al berrios IMKTG REPORT 12.10.02: Beverage, Retailing; more…

THIS WEEK'S CONTENTS ARE:
[1] JUST SAY IT: Overview and High-Lights
[2] BRANDSTRATEGY: "New Marketing" For Beverage Marketers
[3] CONSUMERFOCUS: al berrios & co. Executive ConsumerFocus Panel
[4] MEDIA: The Death of Family-Values Programming
[5] MANAGEMENT: Deciding The Best Retail Strategy


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[1] JUST SAY IT: Overview and High-Lights

>> "This economy breeds opportunity." Katherine Legatos, Market Development Director, Victoria Secret Beauty, when asked about her thoughts on the state of the current economy at the al berrios & co. Executive ConsumerFocus Panel.

Good morning execs,

What a week! Big snow, resigned Economic team, a confused economy, weapons in Iraq, a consumer-focused executive panel hosted by my firm, AOL's new strategy (which you knew two weeks ago), and mammoth UAL goes bankrupt (but pays a consulting firm $1.5 million a month to come up with a viable business strategy that most people already know)… how can anyone sleep!

Today, I'm covering ideas in beverage marketing, television programming, and retail strategies that have come from my firm. Enjoy.


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[2] BRANDSTRATEGY: "New Marketing" For Beverage Marketers

You know those 5-cents or 10-cents refunds you are entitled to when you recycle a bottle or can of your favorite beverage? Have you ever taken advantage of it? What if they gave you 25-cents instead? Has the value of this program ever been assessed to the consumer? These type of recycling programs were government enacted "bottle bills" meant to curb pollution in the 1950s and 70s. The money comes from taxpayers and was meant to encourage bottlers to help clean up their own mess. The benefit to society is obviously less pollution. But the programs are very back-shelf with little obvious support from the brands or the consumer.

BOTTOM LINE: Brands could get involved, reallocating a percentage of their marketing budgets to increasing the amount of the refund. Why increase the refund? For years, the refund amount has been fixed, with little to no understanding of consumer perception of value of the program. Sure pollution from one-way containers has been incredibly reduced, but intense market competition by brands has created a mentality that the only way to increase business is to increase frequency. There's an entire generation that is being targeted by promotions encouraging them to drink more to win prizes. If beverage marketers are doling out fortunes to bribe its drinkers with a trip to space, they can definitely consider a "micro-rebate" to its drinkers, too. This program may automatically change consumer behavior by getting them to recycle more, and more importantly, making them more brand loyal (to the marketer that provides the greater value). This loyalty may not get translated into frequency at the store counter, but it doesn't matter since it will assure a huge increase in market share.

READ MORE:
http://www.container-recycling.org/
http://www.bottlebill.org/
http://www.nrc-recycle.org
http://grn.com/
http://www.earth911.org/master.asp
Is a National Bottle Bill Worthwhile?
California Issues Container Recycling Grants

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[3] CONSUMERFOCUS: al berrios & co. Executive ConsumerFocus Panel

Last week, we hosted another intimate, exclusive panel showcasing another pair of distinguished executives: Isabel Rivera, Executive Producer, "Latin Access" and Katherine Legatos, Market Development Director, Victoria Secret Beauty. The topic covered were what works with consumers.

BOTTOM LINE: The Hispanic audience is the new "flavor of the month" according to last week's Adage. However, programming for this audience is mostly Spanish-language. (Editorial: I suppose it doesn't occur to TV execs that Latinos immigrate to the U.S. to escape their countries, not be reminded of them every time they turn on the TV.) Daring producers, like Isabel Rivera, produce English and Spanish language content with the acknowledgement that like her, many first and second generation Latinos prefer their content in English, but with content based on familiar, Latin subject matter. To this end, she considers her responsibility to her audience when working with advertisers in product integration deals. Although ad-clutter presented a love/hate situation, (pays the bills/overwhelming viewers), both agreed that creativity, based on an intimate understanding of the audience, is what helps every idea break through. We heard from Victoria Secret Beauty that "this economy breeds opportunity" meaning that innovation is important, however, a good strategy is based on whether it works or not with the consumer. Every idea must have an opportunity, but if it doesn't work the first time, it doesn't get implemented the second time. With any retailer, unlimited consumer feedback is important to drive business, with customer retention at the forefront of its list.

