Kellogg Company is combining coupons and a cause.
The company launched a program in which consumers who donate $5 or more to Feeding America, the nation's leading hunger relief organization, will receive Kellogg's cereal coupons worth a total of $5.
To donate, consumers visit kelloggs.com/feedingamerica, and click into a secure donation page on the Feeding America site that is branded with the Kellogg's logo.
Samantha Harris, correspondent for "The Insider," is helping Kellogg publicize the program.
Harris kicked it off by presenting the first box of cereal to the Food Bank for New York City's Community Kitchen of West Harlem on Wednesday.
The coupon program is part of an ongoing commitment by Kellogg, which has been a donor since the organization was founded. In April, the company said it will donate an entire day's worth of cereal production (more than 55 million cereal servings) to Feeding America.
Friday, June 19, 2009
Tuesday, June 16, 2009
Estee Lauder joins L’Oreal and P&G in lowering prices to boost sales
Estee Lauder has joined L’Oreal and Proctor & Gamble in unveiling its strategy of targeting value products to appeal to cash-strapped beauty consumers.
Speaking at the Reuters Global Luxury Summit in New York, Estee Lauder executives said the company is working on more affordable products for the holiday season.
Reuters reported COO Fabrizio Freda saying that the price of Estee Lauder’s cheapest products would fall in some categories and innovation will now be focused on value products.
To hold onto luxury consumers, Estee Lauder is also making smaller sizes of some products, such as 50ml and 30ml bottles of its Clinique Happy Perfume, which is normally sold in 100ml bottles.
Estee Lauder CEO William Lauder said the smaller bottles are selling better than the regular size one. He said: “The consumer has some money to spend; she just doesn’t have as much so she’d rather spend a little bit now.”
Analyst supports pricing strategy
Kline consumer products analyst Carrie Mellage said Estee Lauder is pursuing a smart strategy. She told Cosmetics Design: “Consumers are holding onto their money and are not splurging on luxury items as they once did. Manufacturers have to respond quickly to adapt their products to the new marketplace.”
The announcement from Estee Lauder comes shortly after Proctor & Gamble (P&G) unveiled its shift towards lower-priced products.
At the end of last month P&G head A.G. Lafley said every P&G business is working to reach more consumers by widening the price range of its products.
This is a marked u-turn in strategy for the consumer goods manufacturer which had been introducing increasingly sophisticated and costly products.
Looking at breakdowns of recent sales figures provides a strong justification for the shift in approach. For example, last month L’Oreal reported a first quarter drop in like-for-like luxury sales of 17.5 percent while overall like-for-like sales were down 4.3 percent.
The French company had foreseen trouble ahead in the luxury market and announced in February that it would release more value products and smaller versions of existing products.
For example, L’Oreal Paris, which currently has products in the €11 to €18 price range, plans to release a €9 moisturizer in mid-2009 and a 20ml version of the Viktor & Rolf perfume was launched recently at €35. The regular 100ml bottle sells at €98.
Risks associated with cutting prices
By offering more lower priced products, L’Oreal, P&G and Estee Lauder could run certain risks. As the Wall Street Journal pointed out in relation to the P&G announcement, consumers might abandon premium products permanently, deciding instead that the new cheaper alternatives are good enough.
Offering luxury products at lower prices could also reduce the value of a brand. However, Mellage said these risks are small so long as the higher priced products are kept and consumers are able to differentiate between the higher and lower priced ranges.
With specific reference to Estee Lauder, she said it would be inadvisable to slash the prices of its high-end La Mer products, but that there is scope to broaden the price range for Clinique.
Speaking at the Reuters Global Luxury Summit in New York, Estee Lauder executives said the company is working on more affordable products for the holiday season.
Reuters reported COO Fabrizio Freda saying that the price of Estee Lauder’s cheapest products would fall in some categories and innovation will now be focused on value products.
To hold onto luxury consumers, Estee Lauder is also making smaller sizes of some products, such as 50ml and 30ml bottles of its Clinique Happy Perfume, which is normally sold in 100ml bottles.
Estee Lauder CEO William Lauder said the smaller bottles are selling better than the regular size one. He said: “The consumer has some money to spend; she just doesn’t have as much so she’d rather spend a little bit now.”
Analyst supports pricing strategy
Kline consumer products analyst Carrie Mellage said Estee Lauder is pursuing a smart strategy. She told Cosmetics Design: “Consumers are holding onto their money and are not splurging on luxury items as they once did. Manufacturers have to respond quickly to adapt their products to the new marketplace.”
The announcement from Estee Lauder comes shortly after Proctor & Gamble (P&G) unveiled its shift towards lower-priced products.
At the end of last month P&G head A.G. Lafley said every P&G business is working to reach more consumers by widening the price range of its products.
This is a marked u-turn in strategy for the consumer goods manufacturer which had been introducing increasingly sophisticated and costly products.
Looking at breakdowns of recent sales figures provides a strong justification for the shift in approach. For example, last month L’Oreal reported a first quarter drop in like-for-like luxury sales of 17.5 percent while overall like-for-like sales were down 4.3 percent.
The French company had foreseen trouble ahead in the luxury market and announced in February that it would release more value products and smaller versions of existing products.
