We’ve never been big fans of BK’s recent advertising, so we read with interest Jeremy Mullman’s and Emily Bryson York’s piece in this week’s AdAge, “What Crispin’s Lauded BK Work Doesn’t Do: Gain Ground On McD’s."
“In five years,” write Mullman and Bryson York, “Crispin’s creativity had energized a once-moribund brand with memorable, often groundbreaking work that helped BK recapture the No. 2 spot among burger chains briefly ceded to Wendy’s.” We know that’s the conventional wisdom. We’d certainly agree the BK’s cool, sometimes subversive advertising has gotten quite a bit of attention. It wasn’t always positive attention, but no doubt it was at least attention.
But just to throw a monkey wrench into the works here, let’s just remember that Wendy’s began a downward spiral not too long after Dave Thomas passed away. Its troubles grew as franchisee groups railed against company management and many of their decisions, particularly those related to advertising.
One campaign followed another and some—we’re thinking specifically of all those spots where different people wore a pig-tailed red wig—even managed to outdo the creepy weirdness of BK’s signature “King” spots. Triarc bought Wendy’s last year. With Wendy’s business in a shambles, BK could have just as easily recaptured the No. 2 (out of 3, mind you) spot by default.
But that’s just conjecture on our part.
The big knock against BK’s advertising is that in spite of all the accolades, the chain has actually LOST ground against it’s arched rival McDonald’s. BK’s share of the burger-chain market fell to 14.2% from 15.6% from 2003 to 2008. McD’s sales have grown 6.4% compared to BK's 2.9%.
Yes, McD’s has a whole lot more restaurants than BK and, according to AdAge, “counters that, if one factors out store closings and openings since then, it would have grown its share of the burger market .8%. But even by that measure, it is further behind McDonald’s, which gained three full share points during the same interval.”
Three things stuck out to us in the article.
One, there’s BK’s target market of choice. We’re not sure what role Crispin played in shaping the strategy of going after fast food super fans, “young men who theoretically care more about how ‘Meat’Normous’ a burger is than how much it costs.” We’d like to see the facts and figures that back-up that notion. Our experience is that the heavy users in a category tend to be price sensitive and deal prone.
Next, there’s the contention that BK’s advertising campaigns, “clearly connected with their young-male targets.” Did they? “At every step, the chain became more relevant to pop culture and more competitive in fast food,” says Mullman and Bryson York. We'd say that’s not exactly the same as connecting the brand with young male targets. Presumably there are some facts and figures that substantiate the claim that attitudes towards the BK brand improved among the target after seeing the advertising. We’d like to see those.
Finally, there’s BK’s “cool” positioning. Now we know the going intuition is that intangible positionings—those that evoke emotions and attitudes like “cool” and “chic”—are really the way to go these days. Crispin Porter built its business by making brands cool.
Compared to BK, McDonald’s looks like a cool wannabe. “McDonald’s hasn’t broken as much new ground in online marketing or social media, and its U.S. advertising doesn’t get much more edgy than a stuffed and mounted fish chiding someone for eating a Filet-O-Fish sandwich,” reports AdAge. Yet McD's decidedly mainstream focus on having something for everyone—from a tasty sandwich to a good deal—seems to appeal to a much more diverse and varied crowd of fast food patrons.
Bear in mind that “cool” is entirely subjective, and subversive can be off-putting. Many of BK’s franchisees have complained that the current approach might actually be turning off the folks outside the young male target.
It can also be so subtle or vague to those not in “the know”, it’s not even clear what to think about a brand. As Al Ries commented, “with Burger King, Crispin has been very good at cutting through the clutter, but it hasn’t positioned the brand very well….I’m not sure if most people know what to associate with Burger King.”
Being cool, it would seem, doesn’t necessarily pay.
Thursday, July 2, 2009
Tuesday, June 30, 2009
What's New at the Grocery Store?
