I was delighted to see the flight attendants handing out snack packs, remembering the most delicious chocolate covered caramel on an earlier flight. Eagerly breaking the seal, I was met not only by the chocolate, but a most unfortunately named package of crackers.
Brand architecture often comes down to an evaluation of tradeoffs. In my experience, there’s rarely a cost-free benefit or a no-foul cost. That’s why I have found the concept of brand value so helpful. It focuses on the net effect of an initiative -- are the benefits worth more than the costs of getting those benefits or are cost-saving initiatives doing more harm than good?
With its 2011 corporate revenue estimated at $54 billion and brands in practically every aisle of the grocery store, Kraft is the largest producer of branded, packaged food and beverages in America. So it’s hard to believe that before MiO, the last new category Kraft created was DiGiorno frozen pizza in 1995 and its last new beverage brand was Crystal Light, launched in 1988.
In what may be the most overdue brand extension in history, Kraft is using the 100-year-old Planters name to speed growth of its mature grocery business.
After a concentrated period of regrouping and refocusing, Starbucks is on the move -- and its expansion of Via Ready Brew in the U.S. and other markets is a pivotal component of a worldwide push to leverage synergies across business segments, channels and media platforms. It's still early in the game for Via, introduced last September, but the new line's roles within that global game plan as a revenue stream, door-opener and template for ongoing brand expansion is becoming increasingly visible.
Don't be shocked if you can't find your favorite salad dressing or mouthwash on your next trip to Wal-Mart. Large retailers -- including Wal-Mart (WMT, Fortune 500), the world's biggest -- are wrestling with having too many types of brand-name products. At the same time, shoppers are buying less and looking for bargains. So unless a particular brand is a top seller in its category, it's getting knocked off the shelf -- and sometimes getting replaced by a cheaper store brand.
A recent Advertising Age article caught my eye and I think it’s important. The gist: key consumer packaged goods manufacturers are promising to roll out innovative new products in 2010 after a major slow-down in 2009 due to the rocky economy. The article: “Package-Good Players Plan New-Product Surge for 2010” states that some of the largest global consumer product companies “have said or signaled that they expect to step up new-product activity, and by extension, marketing support in 2010.”
A recently published Media Post Marketing Daily piece, “Some Categories May Be Vulnerable at Retail,” points to some serious fall-out at retail after many months of sales declines. The gist: retailers are intent on cutting inventory levels. That doesn’t only mean there will be less back stock in stores. It also means there will be considerable SKU cuts made to reduce costs, optimize assortments and improve profit margins. According to the Wall Street Journal, the nation’s largest retailers will be cutting their overall product assortment by 15% in 2010. Wal-Mart is committed to an overall reduction of 15-18% in their assortments. That’s significant. In fact, it’s a total reversal of the trend in the past few years to grow assortments. It’s a safe bet, mid-sized and smaller retailers will follow suit. The losers here will be CPG companies.
According to the Google Keyword Tool,there were 7.5 million broad match searches on the term ‘soap’ in September. Granted that some of the searches are related to “soap operas” rather than cleansing soaps, there are still quite a few people searching for the term. CPG companies are fueling this growth in search with increased investment in online advertising. In fact, according to TNS, one of the leading soap brands Dove spent nearly $5MM on online display advertising during the first half of this year. This investment is significantly greater than that of rival brands Softsoap and Olay. Due in part to their investment in online advertising, Compete’s data shows that site traffic to Dove.com are multiples greater than its competitors.
It's likely that the children and teenagers of today will conduct the majority of their shopping online, according to a report from Nielsen. While online shopping accounts for a modest percentage of today's sales, it is growing rapidly. In 2008, online retail accounted for approximately 7% of total retail sales in the U.S., with 1.5% of consumer packaged goods (CPG) spending done on the Web, according to Nielsen's "Building Great Brands in the Digital Age: Guidelines for Developing Winning Strategies."
A new study indicates that online advertising boosts retail sales of consumer packaged goods brands by 9% on average -- comparable with the lift from TV ad campaigns. The findings come from comScore and marketing consultancy dunnhumbyUSA based on research involving online campaigns run over three months for a variety unnamed CPG brands.