For example, L’Oreal Paris, which currently has products in the €11 to €18 price range, plans to release a €9 moisturizer in mid-2009 and a 20ml version of the Viktor & Rolf perfume was launched recently at €35. The regular 100ml bottle sells at €98.
Risks associated with cutting prices
By offering more lower priced products, L’Oreal, P&G and Estee Lauder could run certain risks. As the Wall Street Journal pointed out in relation to the P&G announcement, consumers might abandon premium products permanently, deciding instead that the new cheaper alternatives are good enough.
Offering luxury products at lower prices could also reduce the value of a brand. However, Mellage said these risks are small so long as the higher priced products are kept and consumers are able to differentiate between the higher and lower priced ranges.
With specific reference to Estee Lauder, she said it would be inadvisable to slash the prices of its high-end La Mer products, but that there is scope to broaden the price range for Clinique.
Saturday, June 13, 2009
All That Advertising Brings Buzz for Coffee Marketers
CHICAGO (AdAge.com) -- The coffee wars generated a flurry of advertising in May. McDonald's launched its first McCafe blitz, Dunkin' Donuts made its first concerted doughnut push in more than a decade and Starbucks began its first pure branding campaign. While it's too soon to say what the impact on sales has been, all three marketers saw a major uptick in buzz, as measured by Brand Index.
Dunkin' led McDonald's and Starbucks in buzz and value perception. Brand Index, which tracks more than 1,000 brands by conducting 5,000 daily interviews from a panel of 1.5 million consumers, monitors key brand attributes, including buzz, value perception, quality ratings and customer satisfaction to compile its index (which has a range of -100 to 100).
Dunkin' began May with a 24, peaked at 33 mid-month and settled at about 32 this week. McDonald's started with a 15, peaked around 24 and had dropped off to 16 by June 9. Starbucks' campaign, which has been confined to newspapers and select outdoor markets in its initial phases, has been more cyclical. The company began May with a score of 1, shot up to 11 within a week and plummeted again. In the past week, the chain's buzz has shot up to double digits again.
Those numbers may seem low, but ratings vary dramatically by category. Within the fast-food sector, a good buzz rating is considered to be anything above 10. Ratings closer to zero mean consumers have heard an even number of positive and negative things about a brand.
"Over the last few weeks, Starbucks has generated buzz through a variety of channels, including our national 'Coffee value and values' campaign hitting its stride, beginning our sponsorship with 'Morning Joe' on MSNBC and being named No. 1 best coffee by the Zagat survey," Starbucks' senior VP-marketing, Terry Davenport, said in a statement. He added that the retailer's online activity, including using Facebook and Twitter to tout its efforts, has also built excitement among baristas in its stores.
Dunkin' did not immediately respond to a request for comment.
McDonald's spokeswoman Danya Proud said the burger chain has been "extremely pleased" with the results of its coffee push. In particular, she said, the chain's "McCafé Your Day" online competition with Visa has gotten more than 10,000 entries. That response rate makes it "by far the most successful online sweepstakes in the company's history," Ms. Proud said.
Starbucks tries 'a different tack'But all three companies got a pretty strong jump in buzz, said Ted Marzilli, global managing director at Brand Index. Starbucks' jump, he said, had the "highest magnitude," especially because it was coming from about zero. He said Starbucks should be heartened that it not only made a splash when its competitors were outspending it but got a second spike in interest as McDonald's and Dunkin' were leveling off.
"They're probably going to be outgunned by McDonald's and Dunkin'," he said, noting that those brands spend more on advertising. "Starbucks is trying a different tack in last couple of months, getting people to think about bigger concepts. How expensive is a $3 latte when you think about other things like providing health care, working with farmers in areas where coffee is imported? That slightly different tack seems to be making a mark."
Mr. Marzilli said an increase in buzz can trigger shifts in other metrics, but not always. And as it stands, Starbucks is still struggling with its "value" perception, or whether consumers view the brand as giving them the most bang for their bucks. The chain has been hovering around -26, with a small spike last week that seems to have already corrected. McDonald's is just behind Dunkin' in value perception, around 25 to Dunkin's 26.
But when consumers want to treat themselves, all these numbers may go out the window. According to Brand Index, 43% of adults asked where they were most likely to purchase a "premium coffee drink" said Starbucks, 15% picked McDonald's, 11% sided with Dunkin' and 31% had no preference.
