request, under
private label. The store brand, to are brands that perhaps aren’t
their label or their brand name,
me, really represents a choice for relevant to customers or unclearly
Masha Sajdeh using a name that they have chosen.
the consumer. positioned. What’s best is a
Arc Worldwide The retailer defines and executes the
combination of both store and
entire value proposition, including Masha Sajdeh: It can mean
national brands because together
what the product attributes are, the anything from the cheap alternative
they tend to grow the category.
pricing, and all of the marketing that the store offers, to exclusive
for that brand. The store brand is private-label brands sold at premium Britanik: I would say that store
only sold to that particular retailer, price-points, to the store brand brands are no more or less a threat
so the retailer has full control of name itself. It can mean any of than any other competitive entry
the brand. those three things. in the category. Store brands
6 THE HUB JULY/AUGUST 2009
have a certain value proposition brands, and that threat is certainly store brands, but also a test for
that appeals to a certain set of palpable among price shoppers today. store brands against national brands.
consumers, just like any nationally
Store brands also have the ability Sometimes the language of whether
branded product has.
to create intrigue and mystery it’s store brands or national brands
We are definitely seeing growth among consumers. This can be can feel like it’s more of a discussion
in store brands, especially in this difficult to do with brands that about who owns the brands. It’s
tough economic environment, more compete on a national, or even very much an inside-looking-out
in some categories than in others. international, scale. National view of an industry rather than about
Thankfully, most of our brands brands may be challenged to customers and how they see things.
have a number one or number two find ways to continually create
Britanik: Store brands are growing
position in the category in which mystique and interest.
for a reason. So, national brands
they compete, so we’re a little bit
However, in some instances, store have a little bit of a wake-up call
brands can also help legitimize and need to look at their value
Those national brands that might
have a weak value proposition are
definitely having a tougher time. National brands that have
We are seeing that in the monthly
share results. All brands need to
a weak value proposition are
ensure that their value proposition definitely having a tougher time.
remains relevant over time, because
T OM BR i TA N i K
you can’t just rely on what the
consumers valued six months or
three years ago. or frame-up the most popular propositions. They can’t rest on
Bargerhuff: You’d really have national brands and have a positive their laurels to ensure that they
to ask the national brands folks effect. When shoppers look at an are relevant to the consumer or the
that question. I don’t have the Olay copycat, for example, the shopper that they are expecting
perspective as to whether we are national brand can benefit from the growth from.
a threat. I really couldn’t speak comparison.
National brands need to look at the
for them. The store brands can give shoppers a store brands and ask themselves
Heye: Store brands are a threat, visual impression of more facings on whether the store brands are
but they are also an opportunity. the shelf, and lend an advantage to taking their core target consumers
They belong here and serve a the favorite brands in the category. away from them and why that’s
purpose for the consumer and for happening. They need to make sure
the retailer. Store brands are a Is there anything that they are differentiated enough.
greater threat to national brands that national brands Ultimately, that’s what it boils
that have a weak, unclear point of
can learn from down to: Your brand has to be
differentiated and offer a better
store brands? value overall, and shoppers have to
If your value proposition relies
heavily on price, then you are be able to see that.
Uwins: There is always something
probably facing an even greater that national brands can learn National brands could also learn
threat, certainly in this downturn from store brands and store brands from store brands in terms of the
in the economy. Store brand can learn from national brands. types of in-store tactics that can be
competition can actually help It works both ways. In the end, a effective to shoppers at the shelf.
the marketers of national brands brand will only be successful if it’s Store brands are good at this
continually sharpen their key clearly relevant to customers. because they generally do not do any
points of differentiation. national advertising for specific
Is it offering and creating enough
Sajdeh: When store brands invite brands and sell largely off the shelf.
value for customers for them to want
a direct price comparison they to buy it again? That, for me, is a Bargerhuff: They might learn
clearly can be a threat to national good test for national brands against something by looking closely at
JULY/AUGUST 2009 THE HUB 7
how store brands define the way Those signs often indicate a lack Are there ways in
retailer customers consume or of innovation in a category. That
use the brand. For 7-Eleven, that is often a wake-up call to all of the
which the store brands
would be the right portion size for brands in that category to bring can work with the
on-the-go eating, or it might be the new solutions to the consumer. national brands?
Sajdeh: Retailers have done a lot to
Uwins: There needs to be an
It could be the flavor profile that merchandise and market their
alignment of objectives in the
our customer is looking for, given exclusive store brands. National
sense that both are committed
the customers that we service. So, brands should recognize that store
to grow a category and to keep a
to the degree that a manufacturing brands are able to create this cachet
focus on the category rather than
brand takes a look at that, there without any advertising. There’s a
on individual products. But the
might be something to learn there. lot of word-of-mouth about some
first point is just making sure that,
store brands that national brands
Some national brands are very, very at the fixture, it just makes sense
might envy and perhaps should try
good at it; obviously, there have to the customers.
to duplicate for themselves.
been strong national brands for a
Why is that national brand there?
long time. But there is a reason that What CVS has done with its
Why is that store brand there?
the store brands have made inroads beauty brands, like Lumene and
Both of them need to be positioned
into some of these categories. Boots, gives the retailer a certain
clearly. Then it comes down to which
cachet and exclusivity because
Heye: We can learn from all sorts one the customer wants to buy.
these brands are available only at
of other brands and competitors.
their stores. There’s no reason why both
We try to learn from anything
shouldn’t be promoted and there
that is growing that retailers and The amount of credibility and
shouldn’t be a joint plan for the
consumers signal are important loyalty that Costco’s Kirkland
category that benefits both. It
to them. We can learn from them brand has is envied by many
shouldn’t be viewed as a battle
between national brands and the
Our objective is to become even stronger store brands, but rather as an
opportunity to grow the category by
in terms of taste profile, innovation in giving customers more real choices.
products, packaging and affordability. Britanik: National brands and
R i TA BA RgE R H U f f
store brands can work together
to create an efficient assortment
on the shelf that satisfies most
how to make ourselves better and national brands, I’m sure. It’s not consumer needs. If shoppers are
how we can help solve problems just a cheap alternative. It is a offered two or three brands —
for consumers and customers. very legitimate quality contender or whatever the category might
and it signifies value for shoppers handle — that’s a simple and more
For example, a lot of the most
without any advertising. efficient way for them to shop
successful store brands have a cost
model that supports their margin Target’s store brands have a lot to and it’s much more efficient for
base. We can learn from that cost teach national brands in terms of the retailer.
model and possibly how we might the credibility they’ve achieved Many categories have way too
become even more efficient. through designers. many items, or SKUs, making
There are a lot of things that we Personal stories, endorsements the shelf very confusing for the
can learn from their top-line growth. and bringing a face and a name to shopper. When a shelf is confusing
Store brands can be a bellwether the brand really add to the intrigue, to shop, consumers sometimes
for category growth, a leading mystery and credibility of its brands. just throw up their arms, and
indicator of consumer sentiment. walk right by because it takes too
Many national brands don’t have much time to shop that particular
I’ve seen many examples where
that; they are simply boxes and section. So it potentially limits the
store-brand growth is followed by
logos on the shelf. category growth for that retailer.
8 THE HUB JULY/AUGUST 2009
There are many of our categories Doing promotions together is an segments. Then they are not a
that are open for simplification easy one. This is especially true threat to one another, but instead
and greater clarity for the shopper. when it comes to the food and take a complementary approach.
The bottom line is keeping the beverage category, since foods are
choices for the shopper simple consumed in combinations. So, What do you see ahead
and clear, in terms of offering we can do many things like joint
the different price tiers. In my promotions to help bring category
for store brands?
experience, that’s what typically growth or cross-category growth.
Uwins: I come from a background
helps drive category growth.
Both store and national brands are where the store brand has
Bargerhuff: We are focusing responsible for bringing category developed over many, many years.
on the value that we offer the growth. If we focus only on Tesco has a whole variety of them
customer. We have a very stringent winning at the expense of store as well as the Tesco brand, Tesco
Finest brands, and so forth.
But there are also national brands
If we focus only on us winning at the expense that are still doing well in the U.K.
of store brands, we may not be optimizing market. Store brands have got a
long way to evolve, particularly in
category sales and profits for the retailer. the U.S. market, where they’re a
C H R iS H E y E bit younger.
Store brands are not the death
knell of national brands at all.
standard that we’re going to be brands, we may not be optimizing
The strong brands that are clearly
national brand equivalent or better. category sales and profits for the
relevant to customers, whether
The real advantage for us is to be store brands or national brands,
able to stay in stock, obviously. Each of the retailers has a different will continue and prosper.
When we develop our own brand, approach and so we try to adapt
Britanik: My guess is that store
we have more control over the as needed and win together with
brands will likely continue to
distribution and the availability of them. We have to do different
grow over time and for a couple of
that product. things with different customers
reasons. First, store brands are a
based on the way they market
So, having said all that, the good business proposition for the
themselves and the way they try to
brands can co-exist. I don’t see retailer, both financially and as
grow their categories.
a challenge with that. 7-Eleven a way to differentiate themselves
really wants to provide ultimate Sajdeh: When manufacturers are from other retailers.
customer choice in our store, collaborating with retailers, there
Second is that retailers will continue
and if someone is particularly is probably a way to look at how to
to become more sophisticated
manufacturer-brand loyal, we align different shopper segments
marketers. They will continue to
want to offer them that. with national brands versus with
improve their store-brand offerings
Now, obviously, customers will vote and how they are executing them
with their pocket-books every time, For example, some segments to the consumer or the shopper.
in terms of whether they have a might include shoppers who are
Every time we’ve had a recession
strong preference. But as long as our highly brand conscious. For them,
it gives the consumer or shopper
customers are buying both national the store brand is not the best
an opportunity to evaluate other
and store brands in volume, clearly product strategy or offering. But
brands. It’s important for every
we are giving them the right choice. store brands or private label may
manufacturer to do some self-
Again, the thing that we like is the be a very viable strategy for price-
reflection and make sure that
control we have over the innovation, sensitive shoppers.
we are providing the best value
the product delivery and the pricing.
So, rather than fight for the same to the consumer. It’s not just a
Heye: There are many ways types of shoppers, they can carve focus on price; it’s a focus on the
that they can work together. out their own spaces for different brand’s holistic value proposition.
JULY/AUGUST 2009 THE HUB 9
T HOUGHT L E ADER S
Bargerhuff: I see us continuing to When store brands become part of
innovate. March was our official, the boardroom conversation, and
national launch of our 7-Select part of the Wall Street conversation,
brand, but we’ve been feeding they are only going to continue to
products into the market since grow in importance. The very best
- 2008. Our objective is to become store brands, the best retailers, and
even stronger in terms of taste the best manufacturers of those store
SIMON UWINS is chief marketing
profile, innovation in products, brands, are going to grow in the way
officer of Tesco’s Fresh & Easy
Neighborhood Market, having
packaging and affordability. they help solve consumer problems.
joined Tesco in 1984 from We will see more investment in
To the degree that we can, we
ACNeilsen. Simon ran Tesco’s store-brand innovations.
will continue to build strength
bakery, health/beauty and non-
foods categories prior to leading at a reduced cost. We’ll do that We are potentially going to see
its marketing in the U.K. by sourcing our own ingredients more retailers narrow the price
and minimizing the distribution gap with manufacturer’s brands.
TOM BRITANIK is svp and costs as opposed to buying lower And I think we will see more
chief marketing officer of the quality ingredients. Our standard innovation from store brands.
Clorox Company, with global is high and it is very real. But Some of the forward-thinking
responsibility for all marketing
functions. Previously he was vp
and general manager of U.S. Auto
Care and Brita, and spent 13 years Target’s store brands have a lot to teach
with Procter & Gamble.
national brands in terms of the credibility
RITA BARGERHUFF is vp they’ve achieved through designers.
of marketing for 7-Eleven,
responsible for the marketing M A SH A SAj DE H
of key proprietary items
and enhancing the in-store
experience. Previously, she was
with Greyhound Lines, Ralston we can continue to offer a lot of people behind a few store brands
Purina and Price Waterhouse. value through both innovation and will adjust their margin structures
pricing. and try to beat national brands
CHRIS HEYE is chief marketing with better benefits and solutions.
