Tag Archives: Big Business

Waitrose gambles premium brand to attract price conscious shoppers

2 Oct

On the surface of it Waitrose’s latest marketing plan to match Tesco on 1000 branded goods seem a little bit strange.

The scheme has been backed up with a heavy TV, press, outdoor and email advertising campaign,  and the launch of the price match has also received a number of mentions in the media.

Waitrose has carved itself a lovely niche in the market by offering quality premium goods, which is different from the low cost strategy of Tesco and Asda.  It seems strange Waitrose wants to try and compete with the bargain supermarkets as it is already an extremely competitive end of the market; and an end that seems to demand a constant slew of the advertising in order to keep market share intact.

The timing of the price match is also bizarre. Why launch it now when the economy has recovered and not during the recession when value for money was high on the agenda? Also the thrust of this campaign is that they will match the price of Tesco, not beat it, not undercut them, not actually save anyone any money, so they are offering no unique benefit for people. It also does not match of the other several branded products that supermarkets offer.

A Waitrose shopper has been willing to pay a bit more for their weekly shop in a trade of for quality, they are the Marks and Spencer yummy mummy who are doing their big weekly shop.

So trying to position the supermarket in the same bracket as Tesco, one that is competitive on price, may also damage the brand’s reputation of quality.

However I think this campaign will work. It helps reassure existing customers they are not being ripped off by paying over the odds for the same items, and it will also help to draw in new customers as well. I can imagine this campaign has been launched after a lot of research in which the main finding was that people are intrigued by Waitrose but are put off because of the perceived high price of their goods.

But 19 years ago my mother, a regular Asda shopper, thought she would give Tesco a whirl after hearing it was a little bit better than Asda and just as cheap. So off to Tesco she went to do her regular weekly shop and to her horror she discovered that it had cost her over £10 more. She agreed that some of the goods were better, but she has never been back to Tesco to do her main shop since that day.

So the price match may work in dragging extra people in Waitrose, but once they discover that their shopping costs more the majority will soon revert back to their normal cheaper supermarket.

But a few may enjoy the experience and the food within Waitrose that they may decide to keep on shopping there. So I think this bold strategy will work for the company as it tries to snatch more market share in the ultra-competitive world of supermarket retail.

Will women walk if Nike continues to support sponsored athletes like Rooney and Woods?

11 Sep

Legendary Romanian tennis player Ilie Năstase had just won his second Grand Slam, triumphing over Nikola Pilić in straight sets at Roland Garros to win the 1973 French Open. He won the US Open the previous year and was now the World’s number one tennis player. So he seemed like an obvious choice to be paid to wear Blue Ribbon Sports’ new tennis shoe.

He was the first person the company endorsed and he would be the first in a long line of winners and champions that the company would align itself with. But Năstase was also a notorious womaniser, he was named by Maxim magazine in its top ten “Living Sex Legends” list, reportedly having slept with over 2,500 women. This was a sign of things to come for the company, as he would be first in a long line of their winners and champions who would cause sexual scandals. When Năstase’s career petered out in the late 70s Blue Ribbon Sports turned to a new tennis star. The company signed up John McEnroe in 1978 and in the same year renamed itself Nike Inc.

Sponsoring the world’s greatest athletes is a massive part of Nike’s marketing strategy and they now have sponsorship deals with thousands of sports stars and sports team around the world. And just like Ilie Năstase did, a raft of Nike’s sponsored athletes have caused scandal recently with lurid tales of their private lives.

A string of Nike’s athletes have been involved in murky sexual dealings recently. Wayne Rooney reportedly slept with vice girls, Tiger Woods cheated on his wife with a string of women, Christiano Ronaldo fathered a love child, Ashley Cole is now divorced after bedding a number of women, and Frank Ribery solicited sex from an underage prostitute.

But what happens to the public’s perception of Nike when their athletes go bad, does it adversely affect Nike’s brand and reputation and have a knock on effect on their sales?