5 Comments
By Rodney33 FRISCO, TX June 12, 2009 01:13:18 am:
Grande Distribution.Distribution has been overlooked in the "coffee wars." But it shouldn't, here's why;Dunkin' Donuts has launched plans to grow beyond their core markets in the NE and Chicago.This aggressive roll out was timed well as Dunkin' Donuts not only has premium coffee at a value price, but also large metro distribution and a strong breakfast food menu enjoyed by many of the same demos as Starbucks and differentiated from McDonald's menu.Dunkin's expansion was designed to grow new markets into a truly national network with a very loyal customer base that follows Dunkin' in markets where it has substantial distribution. Dunkin' carefully aligned with blue chip franchisees with stellar credit and cash on hand. Dunkin' did a good job of lining up favorable financing for their best new partners, so that those partners wouldn't have to tie up a lot of their own personal cash into market build outs, to encourage more aggressive expansion goals.But Dunkin's expansion credit crumbled. Some of their important franchisee partners have gotten out their contracts and are in the process of selling the stores they developed, simply because they cannot operate in large metro markets without substantial scale, which has been slowed or halted by the credit crunch.That leaves in a national coffee war, Starbuck's and McDonald's with Dunkin' a strong regional player in many core markets and expansion on a more distant horizon.McDonald's sales have surged in the recession, Starbuck's have nosedived. McDonald's doesn't need to open new stores, they are the heavyweight champion of distribution, they've built out McCafe's in a good portion of their footprint and they aren't closing many if any existing stores.Starbuck's, who also had heavyweight distribution, has been closing stores, lowering their prices on their super premium coffee and reducing their already weak food offering.The retrench moves by Starbuck's and their inability or willingness to expand their menu beyond core coffee drinks means McDonald's is easily the Grande of all things coffee, no matter how you order it.If Dunkin' can get their expansion financing and partners in order, they've got a good run in front of them, for they have alternative morning foods McDonald's has never done well with on a national basis - Donuts and Wraps, all of which also trump Starbuck's current go-to-market strategy.Starbuck's best hope is to take calculated risks and not cut back on distribution or the price of their coffee, but instead work on their food menu to offer differentiated, value priced food, through their distribution channel. Procter and Gamble uses price brands to drive category traffic and premium brands to deliver margins. Starbuck's could use value priced food in the same way to drive more traffic and use premium priced coffee to deliver their margins.The French bistro model and heavy distribution served Starbuck's well. Why can't the value priced French bakery, with super premium coffee all driven by sizable distribution? Rodney Mason, CMOMoosylvaniaThe Great State Of Designhttp://www.moosylvania.com/www.twitter.com/rodmoosewww.twitter.com/moosylvania
Permalink
By Rodney33 FRISCO, TX June 12, 2009 01:21:51 am:
Starbucks - not Starbuck's
Permalink
By firekid San Francisco, CA June 12, 2009 03:03:31 pm:
lity is that there isn't much difference about walking into a Starbuck's versus a McDonald's or Dunkin Donuts these days. The above comments uniformly voice complaints about what was once (and should still be) Starbuck's Holy Grail: the experience. Walking into a Starbuck's used to be like crawling into a blissfully warm, coffee-scented Snuggie. Now it's like pulling over at an Appalachia truck stop. Fix the experience. Clean it up. Fact is Starbuck's got too big, too greedy. Their appeal was perceived as intimacy. Now there's a Starbuck's in every grocery store, gas station and lowest common denominator outlet out there. You can't sell "premium" out of the backseat of a Pinto. Would Louis Vuitton sell their bags at Wal-Mart? The bigger problem may be that the commoditization of coffee is unavoidable (uh, coffee IS a commodity by the way). The customer "base" is only a base if people have money in their pockets. In a market where almost 1 in 10 people is jobless, you can bet that premium coffee is on the short list of things to pass up. Bye bye base. Starbuck's has it rough—they want the perception of premium but they've developed the reputation of something much lower than that. Pitching against "low brow" competitors like McDonald's drops that perception even lower but what to do? Appealing to a premium minded base that has largely been dismantled by a floundering economy isn't going to magically make people decide that "premium" coffee is a top-priority. Take away: If there is so very much of something (16,000 stores), it can't possibly be that premium. It's going to be a hard sell this time around.
Permalink
By firekid San Francisco, CA June 12, 2009 03:04:29 pm:
Differentiating themselves from the competition based on qualities like healthcare and fair-trade doesn't seem like the wisest approach at this point for Starbuck's. The reality is that there isn't much difference about walking into a Starbuck's versus a McDonald's or Dunkin Donuts these days. The above comments uniformly voice complaints about what was once (and should still be) Starbuck's Holy Grail: the experience. Walking into a Starbuck's used to be like crawling into a blissfully warm, coffee-scented Snuggie. Now it's like pulling over at an Appalachia truck stop. Fix the experience. Clean it up. Fact is Starbuck's got too big, too greedy. Their appeal was perceived as intimacy. Now there's a Starbuck's in every grocery store, gas station and lowest common denominator outlet out there. You can't sell "premium" out of the backseat of a Pinto. Would Louis Vuitton sell their bags at Wal-Mart? The bigger problem may be that the commoditization of coffee is unavoidable (uh, coffee IS a commodity by the way). The customer "base" is only a base if people have money in their pockets. In a market where almost 1 in 10 people is jobless, you can bet that premium coffee is on the short list of things to pass up. Bye bye base. Starbuck's has it rough—they want the perception of premium but they've developed the reputation of something much lower than that. Pitching against "low brow" competitors like McDonald's drops that perception even lower but what to do? Appealing to a premium minded base that has largely been dismantled by a floundering economy isn't going to magically make people decide that "premium" coffee is a top-priority. Take away: If there is so very much of something (16,000 stores), it can't possibly be that premium. It's going to be a hard sell this time around.