We have also started a global
officer at Welch’s Foods with
private label initiative with We’re going to see some store brands
responsibility for invigorating
innovation and delivering business our parent company in Japan, invest more in the premium parts
growth. Previously, he was vp of which is very early on. We’re of a category, and that’s going to
marketing for BP/Castrol, and held taking a global focus in terms bring sophistication and growth.
marketing positions with Johnson of innovation, product sourcing
& Johnson and Nestlé Foods. Sajdeh: Because store brands
and ingredient sourcing. This
are not likely to gain advertising
could continue to be a largely
MASHA SAJDEH is chief shopper support, success will rely heavily
successful and relevant program
strategist at Arc Worldwide, the on creating an authentic brand
for customers worldwide.
marketing services arm of Leo experience. The element of
Burnett, specialists in the inter- Heye: Store brands are going to imagination traditionally created
relationship between shopper, continue to grow in sophistication. by advertising will lack and other
digital, promotion and direct
More and more American retailers factors will continue to gain
marketing. Masha may be reached
at email@example.com. are comparing themselves and importance.
their store brand development to
Things such as the product name,
retailers in Europe.
ingredient story, packaging and in-
Store brands, and the percent of store experience will play a large
sales that store brands represent role in legitimizing the store brand
among total sales, is now a and creating a relevant and coveted
boardroom-level conversation. brand among consumers. n
10 THE HUB JULY/AUGUST 2009
WHI T E PAPER
By Joel NickelseN often recruited to fill key roles. This creates a broad
spectrum of skill levels. The challenge is to build a
Mer idi a N c o N sult iN g gro up
team of sales people who understand the message and
can deliver it consistently to generate results.
ith the advent of today’s shopper-
It’s time to start branding the sales culture. Just
friendly culture, an abundance of fresh,
like a product is branded to differentiate and identify,
shopper insights now sits on top of
a sales organization should also have a branded and
years of category expertise, consumer
differentiated capability for selling.
data, and brand facts. As a result, consumer packaged-
At the core of branding a sales culture is ensuring
goods companies have more to say to their retail
the right skills are identified, developed, and valued.
customers than ever before.
This means that new sales people must learn what is
Often, this conversation between brands and
expected, and managers must know exactly how to
retailers is packaged into attractive presentations that
coach. The point is to simplify expectations, clarify
are the centerpieces of customer meetings. However,
the process and align everyone to it. This ensures a
there is much more to selling than reciting a deck,
consistent approach that is disciplined and more likely
especially when store brands are challenging national
to lead to success.
brands as never before.
Unfortunately, while shopper marketing has
received considerable industry and media attention,
relatively few organizations have even thought
Recapturing the value of about branding their sales teams. In fact, in our own
selling skills is critical to
industry survey of sales executives, 69 percent said
that their organization was the “same or not as good”
building brand identity. as the sales teams of competitors. Fifty-four percent of
survey respondents also admitted that their customers
see the gaps in their selling skills.
This gap in selling skill is astonishing. Imagine
Reducing the sales team to “order takers and a finance department without finance experts, or a
presenters” and ignoring basic and ongoing selling marketing organization with average marketing skills.
skills development can only add to the growing And yet industry leaders tell us the typical CPG sales
perception that national brands are undifferentiated organization lacks differentiating selling skills.
and therefore expendable. Clearly, this is a mistake. They are correct: In the CPG world today, selling
Every company has a critical message it needs skills are not what they use to be. They are taken for
to communicate to customers via its messengers — granted, and are no longer a competitive advantage
the sales team. This team is in constant change for most CPG companies. This puts them at a distinct
with a stream of new, untrained people joining the disadvantage when it comes to fulfilling the potential
organization, along with talent from other companies of shopper marketing to build their brands at retail.
JULY/AUGUST 2009 THE HUB 11
➜ Understanding buyer’s objectives ➜ Handling objectives
➜ Business analysis ➜ Negotiating
➜ Selling features and benefits
➜ Long-term planning
➜ Building rapport
➜ Applying category management principles ➜ Listening
➜ Understanding and using shopper insights ➜ Customer discovery process
➜ Presentation skills
➜ Analytical skills
➜ Presentation development
➜ Stategic thinking and planning ➜ Closing techniques
s o u r c e : Meridan Consulting Group
SaleS SkillS GapS expertise, indicating a more urgent need for action.
To sell effectively, a CPG sales person needs two For example, the skill given the highest importance
complementary skill sets — foundational and strategic rating by respondents was “understanding buyer’s
(see above). Foundational skills include classic objectives and strategies.” This, along with “strategic
communication. We think of these as the “on-call” thinking and planning,” was identified as having the
skills, used mainly while in front of the customer. lowest level of expertise.
Strategic skills include elements such as long-term However, it was not just strategic skills that made
planning and business analysis. These are the ‘pre- the top of the list. Foundational selling skills such as
call’ skills mainly used to develop the selling story for negotiation and handling objections were also identified
the customer. Both are required for success. as critical skills — and skills with significant gaps.
We asked our survey respondents to rate the The question is, why are we in this position? Ask
importance of 12 strategic and foundational skills in most sales leaders and they will lament the intense
enabling a CPG sales person to do his or her job. Not pressure to deliver numbers that supercedes all other
surprisingly, all 12 skill areas were rated 4.0 or better on activities. The expectation for results has accelerated,
a five-point scale. However, when asked about expertise and keeps sales teams looking for quick wins.
(the strength of most CPG sales people) in the same 12 Developing any type of skill takes coaching
areas, the average score was 2.97. It is safe to say that and practice, and those are ideas that quickly take a
industry leaders see a significant gap in selling expertise. back seat to “bringing in the numbers.” This perhaps
Additionally, the skills rated as most important explains why none of the survey respondents said that
also were identified as having the largest gap in their company has a sales-training plan that is both
Top 5 Skill Areas
1. Understanding buyer’s objectives and strategies Strategic
2. Strategic thinking and planning Strategic
3. Negotiating skills Foundational
4. Understanding and using shopper insights Strategic
5. Customer discovery process Foundational
s o u r c e : Meridan Consulting Group
12 THE HUB JULY/AUGUST 2009
comprehensive and effective. Short-term wins again. that gets things done — a.k.a., selling!
Another explanation for the lack of development Additionally, having a defined process for
is the reality that past efforts have had limited delivering the message ensures that sales people
effectiveness. Training on selling skills is often done create the conditions to buy. A multi-step process that
via periodic classroom-type events. While good moves logically from a summary of the situation to
learning often takes place, the content is often not gaining agreement to specific action works best. While
reinforced, which dilutes the benefit. it may appear rigid at first, the result of a disciplined
Additionally, the training is typically not part of a selling process is always improved execution. The
comprehensive plan to build selling skills and is process should be customized for each organization
viewed by participants as an isolated event. The level and becomes a foundation of the selling culture.
of importance and the ongoing effort invested in a Sustaining a “branded selling culture” means
company’s sales culture sends a negative message about establishing a comprehensive curriculum that
the value of its people and their work. Ultimately, senior is delivered via multi-faceted training. Survey
sales management owns the development of the sales respondents want more than a few classroom-type
team’s skill level and must take responsibility for it. learning experiences. While these are valuable, sales
Sales leaders also told us that skill coaching is people need a curriculum that is customized for their
not high quality, or is not taking place at all. Most specific roles and existing skill levels. Once started,
organizations simply hope that people are learning on this training must be reinforced through consistent
the job. But reality is different. According to survey coaching and mentoring activities.
respondents, coaching is only “average” when it takes A culture of selling means that leaders will
place, and fewer than half are involved in a sales be prepared to develop their people in “our way of
mentoring program. Those who should be coaching selling.” They should provide ongoing coaching that
feel limited by other demands. They have no training links to the company’s “way of selling” — whether in
curriculum or common expectations. In short, a preparation for customer engagements or for internal
“culture of selling” is not being developed. selling needed to gain alignment on key objectives.
Finally, to develop expertise, selling skills must
CreatinG the Culture be practiced. This is often overlooked because it takes
The best CPG sales organizations have developed time and can be uncomfortable, however, we certainly
a clear “way of selling” that includes a specific set don’t want to be practicing in front of customers.
of skills and a process that enable their people to Sales people should be put in situations where
consistently deliver the selling story to customers. they can practice and get immediate feedback from
Their dedication to their “way of selling” defines peers or managers. By doing these things regularly,
a clear expectation of the value of sales and is everyone will know that the skills which produce
supported with a comprehensive teaching effort. company revenue are highly valued.
This really isn’t all that complicated. While Creating a “branded selling culture” must not
selling in CPG has become more complex, requiring a be ignored. Sales leaders must be at the front of
broader range of selling skills to be successful, all of establishing this selling culture for it to truly take
the requisite skills still fall into either the strategic or hold. Those organizations that begin the process may
foundational category. Sales organizations can begin find themselves part of an elite group, differentiated
by establishing the two or three key selling skills from competitors in the capacity to sell, and winning
from each category in which everyone in their sales at retail more consistently. Start the journey in your
organization should be an expert. organization and reap the benefits of recapturing the
The key focus here is to bring clarity to specific value of selling skills. n
skills that are required for success in the organization.
Don’t allow selling to be a broad, undefined concept.
Selling is the work. It is much more than being likeable JOEL NICKELSEN is an executive
or having good ideas. consultant with Meridian Consulting
Group, a management consulting firm
Identifying these focus areas allows the organization
specialized in sales and marketing
to build both strategic and foundational skills across organization development. He
all sales people. This helps onboard new recruits, can be reached at nickelsenj@
improve the interface with the customer, and build meridianconsulting.com.
capability to communicate with the customer in a way
JULY/AUGUST 2009 THE HUB 13
RE SE ARCH REP ORT
Which brands have the strongest
identities? Macintosh or Windows?
Kennedy or Reagan? Walmart or Target?
Since the recession is not a whole lot of fun,
we thought we’d take a break from business-as-
usual and play a little game. It was a simple little 44.4%
survey where all you had to do was make a gut-
level choice between two big brands in a bunch
of different categories.
We pitted BMW against Mercedes and
Toyota versus Honda. Walmart versus Target.
Is it Whole Foods or Trader Joe’s? McDonald’s
or Burger King? Macintosh or Windows? Quick:
Which one is stronger? You get the idea.
We also included some pop-culture face-
offs: Beatles or Elvis? Ali or Armstrong? Che
Guevara or Mona Lisa? McDonald’s 85.8%
Sometimes the results were lopsided. Coke
swallowed Pepsi and McDonald’s ate Burger Burger King 14.2%
King’s lunch. Facebook outhyped Twitter and
Starbucks decaffeinated Dunkin’ Donuts. Adidas
was no match for Nike and the Pillsbury Doughboy
rolled right over Mr. Peanut. J. Crew 55.0%
A few glimmers of hope sparkled for the
vanquished, however. A number of survey Banana Republic 45.0%
panelists praised Burger King for its flame-broiled
burgers. Adidas earned kudos for “authenticity.”
And while the Doughboy is much loved for his
giggle, a few lonely souls still think that Mr. Trader Joe’s 51.5%
Peanut is “cool.”
The contests were tighter between BMW Whole Foods 48.5%
and Mercedes, Honda and Toyota and tightest
of all between CVS and Walgreen’s and Whole
Foods and Trader Joe’s. The brand-identity battle
between J. Crew and Banana Republic is also Facebook 82.7%
somewhat close, with Crew pulling ahead, thanks
probably to Michelle Obama’s tacit endorsement. Twitter 17.3%
Perhaps most intriguing of all were the
Walmart versus Target and Macintosh versus
Windows match-ups. One might think that since
Walmart and Windows command their respective
Pillsbury Doughboy 80.8%
marketplaces that they would also be perceived
as having the stronger brand identities.
Mr. Peanut 19.2%
Not so — at least among our readers. Target
beat Walmart 57%-43% and Macintosh whipped
Microsoft, 54%-46%. In a similar vein, Jay
14 THE HUB JULY/AUGUST 2009
THE HUB JULY/AUGUST 2009
than Elvis Leno may have trumped David Letterman in
the ratings, but Dave’s brand identity swept
our survey, 58%-42%. Is this good news or bad
news for those in the business of building brand
Beatles 68.0% When Los Angeles lost out to New York, it
was not without a chorus of “Yo, whoyatawkin
Elvis 32.0% to?” and “Fughetaboutit!” On Eric Clapton
versus Jimi Hendrix, a respondent explained,
“Jimi Hendrix did not steal George Harrison’s
wife.” Neither did Clapton, but Jimi edged Eric
Muhammad Ali 67.9% anyway, 58%-42%.
While it didn’t seem to matter to anyone that
Lance Armstrong 32.1% Elvis is dead, mortality is a problem for Julia Child,
who lost out to Martha Stewart because, well,
“she’s dead, isn’t she?” Martha, who bested Julia
55%-45%, took her lumps, too: “Post-felon chic
Mona Lisa 81.8% simply hasn’t taken hold,” one survey-taker said.
To top it all off, we asked this question: “If
Che Guevara 18.2% your life depended on picking just one brand
identity that is the all-time strongest in the
world, which one would it be?” It is Coke — or
perhaps Coke Is It. By a wide margin, too: Coke
32%; Apple 10%; McDonald’s 5%; and Nike 4%.
The rest were scattered across a wide variety
28.0% of brands, led by Disney, Kleenex, Marlboro and
Harley-Davidson. Other popular choices included
the United States of America, Christianity and
President Obama. Perhaps the biggest surprise was
that Google only received four votes, Target two
Home Depot 63.3%
votes, Microsoft one vote and Walmart no votes.
This was so much fun we’re going to run it
again next year! Please send suggestions for brand-
identity face-offs to: firstname.lastname@example.org.