Nike seem bullish about their long term sales prospects, they reckon by 2015 its revenue will have risen by 40% to $27 billion. But in the short term there has been a massive hit on one of their brands, sales of its Woods branded golf merchandise has slumped, this come at a time when golf apparel sales overall are on the up. But is this sales slide due to Woods’ infidelity or the fact he has not been playing as much golf, and when he has been playing he has not been winning?

So there seems to be a short term hit on one of Nike’s brands but what is the long term damage? Nike has stood by their athletes, generally releasing statements saying it is a private matter for the stars. But by standing by their athletes – and effectively not condoning their behaviour – is the company doing serious damage to its brand in the eyes of the public and specifically women?

We look at the actions of Rooney and Cole who have allegedly wronged their other halves, Coleen Rooney and Cheryl Cole, who are both role models and are viewed very positively by women in the UK. Would Nike supporting athletes such as Cole and Rooney have more of an effect on whether women choose Nike over its rivals, or does Nike’s association with top women athletes have more of an effect? What would be the stronger influence in the mind of women when choosing a sporting goods brand, is it positive role models the brand associates itself with or the brand not condoning the sleazy antics of its male athletes?

24: action/drama or advert/drama?

12 May

 

Just one of the many shots of a Dell computer shown in TV show 24

 

I am becoming a  brand geek. While on a marathon session of watching a box set of 24, I couldn’t help but notice a brand after brand popping up on screen.

In my defence it is not hard to notice brand after brand after brand on 24 – it is a television show that is particularly heavy on product placements.

In earlier seasons of 24 Apple paid to have its Mac computers splashed across our TVs. In season one Jack and the fellow good guys used Macs and the terrorists and associated bad guys used computers with a Windows system.

Two giant computer makes, Dell and Hewlett-Packard, have paid to have their brand placed into series four of the show. Practically every time a computer in the Counter Terrorism Unit is shown, which is the main setting of the show, you saw Dell or HP logo.

This is the perfect association for both of these American companies. Not only are HP’s logo and Dell’s logo continually flashed at people, but they are creating a perception that their computers are cutting edge. They are showing consumers their computers are capable of tackling some of the most technologically advanced terrorists that the US of A has faced, they perform some of the most complex computing tasks at top speed and they do it all without crashing.

Now both HP and Dell have paid huge amounts of money to have their brand used in this way in the show. But I was shocked when star of the show Jack Baeur (a Federal Agent) has to hide out in a house. Now he needs a computer. This is the transcript from the scene:

Tony ‘What kind of communication do you need?’

Jack ‘A wifi and a hardline.’

Tony ‘Ok we will go back to my place.’

Jack ‘OK, thank you Tony.’

Tony ‘Wait til you see it before you thank me.’

 

An old school Dell computer being used by Jack Bauer in 24

 

When we get to the house we see Jack using a retro Dell system. It seems bizarre that Dell – who clearly have paid to have their logo shown in the series – would want people to associate their brand with outdated equipment and characters being derogatory towards its brand.

Will brands be leaving the Woods?

9 Dec

Two of the trio of champions have been causing trouble for Gillette.

There is a bit of rumbling in the press that Tiger Woods’ love of mistresses may cost a fortune in future careers earnings as sponsors look to distance themselves from the golfer.

 

 

The media are having fun with the news that Gatorade have dropped him due to his alleged flings with several women and the subsequent scandal it has caused.

He signed a deal with Gatorade in 2007 for what is believed to be worth $100 million over five years. But they announced they are set to axe their Gatorade Tiger drink, however the PepsiCo brand says the decision to drop the drink was made months ago, the scandal is just a happy coincidence they say.

Woods also has deals with Cadillac, Accenture, AT&T, TAG Heuer, Electronic Arts, Nike and of course Gillette, that have helped him become the world’s first dollar billionaire sportsperson, according to Forbes. All these sponsorship deals and endorsements actually make up 90% of Tiger’s income.