Permalink
By Everett78 New York, NY June 12, 2009 04:58:33 pm:
Only ONE Dunkin Large Area developer is selling stores back and that is because they "listened" to Dunkin corporate and got into high rent structures and wasted lots of money. The market they are in is also saturated with mom and pop donut stores so the approach needed to be different but it was not. Every other LAD is doing very well and Dunkin is thriving in this recession. Starbucks will never reach the masses it once did since the days of paying $5 for a coffee are over. McDonalds will do well as long as it keeps pumping tens of millions into nationally advertising the McCafe's. Once they stop no one will go back since they are not that good and people do not associate a latte or cappuccino with a fast food hamburger. They do have the advantage in the number of locations nationally but they only have a limited amount of stores that have the McCafe's in them right now. Dunkin's huge expansion plans are second to none if they are strategically sound they can gain a huge market share as they move west and dominate not only the coffee market but the breakfast market as well.
http://adage.com/
Dunkin' led McDonald's and Starbucks in buzz and value perception. Brand Index, which tracks more than 1,000 brands by conducting 5,000 daily interviews from a panel of 1.5 million consumers, monitors key brand attributes, including buzz, value perception, quality ratings and customer satisfaction to compile its index (which has a range of -100 to 100).
Dunkin' began May with a 24, peaked at 33 mid-month and settled at about 32 this week. McDonald's started with a 15, peaked around 24 and had dropped off to 16 by June 9. Starbucks' campaign, which has been confined to newspapers and select outdoor markets in its initial phases, has been more cyclical. The company began May with a score of 1, shot up to 11 within a week and plummeted again. In the past week, the chain's buzz has shot up to double digits again.
Those numbers may seem low, but ratings vary dramatically by category. Within the fast-food sector, a good buzz rating is considered to be anything above 10. Ratings closer to zero mean consumers have heard an even number of positive and negative things about a brand.
"Over the last few weeks, Starbucks has generated buzz through a variety of channels, including our national 'Coffee value and values' campaign hitting its stride, beginning our sponsorship with 'Morning Joe' on MSNBC and being named No. 1 best coffee by the Zagat survey," Starbucks' senior VP-marketing, Terry Davenport, said in a statement. He added that the retailer's online activity, including using Facebook and Twitter to tout its efforts, has also built excitement among baristas in its stores.
Dunkin' did not immediately respond to a request for comment.
McDonald's spokeswoman Danya Proud said the burger chain has been "extremely pleased" with the results of its coffee push. In particular, she said, the chain's "McCafé Your Day" online competition with Visa has gotten more than 10,000 entries. That response rate makes it "by far the most successful online sweepstakes in the company's history," Ms. Proud said.
Starbucks tries 'a different tack'But all three companies got a pretty strong jump in buzz, said Ted Marzilli, global managing director at Brand Index. Starbucks' jump, he said, had the "highest magnitude," especially because it was coming from about zero. He said Starbucks should be heartened that it not only made a splash when its competitors were outspending it but got a second spike in interest as McDonald's and Dunkin' were leveling off.
"They're probably going to be outgunned by McDonald's and Dunkin'," he said, noting that those brands spend more on advertising. "Starbucks is trying a different tack in last couple of months, getting people to think about bigger concepts. How expensive is a $3 latte when you think about other things like providing health care, working with farmers in areas where coffee is imported? That slightly different tack seems to be making a mark."
Mr. Marzilli said an increase in buzz can trigger shifts in other metrics, but not always. And as it stands, Starbucks is still struggling with its "value" perception, or whether consumers view the brand as giving them the most bang for their bucks. The chain has been hovering around -26, with a small spike last week that seems to have already corrected. McDonald's is just behind Dunkin' in value perception, around 25 to Dunkin's 26.
But when consumers want to treat themselves, all these numbers may go out the window. According to Brand Index, 43% of adults asked where they were most likely to purchase a "premium coffee drink" said Starbucks, 15% picked McDonald's, 11% sided with Dunkin' and 31% had no preference.