Ted Mininni’s trying to get some good conversation going on MarketingProfs with his post, “How Can Supermarkets Truly Differentiate?” He takes his inspiration from Damian Joseph’s Businessweek article, “Supermarket Strategies: What’s New at the Grocer?”
Like pretty much every retailer—except for Wal-Mart—these are tough times from grocery stores. Everyone is cutting back across the board, even on food. According to BW, “today’s newly frugal consumers are cranking up the pressure on retailers to innovate.” As a result, “food retailers are seeking out new trends and technology that might differentiate them from competitors.”
Joseph gives a few examples of some of the new services and retail concepts grocery stores have come up. There’s the very cool and very expensive-sounding “Smart Shopping Assistance,” a smart cart that tabulates products as they go in the basket, downloads coupons, and enables payment without having to get in line.
Bigger stores are rolling out their versions of a quickie mart with basic items and ready-to-eat fare and smaller stores aimed at a particular ethnic group. Others have added restaurants or are building “eco-friendly store environments.”
But as Ted asks in his post, “Of course, when one supermarket chain implements any of these ideas successfully, can it be long before their competitors jump on the bandwagon? Then what?” It’s a good question, especially for a company that’s made a significant investment in developing, testing, and rolling out something like a cutting-edge shopping cart that does just about everything but put your stuff in the paper bag and carry it out to the car.
One question we have is whether there’s some overarching marketing strategy guiding these new product/service/retail concept development choices. Does the brand that’s building the bionic shopping cart, for example, know the high value customers in the market areas of most of its stores crave convenience in a shopping experience and feel quite comfortable using technology to make their lives easier? Is it trying to make the case it’s THE most convenient shopping experience around?
It certainly makes it easier to box out the competition when they try to copy you—not to mention improve the odds that an innovation will help grow your business—if what you’re doing with the brand in general has a lot to do with where you’re going with innovation.
Like pretty much every retailer—except for Wal-Mart—these are tough times from grocery stores. Everyone is cutting back across the board, even on food. According to BW, “today’s newly frugal consumers are cranking up the pressure on retailers to innovate.” As a result, “food retailers are seeking out new trends and technology that might differentiate them from competitors.”
Joseph gives a few examples of some of the new services and retail concepts grocery stores have come up. There’s the very cool and very expensive-sounding “Smart Shopping Assistance,” a smart cart that tabulates products as they go in the basket, downloads coupons, and enables payment without having to get in line.
Bigger stores are rolling out their versions of a quickie mart with basic items and ready-to-eat fare and smaller stores aimed at a particular ethnic group. Others have added restaurants or are building “eco-friendly store environments.”
But as Ted asks in his post, “Of course, when one supermarket chain implements any of these ideas successfully, can it be long before their competitors jump on the bandwagon? Then what?” It’s a good question, especially for a company that’s made a significant investment in developing, testing, and rolling out something like a cutting-edge shopping cart that does just about everything but put your stuff in the paper bag and carry it out to the car.
One question we have is whether there’s some overarching marketing strategy guiding these new product/service/retail concept development choices. Does the brand that’s building the bionic shopping cart, for example, know the high value customers in the market areas of most of its stores crave convenience in a shopping experience and feel quite comfortable using technology to make their lives easier? Is it trying to make the case it’s THE most convenient shopping experience around?
It certainly makes it easier to box out the competition when they try to copy you—not to mention improve the odds that an innovation will help grow your business—if what you’re doing with the brand in general has a lot to do with where you’re going with innovation.
Monday, June 29, 2009
More Bad News for Facebook's Ad Sales Team
We try to keep tabs on how different media channels--the "hot" and "not so hot"--are doing in terms of real or perceived performance, so were happy to come across this study from Knowledge Networks with some findings on social media.
"Internet Users Turn To Social Media To Seek One Another, Not Brands or Products," has a couple of interesting tidbits.
Not surprisingly, a whole lotta folks us Facebook and the like. Eighty-three percent of the online population ages 13 to 54, according to Knowledge Networks. And more than half use it on a weekly basis. And more good news for social media proponents: 34% say they use the sites more often now than a year ago, while only 18% say they use them less.