A total of 523 survey respondents included
agencies (24%), brand marketers (26%) and
consulting firms (17%). Thirty-four percent
worked in packaged goods firms, nine percent in
media/entertainment and eight percent in retail.
A majority were senior-level executives, with
75% reporting more than ten years of experience
Dunkin’ Donuts 30.2%
JULY/AUGUST 2009 THE HUB 15
JULY/AUGUST 2009 THE HUB
WHI T E PAPER
By eric greifeNBerger
Market determine which brands and products you compete
against, you need to understand how consumers
H e N r y r a k c o N s u l t i N g pa r t N e r s
Both usage and purchase behaviors need to be
any times we are asked, “What’s considered to determine what consumers are doing
the most important part of the and to identify a precise competitive frame. The
usage information allows you to define a market very
strategic positioning?” While a broadly and identify competitive sets based on the
brand’s benefits, reason-to-believe way consumers use certain products to meet specific
needs. The results are often eye opening.
and the consumer target are all important, the
competitive frame is the one critical element in
the strategic positioning equation that must be An understanding of
precisely right before you can develop the other consumer behavior frames
elements effectively. a brand’s competitive
Until you know exactly which brands you need advantage.
to win against for a greater share of the consumer’s
mind, heart and wallet, you won’t know how to best
improve your strategic brand positioning. You won’t For example, premium-priced hair-coloring
know whether your brands really matter to consumers products are growing of late because they compete
or not. against expensive salon treatments and are viewed as
The first step is to identify where your brand sits a quality value alternative by consumers. High-quality
on the competitive landscape and which brands and frozen dinners compete not just against each other,
products it truly competes against. This is often not but also against carryout food from quick-service
only the brands or products you think of first (i.e., the restaurants.
ones next to yours on the shelf). In the pain market, some over-the-counter brands
Most marketers feel they have a pretty good idea compete with prescription products and services
of the brands they compete against, but often that because they solve similar problems for consumers.
competitive frame is either defined too narrowly or too Taking a broad view of how consumers use your
broadly. Many times it is defined by the Nielsen or IRI brand helps you define the true competitive frame
category definitions, internal Ivory Tower hypotheses, whether yours is a brand of mattresses, organic foods,
attitudinal surveys or focus groups. However, to beverages or beauty products.
16 THE HUB JULY/AUGUST 2009
Chart 1: The Market Map
Competitive Set Competitive Set
Sub-Segment Sub-Segment Sub-Segment Sub-Segment
1A 1B 2A 2B
Brand A Brand E Brand C Brand G
Brand B Brand F Brand D Brand H
Need State #1
Need State #2 Need State #2
Consumer Segment #1 Consumer Segment #2
Consumer Segment #1
s o u r c e : Henry Rak Consulting Partners
Once usage behavior is understood, there is the Lastly, it is important to identify which
important step of drilling down into the purchase consumers gravitate toward a competitive set to
behavior of specific segments. Purchase behavior understand who is behind the purchasing and
allows for a more granular understanding of each utilization of your brand and near-in competitors.
competitive set and tells you what drives consumer
choices within the competitive set. look at Wh at th e y d o
Organizing switching patterns identifies the Understanding the what by using actual
attributes that most drive consumers’ loyalty to your consumer behavior is the critical starting point for
brand. You will know the relative importance of brand developing a relevant, differentiated strategic brand
equity, form, flavor, product type, a critical benefit or positioning. Too many times there is significant
even size in driving purchase behavior. disparity between what consumers say they do and
Once you organize the usage and purchase what they actually do.
patterns of consumer behavior, you will definitively According to an April 2009 Time magazine poll
understand how well your brand and product of 1,000 Americans, 46 percent of respondents said
offerings stack up and how much your brand matters they were going to the movies less this year. However,
versus the competition. tracked attendance and spending at the box office are
Next, find out what consumers want or desire up 16- and 17-percent respectively through the same
from each competitive set and what role your brand time period (Media By Numbers).
plays within each set to understand why they are While 28 percent said they are spending less on
choosing among a set of brands for a specific job. For alcohol, volume and dollar sales are up YTD across
each job, consumers have specific needs and each all alcoholic categories and 7 percent overall (IRI
brand in that competitive set fulfills against them to point of sale data through April YTD). With actual
varying degrees. How well your brand delivers on consumer behavior as its foundation, your strategic
them, real or perceived, is a key factor motivating brand positioning will be much more precise versus
consumers to be loyal or to switch to another brand relying upon interpretations of consumer opinions or
within the competitive set. subjective snapshots.
JULY/AUGUST 2009 THE HUB 17
Chart 2: “D” Me Too Brand
Competitive Set Competitive Set
Form 1 Form 2
Brand A Brand B Brand C Brand D
s o u r c e : Henry Rak Consulting Partners
Once what consumers are doing is well understood, perceive the brand that is grounded in their actual
marketers must also determine the why’s behind the behavior and provides a unique competitive
behavior. What are the motivators and consumer advantage for your brand (see chart 1).
desires that make them act the way they do? It is The market map will tell you if you have a
essential to understand both functional and higher- differentiated leader brand standing apart from
order emotional needs. competitors or more of a “me too” brand that offers
“Need states” or “consumer drivers” are methods a solution with similar benefits to the competition’s
of understanding what consumers are looking for to (see chart 2). You’ll know what role your brand serves
solve a job to be done within a competitive set. This — whether mainstream or niche — which will help
helps explain why they are choosing certain brands you to anticipate what consumers expect and want
over others. Recognizing the why’s driving consumer from the brands with which you compete.
behavior will enable you to create differentiation in Armed with an understanding based on this
meaningful and relevant ways. framework, you are ready to evaluate your brand’s
Beyond this, we must understand who is strategic positioning and determine how to make it
gravitating to the defined competitive sets. First, it is more compelling.
important to identify the consumers who will provide
the greatest growth potential through their current ti m e to GroW
behavior. SPECTRA is a good demographic and Now that the competitive frame of the market in
behavior-driven tool to use for this purpose. which you compete is precisely defined and clearly
Additionally, consumer segmentation offers understood, you can decide the best course of action
attitudinal insights that can be very helpful in for your brand.
understanding what your high-value consumers are If it turns out your brand stands apart from the
like and what makes them tick as people. Now you competition in a meaningful way, it likely already has
will know how to find your high-potential consumers a clear and powerful positioning that homes in on
and how to best connect with them. critical benefits, delivers them better than the competition
Integrating all the elements within a market of and is attracting the right target group (see chart 3).
what consumers are doing, why they are doing it But more than likely you will learn enough about the
and who they are, provides the perfect foundation marketplace to find ways to strengthen the strategic
for evaluating where your brand stands in the brand positioning to get consumers to switch to your
marketplace. It is a market map of how consumers brand and accelerate growth.
18 THE HUB JULY/AUGUST 2009
Chart 3: “D” Differentiated Leader Brand
Me Too Brand
Competitive Set Brand D Competitive Set
Form 1 Form 1 Form 2 Form 2
Brand A Brand B Brand C Brand E
s o u r c e : Henry Rak Consulting Partners
First, assess the competitive-frame learning to you win against brands/products in both competitive
decide where you want to focus your brand. Brands sets. No longer are you the “frozen” pizza solution but
sometimes cut across multiple competitive sets within instead you are the best “pizza” solution.
a market, but brand leverage may be greatest in If your brand and product experience can deliver
one or two of them. Focusing in one competitive set against the benefits, it will make your brand a better
within a market can provide greater opportunity to pizza solution overall. In this instance, you have
grow your brand. a chance to accelerate your brand’s growth rate by
For example, if your brand is a pain reliever, it altering your strategic brand positioning and carving
may be used for all types of pain but is utilized most out a new space for your brand to source new sales
frequently against either headache or body pain. from both competitive sets.
The market map will determine your brand’s area of Evolving your brand positioning is a strategic
strength and help identify what it takes to win. You exercise that gives you the platform to grow your
will be informed as to which key benefits to leverage business. To ensure your brand matters, know how
and against which consumer group to give the brand you stack up against competition and develop a
the power to win in that specific competitive frame. powerful, relevant strategic positioning that sets your
Conversely, you may have focused your brand brand apart from its true competition.
benefits against one competitive set within a market Remember, you are in control of your strategic
when you really have leverage to win against multiple brand positioning. Once you put yourself in the driver’s
competitive sets. seat and ensure your brand is positioned to become a
For example, store-bought pizza and take out/ fiercer competitor, you will be on a road that ensures
delivery pizza from restaurants serve as two sub- your brand matters well into the future. n
competitive sets. They compete with each other to
a degree, but for the most part competition occurs
within each set. But if you learned from the market ERIC GREIFENBERGER is a managing
director with Henry Rak Consulting
map that your store brand is competing with
Partners (hrcpinsights.com), a growth
both sets, you must be delivering an experience
strategy consultancy. Previously Eric held
more similar to take out/delivery than other store senior marketing positions at Kraft and
brand pizzas. was in field sales at Pillsbury. Contact:
This presents the opportunity to broaden your email@example.com.
competitive frame and offer benefits that will help
JULY/AUGUST 2009 THE HUB 19
E S S AY
aking a tour of a manufacturing plant has said, ‘You’re not going to stop people from coming to
never been high on my list of things to do, the place they’ve worked all their lives, where their
but there was something about the Waterford family worked, and where they have built up the
Crystal factory, in Kilbarry, Ireland, that brand themselves.”
drew me in. The soul and the energy of it Another worker, Sean Eagan, was just plain
was just too powerful to ignore. incensed: “That is no way to treat people, to stop
Once inside, I could feel the pride of every one of them from coming into their own factory.” Sean had
the factory’s workers. As I walked by, they gave me worked there for 35 years.
the biggest smiles, with the most welcoming eyes. Sean, Tony and their co-workers did leave
They loved to talk about their work and why it was eventually because “business is business” as everybody
important to them. They were only too happy to stop knows. But one has to wonder what the long-term
what they were doing for a moment to pose for pictures. effects of Waterford shutting down this crucial part
of its heritage — its soul — might have on the brand.
There may be other capable craftsmen elsewhere, but
The ultimate strength it seems unlikely that they would bring anywhere near
the kind of spirit I felt that day in Kilbarry.
of a brand’s identity Waterford’s workers also raise an interesting
question for anybody in the business of building
comes from within. brands today: If you closed one of your factories — or
offices — today, would anybody really care about
anything other than their lost wages?
It wasn’t just for show; they were plainly pleased It’s a question worth considering now more than
to be a part of what Waterford is. I met a young man ever, with the economy still struggling to reach solid
whose parents also worked at the factory, as had his ground.
grandparents. It wasn’t just about manufacturing; it In the last issue of the Hub, I wrote about a
was pride, it was heritage and it was art. long-term shift in consumer culture that is now
These workers weren’t just there for a paycheck. accelerating because of the recession (The Big Shift,
They were there for a purpose. May/June 2009). I wrote about how consumers are
My tour happened several years ago, but you can renewing their own sense of responsibility, taking
imagine my shock when I read in the paper earlier greater personal control of their lives, re-defining
this year that Waterford Crystal’s parent company, value and pursuing greater meaning and purpose in
now owned by a private equity firm, had closed the their lives.
Kilbarry factory. Apparently this decision was made Their message, like those Waterford workers,
because it was less expensive to manufacture the is that “we matter.” They want the business world
Waterford brand elsewhere. to look them in the eye, bring a human touch and
I was far less surprised to read that the nearly understand their realities.
500 people whose lives were lived in that factory That’s a huge opportunity for any brand. The
refused to leave after it was shut down. Tony Kelly, problem is that although consumer culture has
one of those workers, told the New York Times, “We shifted, corporate culture, for the most part, lags
20 THE HUB JULY/AUGUST 2009
behind. I believe this is because too many companies a B e t t e r Wo r l d
fail to understand what it truly means to do the things While creating better lives for one’s employees
consumers are already doing — to pursue meaning is an obvious prerequisite for any company hoping
and purpose in their businesses just as consumers are to keep pace with today’s consumer culture, it
pursuing meaning and purpose in their lives. doesn’t stop there. Ultimately, the internal happiness
of the corporate culture must manifest itself in the
a Si lv e r l i n i n G
marketplace, as well.