5 Comments
By Rodney33 FRISCO, TX June 12, 2009 01:13:18 am:
Grande Distribution.Distribution has been overlooked in the "coffee wars." But it shouldn't, here's why;Dunkin' Donuts has launched plans to grow beyond their core markets in the NE and Chicago.This aggressive roll out was timed well as Dunkin' Donuts not only has premium coffee at a value price, but also large metro distribution and a strong breakfast food menu enjoyed by many of the same demos as Starbucks and differentiated from McDonald's menu.Dunkin's expansion was designed to grow new markets into a truly national network with a very loyal customer base that follows Dunkin' in markets where it has substantial distribution. Dunkin' carefully aligned with blue chip franchisees with stellar credit and cash on hand. Dunkin' did a good job of lining up favorable financing for their best new partners, so that those partners wouldn't have to tie up a lot of their own personal cash into market build outs, to encourage more aggressive expansion goals.But Dunkin's expansion credit crumbled. Some of their important franchisee partners have gotten out their contracts and are in the process of selling the stores they developed, simply because they cannot operate in large metro markets without substantial scale, which has been slowed or halted by the credit crunch.That leaves in a national coffee war, Starbuck's and McDonald's with Dunkin' a strong regional player in many core markets and expansion on a more distant horizon.McDonald's sales have surged in the recession, Starbuck's have nosedived. McDonald's doesn't need to open new stores, they are the heavyweight champion of distribution, they've built out McCafe's in a good portion of their footprint and they aren't closing many if any existing stores.Starbuck's, who also had heavyweight distribution, has been closing stores, lowering their prices on their super premium coffee and reducing their already weak food offering.The retrench moves by Starbuck's and their inability or willingness to expand their menu beyond core coffee drinks means McDonald's is easily the Grande of all things coffee, no matter how you order it.If Dunkin' can get their expansion financing and partners in order, they've got a good run in front of them, for they have alternative morning foods McDonald's has never done well with on a national basis - Donuts and Wraps, all of which also trump Starbuck's current go-to-market strategy.Starbuck's best hope is to take calculated risks and not cut back on distribution or the price of their coffee, but instead work on their food menu to offer differentiated, value priced food, through their distribution channel. Procter and Gamble uses price brands to drive category traffic and premium brands to deliver margins. Starbuck's could use value priced food in the same way to drive more traffic and use premium priced coffee to deliver their margins.The French bistro model and heavy distribution served Starbuck's well. Why can't the value priced French bakery, with super premium coffee all driven by sizable distribution? Rodney Mason, CMOMoosylvaniaThe Great State Of Designhttp://www.moosylvania.com/www.twitter.com/rodmoosewww.twitter.com/moosylvania
Permalink
By Rodney33 FRISCO, TX June 12, 2009 01:21:51 am:
Starbucks - not Starbuck's
Permalink
By firekid San Francisco, CA June 12, 2009 03:03:31 pm:
lity is that there isn't much difference about walking into a Starbuck's versus a McDonald's or Dunkin Donuts these days. The above comments uniformly voice complaints about what was once (and should still be) Starbuck's Holy Grail: the experience. Walking into a Starbuck's used to be like crawling into a blissfully warm, coffee-scented Snuggie. Now it's like pulling over at an Appalachia truck stop. Fix the experience. Clean it up. Fact is Starbuck's got too big, too greedy. Their appeal was perceived as intimacy. Now there's a Starbuck's in every grocery store, gas station and lowest common denominator outlet out there. You can't sell "premium" out of the backseat of a Pinto. Would Louis Vuitton sell their bags at Wal-Mart? The bigger problem may be that the commoditization of coffee is unavoidable (uh, coffee IS a commodity by the way). The customer "base" is only a base if people have money in their pockets. In a market where almost 1 in 10 people is jobless, you can bet that premium coffee is on the short list of things to pass up. Bye bye base. Starbuck's has it rough—they want the perception of premium but they've developed the reputation of something much lower than that. Pitching against "low brow" competitors like McDonald's drops that perception even lower but what to do? Appealing to a premium minded base that has largely been dismantled by a floundering economy isn't going to magically make people decide that "premium" coffee is a top-priority. Take away: If there is so very much of something (16,000 stores), it can't possibly be that premium. It's going to be a hard sell this time around.
Permalink
By firekid San Francisco, CA June 12, 2009 03:04:29 pm:
Differentiating themselves from the competition based on qualities like healthcare and fair-trade doesn't seem like the wisest approach at this point for Starbuck's. The reality is that there isn't much difference about walking into a Starbuck's versus a McDonald's or Dunkin Donuts these days. The above comments uniformly voice complaints about what was once (and should still be) Starbuck's Holy Grail: the experience. Walking into a Starbuck's used to be like crawling into a blissfully warm, coffee-scented Snuggie. Now it's like pulling over at an Appalachia truck stop. Fix the experience. Clean it up. Fact is Starbuck's got too big, too greedy. Their appeal was perceived as intimacy. Now there's a Starbuck's in every grocery store, gas station and lowest common denominator outlet out there. You can't sell "premium" out of the backseat of a Pinto. Would Louis Vuitton sell their bags at Wal-Mart? The bigger problem may be that the commoditization of coffee is unavoidable (uh, coffee IS a commodity by the way). The customer "base" is only a base if people have money in their pockets. In a market where almost 1 in 10 people is jobless, you can bet that premium coffee is on the short list of things to pass up. Bye bye base. Starbuck's has it rough—they want the perception of premium but they've developed the reputation of something much lower than that. Pitching against "low brow" competitors like McDonald's drops that perception even lower but what to do? Appealing to a premium minded base that has largely been dismantled by a floundering economy isn't going to magically make people decide that "premium" coffee is a top-priority. Take away: If there is so very much of something (16,000 stores), it can't possibly be that premium. It's going to be a hard sell this time around.
Permalink
By Everett78 New York, NY June 12, 2009 04:58:33 pm:
Only ONE Dunkin Large Area developer is selling stores back and that is because they "listened" to Dunkin corporate and got into high rent structures and wasted lots of money. The market they are in is also saturated with mom and pop donut stores so the approach needed to be different but it was not. Every other LAD is doing very well and Dunkin is thriving in this recession. Starbucks will never reach the masses it once did since the days of paying $5 for a coffee are over. McDonalds will do well as long as it keeps pumping tens of millions into nationally advertising the McCafe's. Once they stop no one will go back since they are not that good and people do not associate a latte or cappuccino with a fast food hamburger. They do have the advantage in the number of locations nationally but they only have a limited amount of stores that have the McCafe's in them right now. Dunkin's huge expansion plans are second to none if they are strategically sound they can gain a huge market share as they move west and dominate not only the coffee market but the breakfast market as well.
http://adage.com/
Friday, May 22, 2009
5 ways to leverage your happy customers
Referral Offers Your Customers Can't Refuse
A great product or service and inviting customer experience is essential to building a steady stream of referrals to your business.