The bad news--and you knew some was coming--for the purveyors of social media looking to leverage this level of devotion is just 5% of users say they regularly use sites such as Friendster, MySpace, Cafemom, YouTube and Twitter for guidance on purchase decisions in nine gigantic product/service categories--categories like travel, eating out, personal care products, and prescription or OTC drugs.
Most users didn't seem to have too big a beef with having to deal with ads when they log in to Facebook. It's a "fair price to pay" 63% said. Yet only about 16% agreed they are more like to buy from brands advertising on social media sites. So much for cache.
"Internet Users Turn To Social Media To Seek One Another, Not Brands or Products," has a couple of interesting tidbits.
Not surprisingly, a whole lotta folks us Facebook and the like. Eighty-three percent of the online population ages 13 to 54, according to Knowledge Networks. And more than half use it on a weekly basis. And more good news for social media proponents: 34% say they use the sites more often now than a year ago, while only 18% say they use them less.
The bad news--and you knew some was coming--for the purveyors of social media looking to leverage this level of devotion is just 5% of users say they regularly use sites such as Friendster, MySpace, Cafemom, YouTube and Twitter for guidance on purchase decisions in nine gigantic product/service categories--categories like travel, eating out, personal care products, and prescription or OTC drugs.
Most users didn't seem to have too big a beef with having to deal with ads when they log in to Facebook. It's a "fair price to pay" 63% said. Yet only about 16% agreed they are more like to buy from brands advertising on social media sites. So much for cache.
Thursday, June 25, 2009
Going Out of Business Just Ain't What It Used to Be
We hear plenty of stories about how this recession has up-ended many a business model. We’ve got another one for you.
In “In Texas, There’s No Business Like ‘Going out of Business,’” the Wall Street Journal’s Barry Newman recounts the plight of rug dealers oriental rug dealers trying to find alternatives to the once compelling “Going Out of Business” positioning.
According to the WSJ, “the arrival of hard times has thrown the survival of the going-out-of-business model into doubt. Everybody else is slashing prices as if there’s no tomorrow. Old-line going-out-of-business businesses are lost in the crowd.”
Apparently “their best customer—the American trained to pay the advertised price—has taken to haggling” and more and more retailers are giving in. In other words, “going out of business” doesn’t mean “get the best deal around” any more—everyone has good deals—and maybe even the best deal—you just have to ask.
Newman describes how one rug retailer in Texas used to pack the store with “total liquidations” promotions. But recently, “on a Saturday in June, he ran a four-page color ad in the Dallas Morning News pitching rugs at ’60-90%’ off list” but “only four sets of customers came at all.” Not exactly a great ROI on that one.
Wonder what the “white space” positioning opportunity for these guys is?
In “In Texas, There’s No Business Like ‘Going out of Business,’” the Wall Street Journal’s Barry Newman recounts the plight of rug dealers oriental rug dealers trying to find alternatives to the once compelling “Going Out of Business” positioning.
According to the WSJ, “the arrival of hard times has thrown the survival of the going-out-of-business model into doubt. Everybody else is slashing prices as if there’s no tomorrow. Old-line going-out-of-business businesses are lost in the crowd.”
Apparently “their best customer—the American trained to pay the advertised price—has taken to haggling” and more and more retailers are giving in. In other words, “going out of business” doesn’t mean “get the best deal around” any more—everyone has good deals—and maybe even the best deal—you just have to ask.
Newman describes how one rug retailer in Texas used to pack the store with “total liquidations” promotions. But recently, “on a Saturday in June, he ran a four-page color ad in the Dallas Morning News pitching rugs at ’60-90%’ off list” but “only four sets of customers came at all.” Not exactly a great ROI on that one.
Wonder what the “white space” positioning opportunity for these guys is?