Everybody knows that any enterprise has four Ikea is a great example of how this works. Ikea is
primary responsibilities — to its customers, its employees, well known for having a wide-open, non-hierarchical,
its investors and to society at-large. The health of the organic culture, where ideas are shared freely among
enterprise depends on serving all four equally well; its workers without regard for title or rank. This
it’s when the balance between these responsibilities is environment no doubt led to Ikea’s idea to offer free
off that companies find themselves in trouble. babysitting services to its shoppers, regardless of
It’s curious to me that so many brands seem to whether they actually buy anything — or even go
place more importance on supporting remote causes shopping — in the store.
than they do supporting their own employees and Now, shoppers are not allowed to leave the store
customers. It’s not about one-off, tactical cause under any circumstances after they drop their kids
marketing campaigns. It’s about a long-range strategic off at Smaland, the Ikea babysitting center. But often
commitment to be a values-driven company. It’s about they just head for the store’s café, where the wireless
the corporate body having a soul, because to have a is free, for a little downtime. As the retailer’s PR chief,
soul is intentionally human. Mona Liss, told the New York Times: “We certainly hope
The silver lining of this recession is that a handful they’ll purchase some Ikea products, but if they don’t,
of companies seem to be waking up to the fact that we still feel satisfied we introduced them to Ikea.”
strength begins at home, and are investing more in It’s certainly no coincidence that while many of
ensuring the happiness of their workers and customers. Ikea’s competitors are suffering sales declines during
They’re doing so because it’s obvious that happier the recession, Ikea’s sales reportedly were up five-
workers lead to happier customers lead to happier percent in January.
investors. The world is a better place for everyone. Nothing I’ve written here about treating workers
The question is, how to do this? There is no one, and customers well is news to anyone reading this
simple, prescriptive answer that applies across the page. These are very basic principles that everybody
board. I do think that Avon, under the leadership knows. Every company has values and a culture of
of its chief executive officer, Andrea Jung, is an one kind or another, after all.
inspirational example of one company that is on the But how many companies have a culture where
right track, however. the employees would refuse to leave even after
It’s not as though Avon hasn’t taken its lumps, they’ve been laid off? How many see the recession
because it has. What’s notable about Avon is that Ms. as an opportunity to empower women? How many
Jung has made it her mission to “empower women” would offer free babysitting services and wireless to
at Avon. shoppers who aren’t there to shop?
According to an article in the Economist, Ms. Jung The answer is easy: Not nearly enough. But
is aggressively recruiting new employees, pitching values-driven companies, whose corporate cultures
women on job security, flexible hours, financial are truly aligned with today’s consumer culture, are
independence and running their own businesses. So leading the way out of this recession into both higher
far, she has added about a million new sales reps, profits and a better world. n
and while its profits are still falling, it’s falling by less
than many of its rivals.
It’s also worth noting that the company is DORI MOLITOR is founder and CEO of
pursuing its “empowerment” strategy at a time WomanWise LLC (womanwise.com)
a WatersMolitor Company, a hybrid
when many other companies would likely decide to
consultancy-agency specializing in
backburner it. But Ms. Jung told the Economist that marketing brands to women. Dori can be
her approach is a “constant turnaround mentality” reached at firstname.lastname@example.org
and that she actually sees the current recession as a or (952) 797-5000.
JULY/AUGUST 2009 THE HUB 21
COVER S TORY
ark Addicks has a deep and abiding affection for his brands,
some of which his own family has used for generations.
“It’s just amazing that, after growing up on a farm in Brenham, Texas,
I could end up in Minneapolis working on a brand like Cheerios that my
grandparents loved,” says Mark, chief marketing officer at General Mills.
It’s true: Few companies could lay claim to as many enduring,
iconic brands as does General Mills. So, how is it that so many
“Big G” brands have achieved such status for so many years?
Mark suggests that there’s really no great mystery to it.
“Brand building has been the primary corporate strategy of
General Mills since the beginning,” he says. “Year after year,
we have terrific people who take our brands and make them
even more iconic.”
General Mills has always made it a priority to understand the
roles its brands play in everyday life, says Mark. It’s not enough
simply to identify who uses which brand. It’s about connecting
with those who can’t live without the brand, people he likes to
call “brand champions.”
Increasingly, Mark’s champions are Hispanics and African Americans —
consumers that Mark says many other companies ignore, but who are
driving much of his company’s growth.
“At General Mills, we’re passionate about inviting all of those consumers into
our brands and we’ve been rewarded for those efforts,” he says.
Another key to iconic brands, says Mark, is a corporate culture that respects
the past while aiming at the future, and that literally connects those who used
to work on a brand to those creating its future.
It’s a future, he adds, where a brand’s reputation for ethics and social
responsibility increasingly trumps traditional product benefits.
22 THE HUB JULY/AUGUST 2009
The future of brand identity both
depends on and departs from its past,
says General Mills CMO Mark Addicks.
If Wheaties were launched today, could it have You once said that great marketers
the same kind of impact on popular culture? market to everyone. How is that possible?
Yes, I believe so, and we may see that coming to What I see in a lot of cases is that brands are only
us in the future. The fundamentals of Wheaties are marketing to 60 percent of the population because
about a cereal designed to help athletes perform at they literally are not communicating with Hispanics
their best, which never goes out of style. or African Americans. That’s what I was referring to.
There are certain elements of any brand that are Sometimes I’m sitting in one of our industry
timeless. When a legacy brand is not performing well, meetings and it stuns me how marketers are still
one of the first places we always go back to is the time thinking of parts of our population as being very
when the brand and its category were at its peak. Then small. In fact, if you’re marketing to ten-year-olds
we ask, what would be the translation of that today? today, you can pretty well guarantee that more than
That tends to unlock a lot of growth and good 40 percent of them are not in the general market.
ideas. For example, there was a saying on the original That’s pretty astounding.
Hamburger Helper package, “one pound, one pan, one These are sizable parts of the population that
happy family.” That was something we brought back we’re passionate about at General Mills because
into today’s language, and it worked really well. they’ve been ignored. We are now growing at twice
the rate with Hispanics than in the general market,
What’s going to become of Hamburger and one-and-one-half times the rate with African
Helper when the recession ends? Americans as with the general market. That’s a huge
Hamburger Helper is a great brand and product opportunity for most marketers.
experience that will continue to do well. There will
always be times when your brand really fits the Why aren’t they pursuing that opportunity?
moment and times when it doesn’t fit quite as well. Most marketers are retrenching because of the
So, you need to figure out how your brand becomes recession. What I find odd about that is that if they
part of the consumer’s ritual. really did a solid business analysis of their brand
For instance, Old El Paso has built a ritual around marketing, most of them would find that they are over
the Thursday night taco dinner. When the recession saturating the general market and under-indexing in
goes away, maybe people will feel like they can go the multicultural market.
back out to eat on Thursdays. But if it’s more than a
product and truly a brand experience, Old El Paso will How will the rise of store brands affect the
continue to stand for Thursday night and having a fun identity of national brands like yours?
meal at home. Store brands are a challenge, but they also present a
great opportunity for us to deliver things that consumers
Where do breakfast cereals fit really care about in a proprietary way. Retailers are
into that kind of ritual? making us much better as brand marketers.
We need to constantly remind consumers that the
ten minutes it takes to pour a bowl of cereal, get your What does shopper marketing mean
milk and sit down and eat it is a lot less than driving within the General Mills organization?
somewhere and ordering an 800-calorie breakfast. At General Mills, we pursue it by retail partner
Breakfast cereal is really a great way to start your day and we call it retail marketing. We look at ways that
and start it at home. our brands can win while we help make that partner
JULY/AUGUST 2009 THE HUB 23
win in the marketplace. That can be proprietary What is the next frontier of brand identity?
marketing tools that we bring to help them market an Part of the next frontier of brand identity is how
event that is unique to their store, for example. brands are going to continue to grow in this world
We work very closely with retailers in terms of of consumer engagement. So, social media is a big
looking at their full schedule, what they are seeking next frontier. Another next frontier for some brands is
to do and whom they are targeting. We try to find going to be direct-to-the-consumer. That could be in
unique and proprietary ways that we can partner with terms of marketing, retail or any number of things.
them and then plug in and feature the right General The whole area of corporate social responsibility
Mills brands for each of those initiatives. and sustainability is going to be big. Many younger
people expect that the small number of brands that
You call it retail marketing, they will identify with and talk about must have some
not shopper marketing? kind of cause or social profile. That’s become a
We called it shopper marketing, but our new term prerequisite, even before taste.
is retail marketing.
What’s the difference? Yes. It’s really interesting. I recently did some
Truthfully, probably nothing! But we take it ethnographic work, following 20-somethings around,
seriously at General Mills. And we would like to be just talking with them and watching them shop for
ranked higher on your Hub Top 12 list. food. I was surprised at some of the brands they
picked and asked them why. And they said, “Well,
It might help if you went back to actually the other one tastes better, but I won’t buy it
calling it shopper marketing! because this brand supports a good cause.” Ten years
Yes, well, whatever you call it, we’ve assigned ago you wouldn’t have heard that.
marketers to key retail accounts. They are part of
a unit that meets regularly, shares best practices, Is sustainability number-one
learning and the like. They are supported by teams on the list of causes?
that work with unique capabilities and tools, such as There are other things, as well. For younger
cross-media promotion, for example. women, breast cancer, for Yoplait, is very, very big.
Basically, they work directly with the marketers I shopped with a couple of young mothers, who
at the retail account to understand what their objectives were 28, almost 30, and our Box Tops for Education
and key events are. They coordinate with our sales program was a big, big deal for them.
folks in terms of what we are going to feature and the
capabilities we can bring to make those bigger and You have been doing that for years, right?
better events for them. We have been doing that for years, but these are
Kindergarten moms, so they are just discovering it now.
Does TV still define brand identity A couple of them referenced that they used to buy
more than other media? other brands but switched because of the Box Tops
TV is always important because it is such a great program. It’s just been terrific. I think this is going to
medium for seeing, saying and visually understanding be more important as we go into the new frontier.
something. It’s going to be interesting to watch the
ability to customize more on a per-household basis. Does that frontier include healthfulness?
We’ve done some experiments with that, where Absolutely, but that may be a different group.
you can get very, very targeted and actually deliver What you have is very interesting in that almost
one-to-one messaging through the television. That’s 80 million Americans, in the Boomer range, are
going to be a big, revolutionary change for TV. rediscovering brands based on their health profiles.
I’m also a big proponent of local radio for some They are becoming very loyal to brands that they
brands. Most people would be surprised by our media weren’t eating before.
mix because while it’s still heavily TV, it’s also very Another thing I’ve seen in some of my consumer
strong in digital, local radio and print. work is that younger people are particularly health
aware because they have observed health conditions
24 THE HUB JULY/AUGUST 2009
THE HUB JULY/AUGUST 2009
Cereal Cut ters
eneral Mills has come up with a “fat-trimming same. The upshot: Hamburger Helper now costs 10
system called holistic margin management percent less to make.”
that’s starting to pay off in a big way.” Looking
Other victories included getting rid of “multicolored
for ways to cut costs is nothing new at Mills, “but the
Yoplait lids.” That saved $2 million a year. Mills has
rise in inflation a few years ago spurred it to seek a
also eliminated box sizes that don’t fit neatly onto
more effective companywide productivity solution.”
trucks, and saved some $12 million annually by
The key was to get everyone within the company to consolidating purchasing of “oils, flour and sugar.”
scrutinize costs. That concept was applied for the
Mills takes care to note that innovation still rules.
first time to Hamburger Helper, of which there were
But as CEO Ken Powell explains, “First you have to
50 versions at the time, “with 25 pastas ranging from
protect your margins.”
wagon wheels to spirals.”
The net of these cuts is that General Mills last year
Mills looked into the costs of having so many
“posted a 13 percent gain in profits on a 10 percent
varieties, researched “how much consumers liked
increase in sales,” giving it “fatter margins than Kraft
them, and then eliminated half of them. They excised
and ConAgra,” according to analysts.
unimportant spice and cheese pouches. They shrank
the size of the box while keeping the serving size the [s o u r c e : Mina Kimes, Fortune, 11/10/08]
in their parents. I was talking to a couple of 30-year- then usually we have a provocative speaker, such as
olds during one of my store checks and they were David Plouffe from the Obama campaign.
buying Fiber One. I was kind of surprised. Each of those meetings is followed up by a
digital case study of somebody else’s brand that is
That sounds like a significant shift. performing well in the marketplace. We also have a
It is. But to me, it’s really that they’re taking a marketing portal that includes all of our best practices
more holistic view of a lot of things. They look at the and reports.
entire world, the way we live our lives, how much we Many of these initiatives are based on a “next
recycle, how much is sustainable, the foods we eat, frontier” question of how big organizations can have an
and they are asking a lot of questions about all of advantage in today’s world. What we’re really trying
these things. to do is build a community that connects and leverages.
What is the most innovative thing How has that played out within the organization?
happening at General Mills? Well, for example, about six years ago, we started
There are a number of things I would point to. One out on a hunch, with an experiment. We had an
is a program called Bold Experiments, where once a advertising campaign for one of our cereals that is
year we’ll offer several million dollars for innovative marketed to ten-year-olds. The group planned to do
brand development ideas. Any brand can apply. an extensive advertising test by showing some of the
Sometimes you need the excuse of these kinds work to consumers in three different cities. You can
of programs to make sure that everybody in the imagine the cost of that.
organization feels liberated that they can put an idea Instead, I gave them the names of eight people
forward and get funding for it. who, like me, have been at General Mills forever
The way we’ve brought our marketing and who have worked on these brands in the past.
community together is, in itself, pretty innovative. For These weren’t just marketers; they included product
example, we have a global marketing meeting that’s developers, R&D and supply-chain people. I asked
known as First Wednesdays. I kick off the meeting, them to listen to what these people had to say before
we share best practices from around the world and doing any consumer work.