Every startup entrepreneur hopes to build a solid and consistent stream of referred leads. To make this happen, you must provide a great product or service and a great experience, but that's often not enough on its own. To get the referral tap flowing, you also need to create compelling ways to stay top of mind with your referral sources and convince them to sing your praises. Here are referral tactics I've seen startups use successfully:
1. Expectation: This is the simplest tactic of all. During your lead conversion process, mention that "we know you're going to be so thrilled with our business that in 60 days, we'll check and make sure you're thrilled, then ask you to suggest three others who you know would love this result. Is that a deal?" Don't overlook the ease of how this works. It's powerful.
2. Gift certificate giveaway: Send a quarterly mailing to your customers and referral sources, offering a gift certificate of real value for your products or services. Tell the recipients that they're free to forward this to anyone they choose. Many customers want to refer you; this gives them something tangible to use in the process.
3. Nonprofit partner: Find a group you want to support, then propose several ways to create a deep partnership, such as a campaign that benefits your partner for every widget purchased this month. This kind of campaign is a win for all and can motivate your partner to introduce your promotion to his constituency.
4. A 100-percent refund: This one works because it sounds so good. When customers buy a fixed-price product or service, offer them a 100 percent refund on their purchase. All they need to do is give away four special cards to friends. For each of these cards that results in a new customer for you, your referral source gets a refund of 25 percent up to 100 percent. This is really just paying a commission for referrals, but it turns into a game with a nice marketing ring to it. Don't forget to take photos of all your 100-percent refund club members.
5. Secret price list: Another great way to earn referrals is to surprise your customers with a deal. Once they agree to a price, offer them a lower price if they provide referrals on the spot. I once worked with an electrical contractor who did this using postcards that the customer would fill out immediately, referring them to a friend.
A great product or service and inviting customer experience is essential to building a steady stream of referrals to your business.
Every startup entrepreneur hopes to build a solid and consistent stream of referred leads. To make this happen, you must provide a great product or service and a great experience, but that's often not enough on its own. To get the referral tap flowing, you also need to create compelling ways to stay top of mind with your referral sources and convince them to sing your praises. Here are referral tactics I've seen startups use successfully:
1. Expectation: This is the simplest tactic of all. During your lead conversion process, mention that "we know you're going to be so thrilled with our business that in 60 days, we'll check and make sure you're thrilled, then ask you to suggest three others who you know would love this result. Is that a deal?" Don't overlook the ease of how this works. It's powerful.
2. Gift certificate giveaway: Send a quarterly mailing to your customers and referral sources, offering a gift certificate of real value for your products or services. Tell the recipients that they're free to forward this to anyone they choose. Many customers want to refer you; this gives them something tangible to use in the process.
3. Nonprofit partner: Find a group you want to support, then propose several ways to create a deep partnership, such as a campaign that benefits your partner for every widget purchased this month. This kind of campaign is a win for all and can motivate your partner to introduce your promotion to his constituency.
4. A 100-percent refund: This one works because it sounds so good. When customers buy a fixed-price product or service, offer them a 100 percent refund on their purchase. All they need to do is give away four special cards to friends. For each of these cards that results in a new customer for you, your referral source gets a refund of 25 percent up to 100 percent. This is really just paying a commission for referrals, but it turns into a game with a nice marketing ring to it. Don't forget to take photos of all your 100-percent refund club members.
5. Secret price list: Another great way to earn referrals is to surprise your customers with a deal. Once they agree to a price, offer them a lower price if they provide referrals on the spot. I once worked with an electrical contractor who did this using postcards that the customer would fill out immediately, referring them to a friend.
Thursday, May 21, 2009
Mini Versions of Big-Box Stores
BOTHELL, Wash. — During the current economic downturn, as many companies are closing stores and cutting costs, it might seem counterintuitive to be opening new stores.
Not here in Bothell, around 20 miles northeast of Seattle, where in January, OfficeMax opened one of its three new concept stores in the Seattle area that offer a pared-down selection of its most popular products. Each of the new stores, called Ink Paper Scissors, covers only 2,000 square feet — about a ninth the size of a typical OfficeMax — and offers basics like copy-making supplies and printer-cartridge refills.
Retailers like OfficeMax are opening scaled-down versions of their stores or inventing outlets entirely to test new concepts without a hefty investment. The stores are a relatively safe bet despite the recession because the space is cheaper and the stores require less inventory, fewer employees and smaller spaces.
OfficeMax is not the only retailer giving new concept stores a try. Most are significantly smaller than their typical stores and focus on one set of products. Last year, for example, Wal-Mart opened four specialty food stores in the Phoenix area, RadioShack unveiled three high-end wireless shops in Dallas, and Best Buy created 30 mobile phone stores.
“If you’ve got the wherewithal, everyone is thinking about smaller sizes,” said Lee Peterson, vice president for brand and creative services at WD Partners in Columbus, Ohio, which has helped retailers design these stores.