Nielsen, the US TV ratings and advertising measuring guru, says there has been a Tiger Woods advertising blackout since two days after the scandal broke. Despite the research by Nielsen, Woods’ sponsors say they have not changed their advertising plans have said they are sticking with their media schedules.

One brand to stand by their man is Nike who issued a statement backing Woods last week.

But out of all the brands I feel sorry for Gillette, they are having a right old tough time with their sponsors of late. We all know Thierry Henry was a very naughty boy, and it seems that Woods has been a very, very naughty boy. They must be nervous that a scandal will break about Roger Federer. Behind his squeaky clean image Gillette must be terrified he is actually a crack addict who he enjoys nothing more than kicking puppies and is having a sordid affair with Sue Barker. My money is on the affair.

In the eyes of the sponsors Woods is damaged goods and they will no doubt be scrambling to get away from anything to do with him. It was his golfing ability that made his name but it was a nice-guy family image that built his brand to allow him to become a billion dollar sportsman. But in my very humble opinion what Henry did is far worse than what Tiger has allegedly done. Tiger’s cheating is nowhere near as bad as Henry’s. These men have lucrative sponsorship deals because they rose to the top in their particular sporting arena. They became the best of the best. Gillette sponsors them because they are champions. They were not chosen because of their apparent wholesome family image but they have both been endorsed by brands as they symbolise excellence, winning and success. They have been sponsored because of their profession and not their private life.

Tiger may have cheated in life but Henry cheated on the field of play, he cheated in his profession, and this is worse in my mind. Henry handled he ball not once (perhaps forgivable), but twice in order to direct it onto his foot, onto William Gallas and into the goal. It was a clear breach of the fair play ethos of what football, being a sportsman and a role model should all be about.

Henry and Woods are sponsored by Gillette because they are sportsmen, but Henry’s conduct was terribly unsportsmanlike. While Gillette stood by Henry and backed him up almost immediately they have so far remained quiet on Woods, they are no doubt waiting for the scandal to reveal its full extent. Their silence on Woods’ behavior is likely to mean that they will be dropping him or at least scaling back their use of him in their marketing activities. But if they were to drop anyone it should be Henry for his reputation has been damaged beyond rehabilitation. If anything would make me consider boycotting Gillette it would be because Henry and not Tiger Woods.

Matty’s marketing revolution for social media

6 Nov
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Nike has used football to create a massive Facebook following for its brand

Branding on social networking sites has reached new levels on sophistication with companies setting up Facebook pages and Twitter accounts. This has allowed people to become connected with their brands and allows companies to touch with their market.

I am going to use Nike as my case study on Facebook and Twitter as what they have done has top notch. Nike has been clever on Facebook and has set up a ‘Nike Football’ Facebook page, reinforcing Nike’s association with football was a good move as people are more passionate about football than they are about Nike. For marketing on social media to be effective brands have to imaginative and think if ways they can enhance people’s lives. Nike has put training videos, photos and football updates on their page that will engage people and keep them returning. It has also cleverly associated itself with their sponsored star players through updates on their performances, videos of them and links to their own Facebook Page etc.

Now onto Twitter, Nike Golf have set up a wonderful page. They have updates, news and behind the scene pictures of their sponsored players and links to their Twitter page. Also questions that are asked are quickly answered so there is a conversation with the brand and its Twitter followers. They are inviting people into their community and allowing them to connect with the brand. But at all the while at the same time showing of their stash and marketing their brand.

Marketing Potential

But I think there is further potential for marketers and brands to exploit social networking potential. Individual’s Facebook and Twitter profiles have a huge amount of personal information on which can be used by marketers. On Facebook people list their favourite books, films, TV shows, sports, activities, interests and also their membership of groups and fan pages. This kind of detailed information on millions of people is a market researcher’s dream.

If a program could scan people’s profiles it could then allow advertising to be targeted at individual profiles, concentrating their message on the right people and not using a scatter gun effect that may mean their advertising is irrelevant to many of the people it is seen by. They could advertise by popping up in the person’s news feed, a wall post or by sending them a message and on Twitter companies could Tweet an advertising message at people.