JULY/AUGUST 2009 THE HUB 25
JULY/AUGUST 2009 THE HUB
So we did that, and within a matter of minutes we Is that changing the way you
had direct assessments of each of the ideas, which ones work with your agencies?
the consumers would and wouldn’t like, and why. We It is. In general, we’ve changed how we work with
wrote down everything and then went through all of our agencies. We’ve gone to a system called Brand
this expensive research, which of course confirmed Navigator, where two of our agencies, McCann and
everything they had said. The only difference was Saatchi & Saatchi, are global agencies, and act as the
money and time. “navigators.”
That was a real eye opener. From there we’ve We put them together with digital agencies, media
become very serious about how we put this community buying agencies, Hispanic and African American.
together in a different way. We have to make sure that They lead that work and the lead idea can come from
making and leveraging connections internally is the any of those teams. They are paid on growth and we
cultural practice, and not just an instinctual practice have been pretty happy with the results.
that some people happen to do very well. The problem
is, others don’t, and we want to change that. What do Cheerios mean to you?
We also have a one-week course called Brand Well, they have a special meaning to me. I grew
Champions. It’s a really detailed course. In one week, up in a household, honestly, where my parents were
you see 400 cases. It is taught by our own people. We very permissive. So, I had Cap’n Crunch. I had Frosted
make each of our senior marketers teach one of these Flakes. I had a lot of sugar and there seemed to be no
courses a week in very small groups of about 25 people. end to it.
We’re in the business of connecting our people But when I went to my grandparents, they gave
and making sure that they speak the same language, me Cheerios. I liked Cheerios — my grandparents were
that they have the same culture, so that they will all about Cheerios. I should be careful how I say this
connect and communicate with each other. That’s because my mother might get mad at me!
really powerful. So, one Friday afternoon, I went to our archives
here at General Mills to look at our packages. I came
How do you connect and leverage externally? upon a box and it completely stopped me. I caught my
We are extremely externally focused, as well, breath. There was an offer on it for these beautiful
which we weren’t five or six years ago. We are always porcelain bowls, white and blue. These were the bowls
benchmarking and we do a lot of soliciting of ideas that were in my grandparents’ house. They had a set
externally. I love to go visit other companies. You of them.
walk in the door and you just get a sense of what the Now, here I was, sitting in this room at General
company is like, if it’s a sharing culture or not. Mills, looking at this box, and I was just emotional.
About three years ago, we did an incredible study I just thought my grandparents would have been so
on multicultural marketing. We started out with a proud of me.
company that we thought, just through general
literature, did the best job and asked them if they would So, will you be offering bowls again?
share information with us, and they did. This company You know, everything that’s old is new again, and
was getting 45% of its sales from Hispanics for a I do think we need to offer bowls again. Sometimes
national brand, but its success was kind of a secret. we forget about these things that worked. It is a
They had a very different organizational structure different country today, but we need to do more of
for multicultural marketing. They had people out that kind of thing. n
in the field, working against retailers, and getting a
demonstrably good result. We brought that learning
MARK ADDICKS is senior vice president,
back in, reorganized and reshuffled. When you go
chief marketing officer, of General Mills,
outside and bring it back in, you just have to respond with responsibility for the company’s
to it. If you don’t go outside, you don’t have to respond global brand-building strategy, including
to it. The only time you have to respond to it is when its advertising, promotions, public
you have a disaster on your hands, market share loss relations, design, packaging, online,
or whatever. licensing and multicultural initiatves.
26 THE HUB JULY/AUGUST 2009
THE HUB JULY/AUGUST 2009
WHI T E PAPER
Brands! By MitcH BluM Let’s start with some pertinent facts. According to
“During the year ending February 2009, Nielsen
reports that store brands in the U.S. posted $84.4
hen it comes to cultural trends, the
billion in sales, a nearly 10 percent annual increase
only thing that Americans love
attributable in large part to consumables like dairy,
more than embracing new ones is
packaged meats, frozen foods, deli, dry grocery and
declaring the death of old ones. I’d use
the wonderful phrase “jumped the shark” to describe
this phenomenon (John Hein’s term for identifying
the point where things pass their peak, named after
the Happy Days episode in which a leather-jacket-clad National brands need to up
Fonzie water skied over a shark), but in all honesty,
“jumped the shark” itself jumped the shark quite a their game to stay on top.
few years ago.
This phenomenon, however, isn’t just limited
to cultural trends and television shows. Everything The key takeaway is that store brands had a really
from political parties to media vehicles are constantly good year. According to the Miller Zell/NRN 2009
being declared “over.” Eight years ago, the Democrats Shopper Behavioral Study (an online survey of 801 adults
were deemed irrelevant while today the Republicans conducted during the week of December 22, 2008):
are being declared D.O.A. Television was supposed to “Nearly nine out of every ten respondents reported
replace radio, while the internet was going to kill off ‘brand switching’ (from national brand to store brand)
newspapers. (Okay, that last one might still turn out within Grocery in the last six months, with another
to be true.) one-third reporting that they have ‘brand switched’ in
One of the more notable occurrences during our Apparel.”
Great Recession has been the explosive growth of It’s hard to argue with those numbers. If you’re
private labels. Sales and purchase intent of private shopping at grocery these days, you’re probably sampling
labels have been growing exponentially, with no end some store brands. Of course, even with this impressive
in sight. The temptation, naturally, is to seize upon growth, the U.S still lags most countries in store brand
this latest trend as a sign of the end of brands. dollar/value share. Again, according to Nielsen.com:
It’s a new era! Brands are dead! The age of “There’s plenty of room for the American store
brands is over! brand trend to turn into a juggernaut, since the
I’m not so sure about that. domestic 17% store-brand share trails the uptake in
Just like video never actually managed to kill the western European counterparts like Switzerland (46%),
radio star, the ascension of private label in no way the UK (44%), Germany (32%), Spain (29%), Belgium
indicates the death of brands. Actually, I’m more inclined (28%), Austria (27%), Canada and France (26%).
to view private label growth as a triumph of branding. Given the interdependency of the global economic
JULY/AUGUST 2009 THE HUB 27
markets, the appetite for store brands may well be The common thread that ties Choxie, “O” and Two
increasing across affected regions.” Buck Chuck together is that they have all undeniably
The future of private label looks rosy indeed. become established brands in their own right.
th e r i S e of Store BrandS t h e va l u e of BrandinG
A funny thing happened on the way to the 21st Why do consumers purchase branded products
century. As leading retailers grew into national anyway? There are a multitude of answers to that
behemoths and consolidation reduced the number important question which are entirely dependent on
of major players in each category, retailers began to one’s perspective.
realize that, to succeed, they’d need to differentiate A nutritionist would contend that consumers train
themselves from their key competitors. their palettes to respond positively to the taste of
National retailers began to focus on building their manufactured ingredients that appear in many mega-
own brands more aggressively. Sure, they’d continue corporate branded products. A psychologist might
to feature national brands in their circulars and their contend that consumers purchase brands that were
television advertisements, but the intention behind in their childhood household to stimulate nostalgic
their advertising campaigns changed substantially. feelings of security. An anti-consumerist would contend
The messaging hierarchy had shifted significantly: that brand loyalty is merely a product of mass
National brands were now playing second fiddle to brainwashing via advertising.
the retailer’s brand. Conspiracies aside, brands can act as a powerful
Over time, this movement towards retailer solution to the ‘paradox of choice.’ In his 2004 book,
branding spread from advertising throughout the The Paradox of Choice, psychologist Barry Schweitzer
entire operation, from retailer-centric displays and discussed decision-making at the supermarket
clean-store policies to an increased emphasis on online shelves in terms of finding happiness through goal
stores, and ultimately, unto the products themselves. achievement. Possessing too many choices at the
This new generation of store brands has played a shelf could lead to consumer anxiety, and ultimately,
very different role from the lowest-cost positioning of dissatisfaction. By having a “favorite” or “preferred”
traditional private label offerings. go-to brand, consumers can automatically filter their
One approach to building a private label brand choices and thereby lessen the stress of shopping.
is illustrated by Target’s Choxie, which is positioned Brands transcend the purely rational decision-
as an upscale chocolate-candy brand without making process. While the new value equation
being explicitly sold as a Target store brand. When (product quality and shopping experience compared
launching Choxie, Target clearly calculated that the to price paid and effort required) will always be an
brand might have a greater chance of success without important consideration, we must never forget that
consumers necessarily being aware of its lineage. many decisions are made emotionally and subconsciously
Safeway took the opposite approach with its — in other words, in the realm where brands live.
successful “O” line of organic products. Featuring More than anything else, brands represent a
more than 300 certified organic products throughout promise between a company and a consumer. Brands
the store, the “O” line is obviously a Safeway brand ask for our loyalty and in return they promise to deliver
and is a natural outgrowth of its “Ingredients for both rational and emotional benefits. And as long as
Life” positioning. As a result of the brand’s success, brands honor their commitments and treat consumers
Safeway is now going to offer the “O” line through fairly, they’ll maintain our trust and our loyalty.
other retailers in non-competitive markets.
Trader Joe’s is probably the best example of five WinninG SolutionS
the power of store brands and private label. It is So how can national brands, now faced with
estimated that 70 percent of TJ’s sales are in private significant challenges from both surging private label
labels. Trader Joe shoppers appear not to discriminate brands as well as their traditional competitors, win
between national brands and TJ’s private label due to the consumer’s mind and the shopper’s cart? Here are
the trust and affection they have for Trader Joe’s. A five ideas:
few years ago it was quite chic to boast of buying TJ’s
1) Take a Stand
Charles Shaw line of wines. Sold for as low as $1.99 a
Make sure that consumers know what you
bottle, “Two Buck Chuck” became a badge of pride for
believe in. Tell them why you do the things you do.
smart, savvy shoppers.
28 THE HUB JULY/AUGUST 2009
W hat Happens Next?
Making predictions is always a dangerous game but label, will struggle to win and maintain consumer
since people seem to love them, I’ll happily oblige: loyalty.
n It’s a safe bet that consumers will continue to n The majority of consumers will switch back to
sample and switch to private label, primarily as a national brands after their confidence in the
money-saving measure, as long as the economy is economy returns unless private label brands make
faltering. a concerted effort to deepen their engagement
with consumers through two-way conversations,
n Positive experiences with private label will result
responding to feedback and criticism, delivering
in increasing loyalty towards those products and
innovation and forging an emotional connection —
further experimentation with private label in
in other words, by acting like a “real brand.”
n The Red Sox will bring home yet another World
n Innovation will be a key driver of success.
Series title to Boston, relying on pitching and
Complacent brands, whether national or private
defense to compensate for their lack of power.
As your brand essence represents your outward-facing to communicate directly with the shopper, so design
personality, your belief system represents your soul. it based on that assumption. Would a shopper
Everything about your company: culture, products, understand the core essence of your brand if they
communications, promotions, events, etc., should be a were exposed to nothing but the packaging? In an
manifestation of your corporate belief system. Believe era of clean-store policies, media fragmentation and
in something so that consumers can believe in you. general loss of control, the importance of design and
packaging can’t be underestimated. Packaging must
2) Make a Difference
succeed on multiple levels, conveying the rational
Bring those beliefs to life by demonstrating
attributes of your product while forging an emotional
sincere support for causes and charities that make
connection and standing out from the competition at
sense for your brand. Cause marketing should
be viewed as a form of brand building first and a
potential sales driver second. Consumers are smart; 5) Have a (Real) Conversation
they’ll quickly dismiss callous attempts to exploit There’s a big difference between talking at
charities for profit. Sincerity is demonstrated by each other and having a real conversation. Digital
imbuing support for the cause throughout every facet conversations require effort and investment, most
of your organization. Make it real so that consumers likely without a quantifiable ROI. Conversations
are proud to associate with your brand. about your brand are already happening online. (You
can search Twitter and the blogosphere if you want
3) Provide Great Content
to hear them.) You need to choose whether you’re
Give consumers a compelling reason to engage
going to ignore those conversations, listen to the legal
with your brand. Today’s consumer has endless
department and play it safe online, or demonstrate that
options to fill their time with content that informs,
you truly “get it.” This is the new face of customer
educates, entertains or inspires them. Why should
service and public relations, if you want it to be. n
they watch your ad, forward your video, read your
packaging or participate in your contest? Rejecting
brand communications is easy. Make it hard for them
to ignore you. When it comes to content, you’re not MITCH BLUM, vice president, strategy
just competing with other brands. You’re competing and planning at Marketing Drive,
provides strategic direction that helps
with television, movies, books, blogs and even the old
brands realize their full potential. He
fashioned bicycle ride.
can be reached at 617-368-6700 or
4) Perfect the Packaging email@example.com.
Packaging might just be your only opportunity
JULY/AUGUST 2009 THE HUB 29
WHI T E PAPER
By Mack Hoopes
HeNkel coNsuMer goods iNc.
t Henkel Consumer Goods, we have uncovered evidence that the demographic traits in
common usage by shopper marketers are not valid predictors of shopping behavior.