More small-format and new-concept stores are likely to be on the way as retailers try to lure customers back, according to a survey of retailers, manufacturers and consultants. Nearly 46 percent of the respondents said they expected the number of formats to increase in the next five years, according to a survey in February by Dechert-Hampe & Company, a marketplace management consultancy.
The stores are opening even as some companies are declaring bankruptcy, closing stores and reporting double-digit earnings drops. As the economy contracts and consumers tighten their spending, more closings are likely. In March, the most recent data available, Americans were saving 4.2 percent of their income, after taxes, up from 0.2 percent a year earlier, according to the Commerce Department.
“Obviously, it’s not an optimal time,” said Ryan Vero, OfficeMax’s chief merchandising officer. “But this makes for a great test — it can’t be any worse.”
Smaller formats also allow companies to enter new markets in urban or rural areas that they had bypassed during the boom. They can get into a market, test a new concept and get out quickly if it doesn’t work.
The Lowe’s Companies, the home repair giant, has been hit hard by the housing downturn and has cut its new store openings to 60 to 70 this year, from 115 last year. But the company, which is based in Mooresville, N.C., is also experimenting with scaled-back stores in new markets. Lowe’s has slowed its plans to open stores in the hard-hit states of Florida, Arizona and California, and is aiming at the Midwest and rural communities far from its warehouse stores.
Last year, Lowe’s opened two scaled-down versions of 66,000 square feet and 80,000 square feet. An average Lowe’s store is 117,000 square feet.
Many retailers don’t want to cease opening new stores altogether during the downturn, because doing so could harm future earnings. It can take up to three years to develop and open a store. But opening during a recession can position a retailer for success when the economy turns.
“Retailers have pulled back the reins somewhat, but they’re not going to pull back entirely,” said Daniel Butler, vice president of retail operations at the National Retail Federation in Washington.
Smaller stores are also cheaper and less risky. An average Lowe’s costs $20 million to $22 million to build, not including inventory. Smaller stores save the chain an average of almost 10 percent, or $1.9 million, per store.
They also can attract new customers who might be put off by larger stores or consumers who shop mostly online. Downsized or concept stores are more convenient and take less time to visit than a large store. Lines are typically shorter, and the shopping aisles can be easier to navigate.
In some ways, retailers are going back to their roots, evoking the corner store. At many new stores, personalized service is being emphasized, like explaining the features of a product.
“Consumers want stores that are more convenient, less time-consuming and more personal,” said Ben Ball, senior vice president at Dechert-Hampe & Company. “There is such a thing as too much variety.”
Best Buy is aiming to lure people away from their computers and into their new Best Buy Mobile stores with a selection of 90 cellphones and service plans from nine carriers.
Most of the stand-alone shops are 900 to 1,200 square feet, versus 40,000 square feet for a big-box Best Buy. Some 3,000-square-foot versions have also opened. Best Buy now has 40 stand-alone stores and plans more.
Best Buy is focusing on the cellphone and smartphone market because the segment is expected to keep growing and the company needs to shore up flagging earnings. Best Buy’s goal is to have 10 percent of the country’s cellphone market, up from about 3 percent now.
“We’ve been in the mobile business for years, but despite our best efforts, we haven’t been able to make much impact in cellphones,” said Scott Moore, vice president of marketing for Best Buy Mobile.
RadioShack is also eyeing the wireless market. In December, the company opened three Point Mobl stores in the Dallas area; they carry smartphones, among other electronics items. Each store is 1,500 square feet, or about the size of a typical RadioShack. The new stores do not mention the parent company.
Retailing professionals doubt the experimentation with store formats is over. “It’s a very liquid time for retailers,” said Mr. Peterson at WD Partners. “ ‘Let’s try it’ is now the mantra.”
Not here in Bothell, around 20 miles northeast of Seattle, where in January, OfficeMax opened one of its three new concept stores in the Seattle area that offer a pared-down selection of its most popular products. Each of the new stores, called Ink Paper Scissors, covers only 2,000 square feet — about a ninth the size of a typical OfficeMax — and offers basics like copy-making supplies and printer-cartridge refills.
Retailers like OfficeMax are opening scaled-down versions of their stores or inventing outlets entirely to test new concepts without a hefty investment. The stores are a relatively safe bet despite the recession because the space is cheaper and the stores require less inventory, fewer employees and smaller spaces.
OfficeMax is not the only retailer giving new concept stores a try. Most are significantly smaller than their typical stores and focus on one set of products. Last year, for example, Wal-Mart opened four specialty food stores in the Phoenix area, RadioShack unveiled three high-end wireless shops in Dallas, and Best Buy created 30 mobile phone stores.
“If you’ve got the wherewithal, everyone is thinking about smaller sizes,” said Lee Peterson, vice president for brand and creative services at WD Partners in Columbus, Ohio, which has helped retailers design these stores.
More small-format and new-concept stores are likely to be on the way as retailers try to lure customers back, according to a survey of retailers, manufacturers and consultants. Nearly 46 percent of the respondents said they expected the number of formats to increase in the next five years, according to a survey in February by Dechert-Hampe & Company, a marketplace management consultancy.