Tuesday, June 23, 2009
CPG Loyalty Just Ain't What it Used to Be
Just last week we were reading about Hyatt's big spend on marketing efforts to drum up loyalty and thinking that sounded like a pretty good idea. Customers might not spend more during a recession and it could just be a losing proposition trying to convince them to. Keeping the customers you have and making sure they are spending what they planned to with you, now that sounds a bit more doable.
But in case you still need some convincing that fostering loyalty could make for a profitable year, we bring you the CMO Council's, "Losing Loyalty: The Consumer Defection Dilemma."
WARNING: if you are already having trouble sleeping at night, reading this study probably isn't a great idea.
Based on analysis of the individual buying patters of more than 32 million consumers in 2007 and 2008 across 685 leading CPG brands, the study found, "there is an unexpectedly high level of churn across most brands."
Findings include:
- For the average brand in this study, 52% of highly loyal consumers in 2007 either reduced loyalty of completely defected from the brand in 2008.
- Only four out of ten brands retained 50% or more of their highly loyal consumers from year to year.
- For the average brand, about one-third of all highly loyal consumers in 2007 completely defected to another brand in the same category in 2008.
According to the CMO Council, "loyalty erosion and consumer defection are pervasive and costly problems for CPG brands, and their impact is increasing dramatically in the current economy." The organization maintains that a number of the major brands in the study could have increased their overall revenues by 20% or more in 2008 if only they could have cut down on the mass migration of highly loyal customers to competitors.
Tuesday, June 16, 2009
GM's Mountain to Climb
What do GM and the Republican party have in common? Listen to Frank Langfitt NPR's piece, "GM Seeks to Overcome Perceptions on the Coasts," and the answer will be revealed. Seems that while GM enjoys a steady popularity in the middle of the country, on the left and right coasts, it's an entirely different story.
"In reality, there are two U.S. auto markets," reports Langfitt. "One is Middle America, places like the Great Lakes and the Plain states, where people prefer trucks and SUVs where GM excels--and where more than half the vehicles on the road come from Detroit. Then there are the coasts." Here, Honda, Toyota, and foreign brands in general account for 70% of sales.
GM maintains it can't ignore the coasts--these markets, it says, are "critical to its rebound." Makes sense from a business standpoint. You want to be a national car company, you've got to cultivate a NATIONAL market. As Mark LaNeve, head of marketing for GM, says, "A, they're big markets--New York, California, D.C., Florida--huge vehicle markets. B, they're trendsetting markets, they're youthful markets, they're diverse markets. Those are all important to our future growth."
Not an easy road to hoe by any means. "Is it climbing Mount Everest? No," speculates Lonnie Miller, an auto industry consultant with R.L. Polk. "Is it climbing a smaller mountain in North America, like Mount Hood? Maybe. They're better than halfway up the mountain, but really it's: Will people give them a fair chance?"
Frankly, we're not convinced they're even close to halfway. Much of the discussion of what's going to make the difference with folks on the coast is products. In the NPR story, for instance, Mark LaNeve talks about the Malibu's growing appeal on the EC and WC. While having great products is, of course, critical to growth, it's not clear to us what insights about car buyers inform GM's product configuration decisions. We're a bit concerned that GM's infamous "build it, they will come" mentality is still at work here.
The other part of the discussion focuses on fuel efficiency and GM's focus on offering fuel-efficient vehicles. Sounds more like playing catch-up rather than a strategy for reinvention to us.
We've got to think that by now fuel-efficiency is just a price-of-entry characteristic in many--if not most--vehicle categories. We don't think it's too presumptuous to say that GM doesn't exactly hold a position of superiority in the minds of the general car buying public as far as fuel efficiency goes.
Our thought is if GM wants to make it up this mountain, it needs to itself a really good map.
Find out from the folks in middle America what they love about the brand. What are the things they think GM does better than competitors, both foreign and domestic? What aren't they getting from any car manufacturer but, boy, would they like to get?