This insight is based on our research into value-seeking behavior that uncovered three
surprisingly distinct and enduring behavioral styles that defy characterization by income
level, age of household or size of household.
Our findings suggest an alternative basis for (EDLP) strategy as an assurance of value. Once inside
retailer marketing and merchandising that may an EDLP shopping environment, Shoptimizers may be
offer significant advantages. They challenge our likely to respond to in-store cues.
assumptions about the relative value of certain Mainstreeters do far less pre-planning and rarely
shopper segments. Importantly, they also offer an save coupons, so their channel choices are more likely
alternative and somewhat simpler way to be influenced by location, convenience and price
to determine store clusters. In short, reputation. Once inside the store, however, this group
Value-seeking the implications of these findings are is most likely to be sensitive to in-store promotions
profound and timely. and offers.
behaviors may Our study examined three years Carefrees avoid EDLP channels and bypass most
transcend of data from multiple retail channels, pre-planning and in-store promotions. Interestingly,
covering 300 food and non-food categories they totally trust club stores to deliver value appropriate
demographics, commonly carried in supermarkets. This
data was collected from the Information
to their consumption patterns. Once inside a store,
they tend to ignore prices and buy what they like.
says new Resources, Inc. Consumer Network Panel
and other sources.
Shoptimizers, the group that is vastly more likely
to exhibit “thrifty” pre-planning and coupon redemption
research. We found that each household
assembles a complex shopping solution
behavior and highest response to EDLP, also spend
most heavily on the 300 categories studied. In contrast,
from a series of discrete activities and trips Carefree Shoppers, who as a group virtually ignore all
to several retail outlets each week. These “assembled” forms of promotion, are the lightest spenders in those
shopping solutions — or shopping styles — may be categories across the retail channels studied.
understood in terms of three behavioral segments:
Shoptimizers are most likely to be influenced in retailer and Brand impliCationS
their choices by pre-shopping stimuli such as circulars Our findings go much deeper, to permit analysis
and coupons. They also are most likely among the by channel, retail banner, department and category.
three groups to regard a clear everyday low price These results carry numerous implications for managers
30 THE HUB JULY/AUGUST 2009
Planning Coupon and Promotion by Shopper Segment
Segment Pre-Planning Coupon Use Response to Response to
Behavior EDLP Strategy In-Store Promotions
Shoptimizer Very High Very High Very High Sensitive
Mainstreeter Very Low Low Average Highly Sensitive
Carefree None None Low Insensitive
s o u r c e : The Shoppers’ Perspective 2010, Henkel Consumer Goods, Inc.
at both retail and product marketing organizations. • Shopping Basket Size also varies among the
Among the major findings of interest to consumer behavioral groups, with Shoptimizers spending
product retail and marketing organizations: the smallest dollar amount on each occasion
and Carefrees spending the most. Shoptimizers,
• Coupon Use is almost entirely confined to
however, due to their trip frequency spend the most
Shoptimizers, who make up about 25 percent of
per year, +16 percent versus Mainstream, and +32
households and 30 percent of household spending.
percent versus Carefree.
Coupons are seldom used by Mainstreeters and
virtually never by Carefrees. • In-Store Promotions are primarily effective at
influencing Mainstreeters, who make up 44 percent
• Private Label products are purchased more
of households and dollar sales. In-store promotions
frequently (higher dollar-sales index) by
have relatively little influence on the purchase
Shoptimizers and less frequently (lower dollar-
decisions of Carefrees.
sales index) by Carefrees. Mainstreeters purchase
store brands at about average levels. Further study of our behavioral segments strongly
suggests that channel choice may be the first branch
• Trip Frequency varies significantly among the
in the shopper’s decision tree, since each shopper
behavioral groups, with Shoptimizers visiting
assembles a personal pantry solution from visits to
stores about four times per week, compared with
a combination of retail outlets. Selection of a trusted
two-and-a-half times per week for Mainstreeters
EDLP channel may be the first planning decision made
and twice a week for Carefrees.
by many shoppers.
Share of Households and Total Dollar Spending
Segment Share of HH Share of $ Index
Shoptimizer 25% 30% 121
Mainstreeter 44% 44% 100
Carefree 31% 26% 84
s o u r c e : The Shoppers’ Perspective 2010, Henkel Consumer Goods, Inc.
JULY/AUGUST 2009 THE HUB 31
Class of Trade by Shopper Segment
Shoptimizer Mainstreeter Carefree
All Outlets 30% 44% 26%
Grocery 31% 43% 26%
Drug 38% 40% 21%
Mass 30% 47% 24%
Supercenter 34% 51% 15%
Club 17% 40% 42%
Dollar 33% 47% 19%
s o u r c e : The Shoppers’ Perspective 2010, Henkel Consumer Goods, Inc.
Channel choice data reveals behavioral patterns stores, or geographies will return much stronger
among the three segments which may be partially payback than others when aligned against the
influenced by banner price reputation, feature ads, or product’s behavioral target. For example, our findings
both. Carefrees account for the largest percentage of suggest some retailers may unwisely label highly-
Club store dollar spending (42 percent dollar-share); motivated Shoptimizers as less desirable because they
Mainstreeters spend the largest share in supercenters take greater advantage of deals and coupons. In fact,
(51 percent dollar-share); and Shoptimizers spend these shoppers index higher on total spending.
lightly at Clubs (17 percent dollar-share), but rely The various influencing tools of shopper
more heavily on drug stores (38 percent dollar-share) marketing, Henkel’s “Shoppers’ Perspective” study
and supercenters (34 percent dollar-share) to fulfill finds, may influence these three groups of shoppers
household needs. differently according to their innate propensities for
Members of each group select shopping channels list-making and planning ahead, coupon use, in-store
based on their trust that the channel will deliver promotional sensitivity, purchase frequency, response
what they value in a shopping trip. With this to EDLP marketing programs, and private label
analysis, Henkel believes we have identified some purchasing habits.
foundational aspects of pre-planning, and reinforced It suggests that shopper-marketing tactics should
a fundamental truth for all shoppers — if they trust be selected according to which shopping style is being
you they shop you. targeted. Coupons, for example, will have little to no
influence on Carefree shoppers, regardless of the depth
manaGerial opportunitieS of the price incentive. In-store promotions like displays
Our study reveals fresh insights and managerial will have greatest influence on Mainstreeters, while
opportunities for both retailers and brand marketers. Shoptimizers are more likely to arrive at the store pre-
For most retailers, it will be unrealistic to influenced by an offer seen in an ad circular, with a
focus against all three behavioral groups. Retailers coupon in hand.
will need to formulate a strategic position for each Style, it seems, has real substance when it comes
banner that communicates what it stands for in the to understanding how shoppers plan trips and respond
marketplace, and choose tactics that communicate to promotion. In the coming months, we’ll have more
value to the targeted behavioral groups. This must be insights to reveal from this research. We look forward
done by department, category and brand. to sharing it. n
For brand marketers, our analysis offers an
alternative and somewhat simpler way to determine
store clusters, based on the enduring behavioral
MACK HOOPES is manager, shopper
complexes of the three groups. In addition, because insights for Henkel Consumer Goods
the three segments respond very differently to Inc. Copies of The Shoppers’ Perspective
common forms of shopper-marketing messaging and 2010 may be obtained from Henkel
promotions, marketers should select tactics carefully. Consumer Goods upon request or by
For both retailers and brand marketers, our visiting henkelna.com/shopperinsights.
segmentation implies that some targeted channels,
32 THE HUB JULY/AUGUST 2009
C A SE S T UDY
is a “must-see” for any organization contemplating a
By Britt dioNNe
l a N d o r a s s o c i at e s
SCriptinG the neW netapp Brand
ovie plots typically follow a Founded in 1992, NetApp had already
standard arc-of-change: back-story, surmounted a major hurdle by 2005: breaking the
conflict, and dénouement. Most of $1 billion revenue mark. But that accomplishment
the time we can guess where the hero was just a prequel to the much bolder plans NetApp
will ultimately arrive. What we really would undertake over the course of the next few
want to know is how they’ll succeed in getting there. years. By 2007, it was a $3 billion company with plans
Do they recruit a plucky sidekick? Starve out the to keep growing and claim the number two market
enemy or charge the castle gates? In other words: share slot, behind industry giant EMC. To achieve
What are the success factors that lead the hero to a those goals, NetApp needed to broaden its position
Managing a branding program can feel like a
cinematic drama of sorts, complete with plot twists
and a bevy of characters who each have their own
agendas. A happy ending — in the form of a successful look into the making of
brand implementation — is certainly not a given.
In fact, many branding programs meet an untimely NetApp’s global brand.
end because internal challenges, such as funding,
skepticism, and resistance to change, are not addressed
early in the process. To make matters worse, success within the marketplace. Third-party qualitative and
factors like internal education and evangelism are too quantitative research indicated that the company’s
often assigned bit parts instead of starring roles. existing customers were loyal and passionate NetApp
Despite the potential hurdles, countless advocates. However, among the general marketplace
organizations do successfully manage a branding there was a lack of awareness of the NetApp brand
initiative through to full implementation. But a select and the company’s capabilities.
few do it exceptionally — avoiding much of the clichéd Co-founder Dave Hitz, who wrote a NetApp
drama along the way. Storage and data management “Future History” paper to envision the company’s
company NetApp did just that in 2008, when it launched next steps, recognized that growing its customer
a comprehensive branding program intended to achieve base would require more than just continued
broader and deeper awareness in the marketplace. product innovation. In fact, he identified “a better
NetApp’s success demonstrates that the branding understanding of NetApp today” as the goal second
programs most likely to reach a happy ending are only to achieving the next revenue milestone.
those that both anticipate internal obstacles and Importantly, he also included “increased brand
identify success factors way before the opening title awareness” as one of five strategic themes designed
sequence starts to roll. That is why NetApp’s story to support continued company growth. To help
JULY/AUGUST 2009 THE HUB 33
A Gateway to Opport unit ies
etApp was ready to grow its market share and the conversation from technology (simplifying data
expand its presence globally from a niche management) to business (achievement and unlimited
storage player to a strategic IT partner. opportunities).
Simultaneously, the company wanted to develop a
We developed a comprehensive approach by (1)
brand platform that would help to better communicate
identifying the opportunity to target two critical
its relevant differentiation within the market.
audiences; (2) developing a new strategy demonstrated
Moreover, the brand messages needed to speak to a through verbal and visual expressions; and (3) creating
critical new audience — strategic decision makers and an experience for customers that is integrated and
influencers — while remaining relevant to the core multi-channel.
technical audience. Having grown rapidly through both
Over the course of a year, we developed an extensive
organic growth and acquisition, preserving the brand’s
visual and verbal brand that included a new identity,
existing core equities — superior technology innovation
name, messaging, architecture, nomenclature, tone of
and a customer-centric, “get things done” culture —
voice, and tagline — Go further, faster.
emerged as another critical brand challenge. NetApp
aspired to be more, but wanted to remain true to the The new “gateway” identity reflects NetApp’s bold
values that had initially made it successful. commitment to innovation and lets customers, partners,
and employees see new possibilities for their futures.
Through qualitative research with current and
Capturing the essence of the Arc de Triomphe, the
prospective clients and partners, we were able to
mark is a blue gateway signaling both NetApp’s portal
map the NetApp customer experience across various
to new opportunities for customers and, when cropped,
touchpoints to identify where the brand had the
a platform to launch beyond barriers.
greatest opportunity to grow its business.
The supporting visual identity system includes design
The key insight indicated that the brand needed
elements that emphasize the company’s long tradition
to evolve in order to communicate the company’s
of enabling breakthroughs and creating outstanding
uncompromising commitment to quality, its high level
of innovation, its tradition of collaboration, and its
results-driven employee culture. This was a significant Informed by a new brand architecture and nomenclature,
shift away from the existing brand communications we established a brand voice and created comprehensive
approach, which—while successful—focused on brand guidelines and training. Employees have already
product attributes. embraced the new NetApp brand, which is now poised
to help the company nurture its existing relationships
As a result of the research, NetApp partnered with us
while forging important new strategies that can take
on an extensive rebranding program aimed at elevating
the business to the next level.
evolve NetApp to a top player in the storage and data NetApp. The brand launched internally on March
management category, the company committed to 3 and externally at NetApp Analyst Day, March 11,
a major brand initiative, the likes of which it had 2008. A happy ending was had by all.
never undertaken. Simple, right? Wrong. The corporate marketing
Tasked with leading the charge, NetApp’s team worked diligently and deliberately over a
corporate marketing team identified key stakeholders 14-month period to gain support for the branding
with cross-functional expertise who could contribute initiative and steer it through the organization. This
to the development of the new brand strategy. was not an easy task given NetApp’s engineering
Top branding agency experts were retained. culture.