The stores are opening even as some companies are declaring bankruptcy, closing stores and reporting double-digit earnings drops. As the economy contracts and consumers tighten their spending, more closings are likely. In March, the most recent data available, Americans were saving 4.2 percent of their income, after taxes, up from 0.2 percent a year earlier, according to the Commerce Department.
“Obviously, it’s not an optimal time,” said Ryan Vero, OfficeMax’s chief merchandising officer. “But this makes for a great test — it can’t be any worse.”
Smaller formats also allow companies to enter new markets in urban or rural areas that they had bypassed during the boom. They can get into a market, test a new concept and get out quickly if it doesn’t work.
The Lowe’s Companies, the home repair giant, has been hit hard by the housing downturn and has cut its new store openings to 60 to 70 this year, from 115 last year. But the company, which is based in Mooresville, N.C., is also experimenting with scaled-back stores in new markets. Lowe’s has slowed its plans to open stores in the hard-hit states of Florida, Arizona and California, and is aiming at the Midwest and rural communities far from its warehouse stores.
Last year, Lowe’s opened two scaled-down versions of 66,000 square feet and 80,000 square feet. An average Lowe’s store is 117,000 square feet.
Many retailers don’t want to cease opening new stores altogether during the downturn, because doing so could harm future earnings. It can take up to three years to develop and open a store. But opening during a recession can position a retailer for success when the economy turns.
“Retailers have pulled back the reins somewhat, but they’re not going to pull back entirely,” said Daniel Butler, vice president of retail operations at the National Retail Federation in Washington.
Smaller stores are also cheaper and less risky. An average Lowe’s costs $20 million to $22 million to build, not including inventory. Smaller stores save the chain an average of almost 10 percent, or $1.9 million, per store.
They also can attract new customers who might be put off by larger stores or consumers who shop mostly online. Downsized or concept stores are more convenient and take less time to visit than a large store. Lines are typically shorter, and the shopping aisles can be easier to navigate.
In some ways, retailers are going back to their roots, evoking the corner store. At many new stores, personalized service is being emphasized, like explaining the features of a product.
“Consumers want stores that are more convenient, less time-consuming and more personal,” said Ben Ball, senior vice president at Dechert-Hampe & Company. “There is such a thing as too much variety.”
Best Buy is aiming to lure people away from their computers and into their new Best Buy Mobile stores with a selection of 90 cellphones and service plans from nine carriers.
Most of the stand-alone shops are 900 to 1,200 square feet, versus 40,000 square feet for a big-box Best Buy. Some 3,000-square-foot versions have also opened. Best Buy now has 40 stand-alone stores and plans more.
Best Buy is focusing on the cellphone and smartphone market because the segment is expected to keep growing and the company needs to shore up flagging earnings. Best Buy’s goal is to have 10 percent of the country’s cellphone market, up from about 3 percent now.
“We’ve been in the mobile business for years, but despite our best efforts, we haven’t been able to make much impact in cellphones,” said Scott Moore, vice president of marketing for Best Buy Mobile.
RadioShack is also eyeing the wireless market. In December, the company opened three Point Mobl stores in the Dallas area; they carry smartphones, among other electronics items. Each store is 1,500 square feet, or about the size of a typical RadioShack. The new stores do not mention the parent company.
Retailing professionals doubt the experimentation with store formats is over. “It’s a very liquid time for retailers,” said Mr. Peterson at WD Partners. “ ‘Let’s try it’ is now the mantra.”
US: DPSG launches 7UP holiday promotion
Dr Pepper Snapple Group has launched a promotion for its 7UP brand in the US offering consumers an opportunity to win a seven-day retreat.
The "Seven Dias de Sevenisima" contest, running from 18 May through 2 August nationwide will see nine winners receiving a week of "easy living", including prizes such as a family vacation, and gift cards that can be used for home cleaning service and a shopping spree.
Consumers can enter online at www.sevenisima.com or at participating retailers in select markets.
Rene Sanchez, associate brand manager for 7UP, said: "We're offering fans of the ultimate lemon-lime flavor of 7UP the opportunity to enter the contest for a chance to win 'seven days' of fun prizes for their families."
The brand has teamed-up with singer/actress Denise Gonzalez, who will perform a song titled "Sevenisima" which will be featured in the Spanish-language TV commercials shown exclusively on Telemundo. G
Gonzalez is also featured on the Sevenisima campaign's website and will make appearances at local market events.
The "Seven Dias de Sevenisima" contest, running from 18 May through 2 August nationwide will see nine winners receiving a week of "easy living", including prizes such as a family vacation, and gift cards that can be used for home cleaning service and a shopping spree.
Consumers can enter online at www.sevenisima.com or at participating retailers in select markets.
Rene Sanchez, associate brand manager for 7UP, said: "We're offering fans of the ultimate lemon-lime flavor of 7UP the opportunity to enter the contest for a chance to win 'seven days' of fun prizes for their families."
The brand has teamed-up with singer/actress Denise Gonzalez, who will perform a song titled "Sevenisima" which will be featured in the Spanish-language TV commercials shown exclusively on Telemundo. G
Gonzalez is also featured on the Sevenisima campaign's website and will make appearances at local market events.
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