Privacy Issues

There may be a bit of concern with privacy but people have published this information and therefore it is public information. People live their lives around these sites, they are so heavily invested in them that they would not leave them. Also people may feel the advertising would be invasive but no more than adverts that take over your computer screen or television adverts that are uninvited into people’e houses everyday. 

Think of the potential – I am suffering my a severe bout of Manflu, so I put a status update in my Facebook ‘Matt has a cold and is feeling unwell’. Now this would be picked up and advertising for Lemsip, Vicks or Nurofen would be targeted towards my Facebook profile.  

It is no different to standing in the middle of Leicester Square after a night out a screaming ‘I need to get home!’ Now you would be grateful when a taxi-man, a limo chauffeur,  a train, bus or tube driver came up to you and offered you their services.

Moirgate: Update

23 Oct

There’s still no advertising around Jan Moir’s column on MailOnline. I wonder how long it will be before brands begin marketing around a Moir piece again? It could be some time and even when someone does there will be an inevitable backlash against the company, orchastrated of course through cyber space pretty much in the same way Moir was targeted. 

It has been fairly lonely around a Moir piece as of lately due to her controversial views on the former Mr Gatley

It has been fairly lonely around a Moir piece as of lately due to her controversial views on the former Mr Gatley.

 

 

So as I like a bit of a gamble, I have decided to place odds as to when a company will take the plunge and agree to their product being shown next to Jan Moir’s smiling face. 

* 1 week : 480/1
* 2 weeks: 267/1
* 3 weeks: 156/1
* When the Advent calendars go up: 114/1
* By Christmas Day: 113 /1
* By New Year’s Eve 2010: 10/1
* Never ever: 5/1

Disclaimer : These odds have absolutely no meaning whatsoever, I cannot take any bet you may want to place as I have little money. Please go to a reputable bookmaker to satisfy your all your Jan Moir related gambling requirements. 

It’s not going to be easy selling ad space next to a Jan Moir piece from now on

16 Oct
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Jan Moir's article on Stephen Gatley has caused an advertising blackout on the Mail Online page around her piece.

The Daily Mail’s sales team must be looking forward to getting back to work on Monday. It’s no doubt been fun trying to sell advertising space in the paper and on the website with the Credit Crunch and recession, but now they also have to deal with the fall out from a gay-bashing columnist. 

As you probably have heard Jan Moir made some pretty incentive (that’s putting it nicely) comments about Stephen Gatley and the wider gay community.

The general gist of what she was trying to say is that Stephen Gatley’s homosexuality somehow led to his death and as such it brings into question civil partnerships.

First her comments about Gatley: “And I think if we are going to be honest, we would have to admit that the circumstances surrounding his death are more than a little sleazy. After a night of clubbing, Cowles and Gately took a young Bulgarian man back to their apartment. It is not disrespectful to assume that a game of canasta with 25-year-old Georgi Dochev was not what was on the cards.” 

And now her opinion on gay marriage: “Gay activists are always calling for tolerance and understanding about same-sex relationships, arguing that they are just the same as heterosexual marriages. Not everyone, they say, is like George Michael. Of course, in many cases this may be true. Yet the recent death of Kevin McGee, the former husband of Little Britain star Matt Lucas, and now the dubious events of Gately’s last night raise troubling questions about what happened.”

A lot of people became enraged and as such there has been a barrage of criticism in the media, on the blogs, Facebook and Twitter. This in turn has led to a record number of complaints being made to the Press Complaints Commission. But does the Daily Mail really care if the PCC takes up the case, let’s be honest it’s a fairly toothless organistion with limited powers.

What is really going to worry the management at the Mail if there is a backlash from companies and a drop in advertising revenue. Brands have been quick to disassociate themselves with anything to do with Jan Moir after a well orchestrated Facebook campaign published telephone numbers of companies advertising around Moir’s piece. Marks and Spencer and Nestle demanded their advertising be taken away from around Moir’s column on the website, even though the Mail’s online team promptly removed all advertising from the page after it became apparent that her article hadn’t gone down too well. 