Internal teams were identified. Strategy was
developed. New audiences were studied. Messages f o u r S u C C e S S fa C t o r S
were retooled. A brand platform was created and This critical process of securing internal buy-in
translated into visual and verbal expressions of is where many organizations struggle, often because
34 THE HUB JULY/AUGUST 2009
they simply did not anticipate and plan for it. Here’s 4. Education and communication. The single-
what NetApp did right and why its approach serves as most important factor in securing company buy-in for
a best-practice case for the internal management of a a branding program is often education. Fortunately,
branding program. the corporate marketing team started by educating
1. Vision. Guided by Hitz’s “Future History” itself before approaching senior management. That
paper, the corporate marketing team knew where meant commissioning third-party research and
NetApp needed to go and who it needed to beat to allowing the findings to guide the scope of the
transcend its current position in the marketplace. That branding program.
clarity of vision kept the brand strategy development The results indicated that NetApp had two
process on track and facilitated decision-making. immediate tasks: expand its target audience to now
Moreover, the team was guided by an understanding include strategic management as well as technical
that the branding initiative’s success depended staff, and re-craft its verbal and visual expression
on their ability to communicate the link between so it could connect with both audiences. With these
NetApp’s brand strategy and its growth objectives. two goals identified, the corporate marketing team
2. A strong team. Even before any internal remained focused on the important first phase of the
conversations about the brand initiative took program: research and strategy development.
place, the corporate marketing team was given a Conversations about the name and identity
challenge to build a robust marketing strategy. This were not broached until later in the process. Rather,
changed the relationship between marketing and the corporate marketing team made it a priority to
sales in significant and positive ways. Marketing educate the executive team by sharing with them the
took on a more proactive role that went beyond just brand awareness and customer experience insights.
providing the sales team with collateral — they were Ultimately, those research findings played a
increasing the level of interest, delivering actual sales significant role in catalyzing the executive team and
opportunities, and impacting pipeline within the field. helping them understand how branding could help
Empowered in this way, the corporate marketing transform the business. Through continuous training,
team was poised to lead the brand initiative when communications and evangelism, the corporate
the time was right. Additionally, once the branding marketing team got the company on board.
program commenced, it was appropriately staffed NetApp’s branding initiative success story is not
by a brand task force of more than 25 key internal new, and neither are the internal obstacles that came
stakeholders. This inclusive, cross-functional group with it. What makes the NetApp story compelling
was involved early in the process and represented — what makes it a blockbuster hit instead of a
marketing, sales, business units, HR, IT, workplace B-movie — is the approach the corporate marketing
resources, and more. team took to steer the branding program through the
3. Patience and persistence. The team was organization. They anticipated. They were deliberate.
wise to keep in mind that creating a brand is not They were proactive.
like flipping a switch, in part because so many And NetApp’s happy ending did not actually end
internal stakeholders are involved. The most critical when the new brand was unveiled on Analyst Day.
stakeholder set is often senior leadership, which After all, tangible business results are the only good
can make or break a branding program, so securing reason any organization would undertake a branding
their support is essential to success. The team had program — and that kind of ROI takes time to manifest
to anticipate and proactively address a number itself. But the NetApp of today is far better equipped
of internal objections, from budget issues and to raise its brand awareness and to achieve its revenue
attachment to the original Network Appliance brand, goals. Which is to say: Stay tuned for a killer sequel. n
to skepticism around the value of brand building.
To overcome these potential obstacles, the team
struck a shifting balance between patience and
persistence. They approached the branding program BRITT DIONNE is senior marketing
communications manager in the San
as a (long) journey rather than a destination. They
Francisco office of Landor Associates.
also thought in terms of how they could make it easy
Britt can be reached at 415-365-3830
for the executive team to join the ride. One-on-one or at firstname.lastname@example.org.
meetings and strategic alliance building secured
brand buy-in well in advance of major decision points.
JULY/AUGUST 2009 THE HUB 35
WHI T E PAPER
By cHris Hoyt consider themselves to be ... But I do think marketing
has a seat at the table. This company has a strong
Hoy t & c oMpa N y l l c
merchant and operations culture, and now we’ve added
this third leg of the stool.”
ave you gotten a hug from a consumer
This is why retailers ought to be seriously concerned
lately? That’s what happened to Walmart
with the major push afoot in certain quarters of the
U.S. chief executive officer, Eduardo
industry to kick out this third leg of the stool before
Castro-Wright, from an elderly woman in
it can really take hold. Both the FMI (Food Marketing
Fairfax, Virginia, as he, clearly looking like Walmart
Institute) and newly-formed “Retail Commission on
management in his suit, entered the store.
Shopper Marketing” (sponsored by Coca-Cola N.A.)
Along with the hug, she told him, “I want to
are championing the idea that shopper marketing
thank Walmart for helping me survive these times.”
should be integrated into the traditional best-practice,
While it’s not usually so physical, most people would
eight-step category management process and rebadged
agree that connecting with the consumer at an
as “Shopper and Category Development.”
emotional level is what marketing is all about.
This new version of shopper marketing is defined
as, “A distributor-supplier process of managing
Shopper marketing must categories as strategic business units, producing
enhanced business results by focusing on delivering
not be subordinated to
consumer/shopper value.” As many will recognize, this
is exactly the same definition of category management
introduced 20 years ago, only with the addition of the
category management. word “shopper” at the end of the sentence.
The other difference is that even though category
management will now attempt to incorporate the many
Traditionally, retail has focused on merchandising different and varied facets of shopper marketing, the
rather than marketing — a one-size-fits-all approach traditional eight-step category-management development
where ‘stack it high and watch it fly’ ruled the roost. process will be “simplified” and reduced to five
But a rapidly growing number of retailers including steps: 1) Insight Generation; 2) Strategic and Tactical
Kroger, Safeway and Best Buy — as well as many Planning; 3) Initiative Development; 4) Plan Launch
regional retailers — are developing the marketing side and 5) Plan Review.
of their business and are reaping the rewards on their “Retailers have to see how a [shopper-marketing]
bottom lines. initiative proposed by a product manufacturer connects
Make no mistake, marketing is not in control at into the standard operating procedures they use in
these retailers. As Walmart’s chief marketing officer category management, merchandising and, in particular,
Steve Quinn acknowledges last month in Advertising store operations” says a spokesman for this movement.
Age, “Certainly it’s not a marketing-led company in “There is a lot of historical precedent that says this is
the way a lot of packaged-goods companies would the way to go.”
36 THE HUB JULY/AUGUST 2009
Authorizations By Department (2004)
Albertsons Kroger Safeway
Dept. Average Weekly Items
Bakery 753 775 774
Dairy 2,240 2,142 2,238
Deli 764 764 736
Edible 13,817 13,770 13,656
Frozen 2,681 2,739 2,719
General Merch 1,117 1,251 1,227
In other words, let’s Based on “a lot of
fold this “marketing HBC 3,998 4,108 4,188 historical precedent,”
stuff” into business- this is exactly
Non-Edible 3,214 3,294 3,155
as-usual category what we fear might
management. Totals 28,584 28, 843 28, 693 happen if retailers
For the uninitiated, allow their shopper-
category management marketing programs
s o u r c e : IRI CRMA Scan Data, 2004
has evolved into a to be subordinated
predominantly supply- to a category-based
side methodology to deliver efficiency — the right approach. If you think this is a bit strong, check out
product at the right place at the right time — although Table I, which details the difference in assortment and
it was originally positioned as a solution to improve distribution after 20 years of process-driven category
retailers’ demand-side issues as well. management in Kroger versus Safeway versus Albertsons
There is no question that category management in 2004, before shopper marketing got started. As you
has provided enormous benefits to retailers on the can see, the largest difference in total SKUs carried by
supply-side of their businesses in terms of helping to each of these retailers is less than one percent — on a
align inventories with shelf demand and facilitating base of approximately 28,500 items. In other words, the
enlightened data-based distribution and assortment process worked perfectly. Everybody did it exactly the
decisions. same way with exactly the same results for everybody
On the demand side, however, category management — complete uniformity and zero differentiation.
has not met expectations in terms of strategic benefits — How well might this work with shopper marketing?
defined as enabling retailers to achieve meaningful Let’s take a look.
non-price differentiation through proactively addressing Shopper marketing was “officially” introduced to
targeted shopper needs or through facilitating the retailers at the FMI about five years ago in a presentation
development of relevant marketing platforms that cut entitled, “The World According to Shoppers” (ironically,
across all categories and help establish one’s position also sponsored by Coke). Many quickly grasped the
in the marketplace. potential of this and willingly invested the time and
Achieving this type of differentiation has been the financial resources to grow their marketing capabilities
Holy Grail for most retailers, especially supermarkets and begin to understand the needs and wants of their
in their struggles to compete against Walmart and particular shoppers. To this end, many did the research
other value discounters. In fact, what 20 years of to segment their shoppers along demographic,
process-driven category management has done psychographic and behavioral lines — with emphasis
is have the opposite effect — to the extent where on their Most Valuable Customers (MVCs).
virtually all categories in most food retailers are now The objective was to provide their suppliers
characterized by an eerie sameness that provides with a choice of pre-defined shopper segments that
shoppers with little or no incentive to choose one suppliers could use to identify a “mutual shopper”
store over another on any basis other than price. and then target this segment, as appropriate, in
JULY/AUGUST 2009 THE HUB 37
Shopper Marketing Along the Path-to-Purchase
p r e -s t o r e i N -s t o r e at-s H e l f
Provide relevant Identify and
Capitalize on solutions to overcome
PREDISPOSITION SHOPPER’S PURCHASE marketing &
TO BUY NEEDS BARRIERS sales resources to
l e v e r a g e B r a N d e q u i t i e s THE POS
s o u r c e : Hoyt & Company, LLC
developing brand or portfolio-specific messaging and practice view of the principal components of shopper
other shopper-based initiatives. marketing along the shopper’s path to purchase. As
The key to making this work for all parties is you can see, there are many moving parts to current
informed collaboration — wherein both parties do their best-practice shopper marketing which each may
homework — as opposed to the category-management involve a different discipline or function across one’s
model wherein retailers pushed the entire burden of organization.
data acquisition, analyses, insights development and Where category management comes into play
program recommendations onto their suppliers. is at the end of this path — at the shelf — where its
Significantly, because best-practice suppliers have responsibility is to make it easy for shoppers to find
identified shopper marketing as primarily a marketing and buy the products they want and need. Most all
opportunity, they assigned this responsibility to their of the other functions along this path — with the
brand-marketing executives, not to their category- possible exception of overcoming certain types of
management executives. Similarly, the principal point purchase barriers — are responsibilities that category-
of contact for shopper-marketing collaboration in management executives on either side of the table are
leading retailers shifted from the retailers’ category- neither trained nor resourced to address.
management/merchandising departments to the Faced with the prospect of two powerful
retailers’ marketing departments. industry-sanctioned bodies coming out with identical
This is not to say that category management is recommendations that this is the way to go, however,
not an important component of shopper marketing but we would offer the following observations directed
that’s all it is — one component of it — and certainly principally to the retail community:
not the driver or springboard from which to plan and
execute the myriad number of strategic initiatives that 1. Shopper marketing as a marketing function
today make-up the whole of what shopper marketing is already in place and working successfully.
encompasses — for both retailers and suppliers. Best-practice retailers are making their stores the
To illustrate this, we would refer you to Table II, “store of choice’” through marketing. Walmart beefed
which encapsulates and consolidates a current best- up its marketing department from a handful of senior
38 THE HUB JULY/AUGUST 2009
executives in 2004 to more than 200 people today, doing a better job with current customers rather than
with a budget of more than $1 billion. attempting to get new customers. If you allow shopper
Then, recognizing that it did not have the in- marketing to devolve to a relatively narrow category-
house personnel to head this group, Walmart brought driven exercise, you will run the risk of severely
in Steve Quinn from Frito-Lay to be its chief marketing curtailing this opportunity.
officer and staffed many of its key marketing and
merchandising positions with CPG manufacturer- 4. The focus of shopper marketing should be on
trained marketing people. shoppers, not categories.
The result — as reported by Advertising Age on For 20 years, category management, whether
June 8 — a 3.8 percent increase in U.S. Sales for Q1 intended or not, has been an exercise in supply-side
this year, of which 95 percent came from same store efficiency — not demand-side effectiveness. It has
sales. To what does Walmart attribute this success? been process-driven rather than creative. Category
“Segmentation, market research and advertising,” says managers are experts at product movement but few
Quinn. Category management is nowhere mentioned would claim expertise in understanding shopper
in this article. motivations that do not pertain to their particular
Walmart is not alone. Safeway achieved a 4.3 categories.
percent increase in sales in 2008 — increasing for the Category managers are judged on short-term lift
third year in a row. Kroger delivered a whopping 8.2 and category share gain, not total-store gains. Category
percent increase in 2008 — with a 5.0 percent increase managers are responsible only for their category —
in same-store sales excluding fuel. rarely asked to grow other categories — and have
a habit of turf-protecting, making cross category
2. Your store is (or can be) more than the sum marketing or merchandising an extremely difficult
of its categories. proposition.