Find out from the folks on the coast who's open to GM? Just because folks tend to buy Toyotas and Hondas doesn't mean they're all universally happy with Toyotas and Hondas. There's got to be some folks who'd at least be open to considering GM and are interested in new products. Who are those folks? Where are they? What do they like about GM and GM's product line-up? What aren't they getting from any car manufacturer, but, boy, would they like to get?
There's very likely going to be at least some overlap in what middle Americans who love the brand and coastal Americans who are open to GM and/or pretty unhappy with their current brands think, need, and want. Use that information as the guide for product development and marketing.
"In reality, there are two U.S. auto markets," reports Langfitt. "One is Middle America, places like the Great Lakes and the Plain states, where people prefer trucks and SUVs where GM excels--and where more than half the vehicles on the road come from Detroit. Then there are the coasts." Here, Honda, Toyota, and foreign brands in general account for 70% of sales.
GM maintains it can't ignore the coasts--these markets, it says, are "critical to its rebound." Makes sense from a business standpoint. You want to be a national car company, you've got to cultivate a NATIONAL market. As Mark LaNeve, head of marketing for GM, says, "A, they're big markets--New York, California, D.C., Florida--huge vehicle markets. B, they're trendsetting markets, they're youthful markets, they're diverse markets. Those are all important to our future growth."
Not an easy road to hoe by any means. "Is it climbing Mount Everest? No," speculates Lonnie Miller, an auto industry consultant with R.L. Polk. "Is it climbing a smaller mountain in North America, like Mount Hood? Maybe. They're better than halfway up the mountain, but really it's: Will people give them a fair chance?"
Frankly, we're not convinced they're even close to halfway. Much of the discussion of what's going to make the difference with folks on the coast is products. In the NPR story, for instance, Mark LaNeve talks about the Malibu's growing appeal on the EC and WC. While having great products is, of course, critical to growth, it's not clear to us what insights about car buyers inform GM's product configuration decisions. We're a bit concerned that GM's infamous "build it, they will come" mentality is still at work here.
The other part of the discussion focuses on fuel efficiency and GM's focus on offering fuel-efficient vehicles. Sounds more like playing catch-up rather than a strategy for reinvention to us.
We've got to think that by now fuel-efficiency is just a price-of-entry characteristic in many--if not most--vehicle categories. We don't think it's too presumptuous to say that GM doesn't exactly hold a position of superiority in the minds of the general car buying public as far as fuel efficiency goes.
Our thought is if GM wants to make it up this mountain, it needs to itself a really good map.
Find out from the folks in middle America what they love about the brand. What are the things they think GM does better than competitors, both foreign and domestic? What aren't they getting from any car manufacturer but, boy, would they like to get?
Find out from the folks on the coast who's open to GM? Just because folks tend to buy Toyotas and Hondas doesn't mean they're all universally happy with Toyotas and Hondas. There's got to be some folks who'd at least be open to considering GM and are interested in new products. Who are those folks? Where are they? What do they like about GM and GM's product line-up? What aren't they getting from any car manufacturer, but, boy, would they like to get?
There's very likely going to be at least some overlap in what middle Americans who love the brand and coastal Americans who are open to GM and/or pretty unhappy with their current brands think, need, and want. Use that information as the guide for product development and marketing.
Monday, June 15, 2009
Register for Free Kevin Clancy Webcast
Don't miss the opportunity to attend a FREE online webcast give by Copernicus' own Kevin Clancy on Wednesday, June 24, at 3 pm. Kevin will give the webcast as part of the Engagement Marketing Summit, organized by BrightTALK™.
Kevin's talk, "Impacting Marketing ROI: 3 Ways to Engage High Value Customers," will last about 45-minutes. He'll cover things every marketer can do to move the "right" customers towards their brands.
Register to attend any and all the webcasts at:
http://www.brighttalk.com/summit/engagementmarketing
Kevin's talk, "Impacting Marketing ROI: 3 Ways to Engage High Value Customers," will last about 45-minutes. He'll cover things every marketer can do to move the "right" customers towards their brands.
Register to attend any and all the webcasts at:
http://www.brighttalk.com/summit/engagementmarketing
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