Time will tell what the ramifications for the Daily Mail will be. I can’t imagine any brands will want anything to do with Moir, it’s a fair assumption that the space around her articles will be ad free for some time.

Imagine a world where Coke promoted Pepsi

30 Sep
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A lovely view of Rochdale town centre

Think of the day if Coca-Cola advertised Pepsi on its cans, Vodaphone plugged T-Mobile’s latest new unlimited texts offer, Manchester United embossed ‘City Til I Die’ on their latest strip or Ronald McDonald handed out flyers for Burger King.

It’s pretty hard to imagine and you could argue that it would only happen in some crazy parallel advertising universe. Promoting your rivals seems bit a backwards strategy and let’s be honest its insane to even think about it, but not according to the communication crew at Rochdale council.

They have been advertising near by town centres and local markets on the back of their employee’s wage slips. Neighbouring towns, Todmorden and Hebden Bridge, have made an appearance and as they are just a short journey away should be considered fierce rivals to Rochdale’s own town centre. Although the adverts will no doubt put a few extra pennies in the council’s coffers, the possible long term damage is potentially disastrous.

For one Rochdale town centre has been going through a bit of a rough patch for the past few years, retailers have deserted the town in their droves only to be replaced with a bazaar of pound, pawn and phone shops. Town centre businesses need all the shoppers and custom they can get. So you have to wonder what the logic is behind actively encouraging people to go elsewhere. And the council is not just encouraging the general masses to go elsewhere it’s encouraging its own staff, its own representatives, the very people who are working to try and better Rochdale.

Also what kind of message does it send to council workers that their employer is promoting neighbouring shopping centres instead of its own? It almost shows a lack of loyalty and a lack of confidence in its own facilities. It is unimaginable to find ASDA promoting Tesco’s latest deals on the back of its employee’s wage slips, so why should Rochdale council promote rival markets?

This practice is inconceivable in the real world but somehow seems acceptable to communication professionals employed by Rochdale council.

McSpenses – is Parliament like McDonald’s?

23 Sep

Is Parliamentary business a lot like that of McDonalds While watching a bit of Question Time it was announced the head of UK McDonald’s will be a panelist in a few weeks time. This got me thinking how McDonald’s situation a few years ago is so similar to the row over MPs’ expenses.

 

McDonald’s came under intense pressure a few years ago from the media, the odd grassroots campaign and a lengthy libel case. It got so bad they even got their very own phrase coined in the dictionary. ‘McJob‘ basically describes a terrible job with little chance career development; apparently not many burger flippers were making it to the boardroom.

It was a pretty bad time for the public image of the company. They generally got a lot of pad publicity for a number of things, they took a battering in the media and through things such as McLibel and Super Size Me.

 As a result of all the fuss they changed. And by golly there can be no argument that they have.  They now have a healthier menu, their Happy Meals have the option of carrot sticks, grapes, orange juice and water. They are now a top employer and have all the official awards to back this up. They are now more open about the nutritional value of their food and what it is actually made of. A fantastic turn around for the company. As such they have had a lot of positive things to shout about and they will be the first to tell us all. One of their recent TV spots by ad agency Leo Burnett demonstrates their new business practices perfectly. 

They may have genuinely wanted to change their business, although you may take the view they were pressurised into changing due to the bad publicity. It was this drip, drip, drip of bad media coverage and the pressure that just kept building up until they hand was forced and they to change their business. 

In the same way this is true about MPs’ expenses. You get the impression that they don’t genuinely want to change, I doubt many of them want the public to know what they spent our money on. But it is a series of shocking revelations, the continued media coverage and public pressure that has forced Gordon Brown and his Government to do something. They know they have to change the system - which they have already started to do -  but they have been reluctant to do so. 

But if it wasn’t for the Freedom of Information campaign and then the subsequent revelations by the Daily Telegraph, the bad publicity, the media coverage and the subsequent demand from the public which followed, MPs would have continued business as normal.

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