The assumption that making all of the categories Finally, most of the category managers we know
in the store relevant to your shoppers will translate have enough on their plates already. Certainly,
into making the store relevant in total is a common category managers need to understand the dynamics
misconception. Your store is a brand and it needs of their categories from their shoppers’ perspective,
to stand for something. It needs to deliver a single- but to think that one could add a strategy as complex
overarching message about who you are that is based and unfamiliar as shopper marketing to their already
on an in-depth understanding of your particular overburdened agendas is simply wishful thinking.
shopper’s want and needs. Consequently, your Obviously, we do not think that attempting to
message needs to be shopper-specific, not category- integrate shopper marketing into a category-based
specific. Categories should be aligned to reinforce this framework is good for retailers, their suppliers or the
image but not used to create it. industry in general. It risks setting back the industry
10-15 years and belies what shopper marketing
3. You want your most valuable shoppers to is all about.
shop the store — not individual categories. It plays directly into those who want to shortcut
As retailers began to understand their Most the process and “do it the easy way” by using existing
Valuable Customers better, they discovered that an personnel and changing titles — yet expecting different
average retailer captures only about 25 percent of results! It is, in net, the equivalent of putting a fighter
their MVC’s CPG dollar. This presents an obviously pilot into a foxhole. n
important strategic opportunity because MVCs
already have a preference for your store, buy more in
your store and — since they are less likely to cherry- CHRIS HOYT is president of Hoyt
& Company, a Scottsdale, Arizona-
pick — are more profitable.
based marketing/sales consulting and
Leading shopper-marketing retailers have training organization that specializes
therefore made it a prime objective to increase the in shopper marketing. Chris may
number of categories that a MVC shops, thereby be reached at (480) 513-0547 or
increasing transaction size and/or trip frequency. In at email@example.com.
other words, the focus among these retailers is on
JULY/AUGUST 2009 THE HUB 39
WHI T E PAPER
hink about the last time you tried to meet with what’s relevant to her at every given moment,
restaurant. From within the crowd, you look
up with a friend in a favorite, popular and especially at the moment she’s deciding whether
to buy your brand.
for what makes that person special. It’s time we put more energy behind making sure
You might look for her curly hair, try to remember the shopping experience is an indelible part of the
what jacket she often wears or glance towards the brand experience.
table where she usually sits. You might even listen for Experiential branding is primarily built upon
her voice in the hope that she recognizes you first and three principles:
calls your name. Certainly, the more you know about 1. Understand your brand’s past greatness to
her, the easier she is to spot. Seems obvious enough. capture its true voice. It’s been said that you can see
The same is true for the “sea of sameness” that the future by looking into the eyes of the past. The
strikes a person at retail who is looking for a specific same is true for branding. Never underestimate the
brand. She looks for the undeniable signs of that brand, importance of digging into a brand’s genealogy to
which in most cases is limited to packaging, a little create an ownable voice for the future.
merchandising and perhaps a familiar location. Understanding where the brand came from, what
in its history made it unique and what it still prides
itself on today can provide invaluable information.
Where would great Apple’s translation of its brand experience to retail
is easily the best example of how this can work. Lots of
brands be without marketers talk about Apple, but few have truly followed
its lead, especially the experience it creates at retail.
the shoppers Apple didn’t just hang a shingle and start selling
its products. It created a holistic retail environment
that built upon the brand’s long history of creating
who buy them? user-friendly products with cool styling. Perhaps
most significantly, its Genius Bar is there to help its
customers, often in moments of crisis.
There are certainly not many opportunities to stand 2. Diagnose your brand’s current health
out. So, we would argue that great branding is more and make its differentiation relevant in today’s
important than ever in today’s retail environment and environment. Differentiation is often called “the
that experiential branding — branding that you can engine of the brand train.” It is the source of a brand’s
feel with your senses — is the future. competitive advantage. The challenge is to keep that
connects emotionally with the consumer and the
Experiential branding is the future because it difference relevant to consumers in the present situation.
Amstel Light offers a great example of how this
shopper at relevant moments in their lives. The result can be done. As the “beer drinker’s light beer,” the
is increased demand, and growing sales. position clearly captured the brands “great light beer
We need to evolve our definition of the brand’s taste” until beer sales flattened due to growing wines
identity to include the shopper’s identity — the shopper’s and white spirits.
life — and make sure that the brand is fully aligned Repositioning the beer as “the wine drinker’s
40 THE HUB JULY/AUGUST 2009
Determine ideal experience and how
to translate to plan-o-grams
Identify target shoppers along the path to purchase
s o u r c e : TracyLocke
beer” leveraged its great taste to a whole new, growing navigation, or wayfinding. Then you determine what
market. It also offered a new experience that changed the ideal experience is, and how to translate that to a
possible media choices from traditional advertising planogram — from 30 feet, 10 feet, and three feet.
in Sports Illustrated to being with the “in” crowd at At 30 feet, you’ve got to influence what shoppers
experiential happenings such as Fashion Week. see, at 10 feet it’s what they feel and three feet you’ve
3. Create your brand’s experience for the got to understand how she thinks and appeal to
future in a way that can be maximized at retail. that. While this does mean considering pricing and
intuitive hierarchies based on what shoppers need at
Understanding what business the brand is really adjacencies, it also means developing simple, sensory,
in is the key to expressing an idea that people can
experience. This has never been more important for that moment, and how they are thinking.
Williams Sonoma, which, like a lot of other retailers It’s no longer enough to limit the brand experience
finds itself in an extremely challenging situation. to the product itself. You need to ensure that your
But rather than succumb to traditional retail tactics brand is relevant to shoppers, too. If what you’ve
like price promotions or stacking it high and hoping it created engages shoppers with all five senses, holds
will fly, this retailer decided to embrace its shoppers their attention long enough to convert them, then you
And if you are branding experientially, you are
with all five senses and remind shoppers that Williams are branding experientially.
Sonoma isn’t just a store, it’s a place for cooks.
Their “Taste the Best of Summer” campaign growing sales. n
involves cooking demonstrations, sampling programs
with special summertime food, drinks and ideas that
celebrate the things everybody loves about summer. AL WITTEMEN is managing director of
Most important, Williams Sonoma is taking a long- retail strategy for TracyLocke. He has
35 years of experience in marketing,
term view at a time when short-term pressures are
sales and shopper marketing of
incredibly intense. consumer packaged goods. Al can
So, how do these principles of experiential be reached at (214) 259-3531 or
branding apply to your brand, in your situation? It’s firstname.lastname@example.org.
a relatively simple matter of helping shoppers think
about, consider, and choose items by reframing MARTA L aROCK is evp, director of
categories, departments, products and benefits. strategic planning at TracyLocke,
view through a Maslow-like hierarchy of needs (see
working with PepsiCo, Golden Corral,
We’ve found it’s helpful to take the shopper’s
MasterCard and others. Previously, she
was with Publicis New York, D’Arcy and
above). The concept is to begin at the bottom of the Young & Rubicam. Marta can be reached
triangle and understand shoppers along their path to at email@example.com.
purchase. Based on that, you determine the optimal
JULY/AUGUST 2009 THE HUB 41
COOL BOOK S
Becoming Bucky Fuller Pedaling Revolution advocates for this trend,
suggesting that “cycling promotion can raise
Loretta Lorance tries to revise Buckminster Fuller’s
society’s level of general fitness, since people
reputation in her new book, Becoming Bucky Fuller,
exercise more when it seems less like exercise and
reports Michael J. Lewis in a Wall Street Journal
more like something mostly enjoyable that also
review (5/5/09). By Loretta’s account, Bucky should
performs a function, like getting to work.”
be remembered as a “failed entrepreneur” rather
than a “bold visionary.” This fledgling biking movement has been re-branded
as “active transportation,” in an effort to “come off
She bases her premise on Bucky’s failure to realize
as non-threatening to your average couch-bound
his vision of Dymaxion House, “a six-sided living
American while carrying a nice touch of gravitas as
platform impaled on a central mast and hoisted into
well,” Jeff writes.
the air.” Bucky’s vision was that this house could
be mass-produced like the Model A, but that didn’t Achieving this means creating more “greenways,
work out. safer bike lanes, pedestrian zones and bike parking
places.” However, as NYC transportation chief
Loretta digs into “the core mythology of Fuller’s
Janette Sadik-Kahn recently noted, perhaps also
long guru status.” She does so by scrutinizing the
“more economically competitive as well, as more of
“exhaustive scrapbooks” Bucky kept, which has
them become places where people with ideas and
since “served as the basis of all later scholarship.”
creative ambitions want to both live and work.”
She suggests that these scrapbooks were “something
of a fiction, contrived by Fuller to conceal discreditable
episodes and polish his credentials as a visionary.” Che’s Afterlife
However, says Michael, Loretta’s portrait ultimately “It is a book about how ideas travel and mutate in
is “not terribly different from the one we have this age of globalization, how concepts of political
always had before us — a vivid example of the ideology have increasingly come to be trumped by
inventor/salesman/messiah type that America seems notions of commerce,” writes Michiko Kakutani
to produce every generation or so.” in a New York Times review of Che’s Afterlife, by
Specifically, Che’s Afterlife is a book about how a
Pedaling Revolution famous photo of Che Guevara became a brand icon
When more women start riding bicycles to work — “as recognizable as the Nike swoosh or McDonald’s
that’s when the idea that bikes can replace cars in golden arches” (maybe even Brand Obama).
American cities will finally take hold, suggests Jeff
The original picture was taken at a 1960 funeral by a
Mapes in his new book, Pedaling Revolution, as
Cuban photographer known as Korda. It languished
reviewed by David Byrne in the New York Times
in obscurity until “Fidel Castro began using the
image as a branding symbol for Cuba in 1967,
David Byrne agrees: “I can ride till my legs are months before Che’s death.”
sore and it won’t make riding any cooler, but when
These days, the icon is used to sell everything from
attractive women are seen sitting upright going
air fresheners to snowboards; there’s even Cherry
about their city business on bikes day and night, the
Guevara ice cream (“The revolutionary struggle of
crowds will surely follow.”
the cherries was squashed as they were trapped
David, himself, says he’s been using a bike as his between two layers of chocolate. May their memory
“principal means of transport” around New York live on in your mouth!”).
City for 30 years now.
Well, after all, Che, himself, said that “the
Where once he shared the roadways mainly with revolutionary idea should be diffused by means
“reckless messengers” and “some food delivery of appropriate media to the greatest depth
guys” he says he’s “watched the streets fill over the possible.” And, as Michael Casey notes, Che is
years with more and varied bike riders.” “the quintessential postmodern icon” that means
“anything to anyone and everything to everyone.”
42 THE HUB JULY/AUGUST 2009
Where are you on your
journey to becoming
a visionary marketer?
Traditional marketers live in a short-term world where immediate The Shift is a great "how-to" book for Visionary
results outweigh long-term brand building. They are often limited Marketers who want to stand out, help their
company succeed by moving towards true
to running agency relationships and enabling the sales force, and accountability and drive a business strategy that
are constantly being squeezed for funds they do not have. But keeps the customer in mind, while never losing
the days of marketing strategies and business strategies being sight of the P&L.
created separate and apart from one another are coming to an Fisk Johnson, Ph.D.
Chairman and CEO
end. The best marketers are now creating integrated perspectives SC Johnson
that start with the growth aspirations of the entire organization.
In The Shift, Scott M. Davis, author of Brand Asset Management Forget the CMO. Long live the integrated agenda
and co-author of Building the Brand-Driven Business, outlines of the Chief Growth and Visionary Ofﬁcer!
how marketers can take action to engage more effectively with Joseph V. Tripodi
Chief Marketing & Commercial Ofﬁcer
the executive team and ultimately ensure that they take a The Coca Cola Company
leadership role when it comes to the overall growth strategy.
At Zappos.com, we've always approached
business in our own unique way. The Shift
outlines many principles we holistically
embrace. Kudos to Scott Davis for putting
together such a great resource!
Visit: www.prophet.com/shift CEO
Available Wherever Books Are Sold Zappos.com
Seems everyone is talking
about shopper marketing.
But who is really doing it?
RPM Connect has the best people and the best tools to drive strategic
Concept Connect SM
Our ideation process to create concepts that
make sense for your brands, your customers
and your target shoppers.
Retail Connect SM
Our network of key account experts that know
your customers’ strategies and shoppers.
Storehouse Connect SM
Our system for tracking what’s in market
in your category and at your customers.
It’s that approach that helped us be #2 on the HUB Top 12 for 2009.
Talk to us…
Call Joe Robinson—612.397.5623
minneapolis, MN | pleasanton, CA | cincinnati, OH | lakeland, FL | bentonville, AR | dallas, TX
10 South Fifth Street, Suite 330, Minneapolis, MN 55402 | 612.204.9790 | rpmconnect.com
check out our blog: connect.rpmconnect.com
RPM Connect, Inc. is a wholly owned subsidiary of D.L. Ryan Companies Ltd.