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[4] MEDIA: The Death of Family-Values Programming

Ever heard of PAX TV? These guys are the 7th network, carried on a UHF signal, the equivalent of AM, except on TV. Their entire business model is based on wholesome family-values programming. Even some cartoons don't qualify to be on this network. So why hasn't it become more popular with today's audiences?

BOTTOM LINE: Oddly enough, let's start with the toy business. Mattel's Barbie is the #1 young girls brand in the world, yet, they've been changing Barbie's image to a more edgy, independent character to meet the competition posed by a new line called Bratz, quickly capturing the hearts of the 7-11 yr old market (which Barbie has been unable to reach.) As you can see, it starts young. As kids grow older, they discover MTV can fulfill their fantasies with programming like "Jackass" and "Osbournes". Now, look at the "Sopranos". The series is so successful, ABC wants to re-run it on its air (sans HBO-esque gratuity) and NBC will air a similar story in March, (with a Latino drug lord as the lead). No nudity, cursing, or blatant drug use, but it's intended to be a little less wholesome than what you'd historically find during prime time. Though "Osbournes" and "Sopranos" are family based, the family-values aren't quite the same as what we used to see in "Growing Pains" or "Different Strokes". In our al berrios & co. Media Habits of Beverage Drinkers Study, September 2002, we discovered that in this society, the concept of family is still important with 83% of consumers A16-24. Church/religion is important with 65% of this same group. However, we also discovered that the most top favorite artists, comedians, and programming are essentially vulgar and unwholesome. A culture has shifted. This leads to the conclusion that businesses like PAX exist merely because the law permits them to. Advertisers hesitant to explore consumer's anti-family-value sentiment must take the risk. There are advocacy groups for everything, but it's that 20% that's going to keep you in business.

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[5] MANAGEMENT: Deciding The Best Retail Strategy

Toys R Us is not doing so great. Wal-Mart is. Home Depot is. RadioShacks in malls are. Amazon.com (finally) is. So, should you be a Discounter, Category Killer, Mall-based retailer, or an E-tailer? Every retailer understands their category and what they offer consumers: Discounters offers value. Category Killers offer selection. Malls offer convenience. Online offers all three. But what seems to escape retailers are the changing consumer perceptions and behavior towards retailers. And by understanding that, you can be successful in your category.

BOTTOM LINE: What ails Toys R Us, also ails Kmart, and it's not the death of a retail strategy, but rather poor brand promises. (There are financial issues as well, but this is a consumer POV newsletter). al berrios & co. believes that the success of a cat-killer is based on products that consumers don't need to spend too much time with to choose. If we remember how valuable time is to consumers, then we begin to realize that making them look too long is not as good as it is traditionally believed to be. Making things easier to find in a cat-killer will allow them to get what they need and move on to the next cat-killer. The other logic supporting this is consumer price sensitivity. Remember, greater selection isn't just about what suits a need best, but at the best price. And with all the selection cat-killers provide, the process of weeding out the best prices is not just time consuming, but exhaustive. Shoppers don't spend Black Friday shopping because they want to, but because the have to. Discounters have always known this, and now merchandise similar-use products together and limit brands to the best prices. And the mall concept is a really big version of what you'd expect to find in a discounter: many products merchandized next to each other, the difference is, each product is managed by it's own brand. The mall simply contributes the "Main Street" on which traffic can comfortably shop, the interaction with other shoppers being an essential part of the process with both discounters and mall-based retailers. So if e-tailing solves all issues inherent in offline retail categories, why hasn't it taken off? It's not that it won't be successful, it's that it's another choice waiting for another generation to become hooked on it. I personally don't believe that the web was meant for e-tailing, but rather, an eBay auction model. Regardless of which model becomes dominant in the next decade, by understanding how your consumers shop, your retailing strategy will succeed.

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Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.

 

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