Marketing Horizons Newsletter Nov. 2005 Real Life Examples Ronald McDonald Gets a lifestyle Change


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Marketing Horizons Newsletter Nov.2005

Real Life Examples

Ronald McDonald Gets A Lifestyle Change
Topics: Trends, Positioning, Consumer Behaviour
Ronald McDonald appeared in a TV ad in June, snowboarding and skateboarding and dressed in a sporty version of his trademark yellow suit. The popular icon for the fast-food giant seems to be having an identity crisis. There were no French Fries to be seen in sight. McDonald’s executives are branding the icon as “an ambassador for a balanced active lifestyle”.

Nearly every aspect of the company’s new marketing strategy centres on health. Customers can now substitute bottled water and apple slices for soft drinks and fries or skip the bun and get a lettuce-wrapped burger.

McDonald’s also has hired as consultants Oprah Winfrey’s personal trainer Bob Greene and best-selling author and nutritionist Dr. Dean Ornish to help design fitness programs and promote good eating habits.

McDonald’s strategy is a major shift in marketing that if successful, could help redefine fast food.

Question to Ponder

  1. Do you think that McDonald’s is on the right track with its new marketing strategy?

Rebranding Issues

Topics: Brand Equity, Product Modification, Positioning

Scott Paper, a division of Montreal-based Kruger Inc. uses the name Cottonelle on its toilet tissues and ScotTowels on its paper towels. These brand names are licensed from U.S. company Kimberly-Clark. The latter wants to end this agreement with Scott paper by 2007 and possibly reintroduce the Cottonelle and ScotTowels brands at that time.

Scott Paper is dealing with the situation by renaming the Cottonelle brand Cashmere and the ScotTowels brand SpongeTowels. The strategy behind the Cashmere brand is to say that it is softer than cotton, therefore usurping Cottonelle’s brand strength when it is reintroduced in two years.

Question to Ponder

  1. Think back to a similar situation in which Procter and Gamble’s Charmin originally used another name. Can you think of the name? (answer Royale)

Video Content on the Web Growing
Topics: Advertising, Audience Fragmentation, Trends, Consumer Behaviour

We are seeing more and more video content on the Web along with advertising. This means that the Web will likely compete with TV for viewers.

In the U.S., CBS News revamped its website and now features ad-sponsored, free video news clips. AOL recently broadcast the global Live 8 concerts to an online audience of more than 5 million people. Video search services offered by Google, MSN, and Yahoo helped provide online users with nearly real-time coverage of the London terrorist bombings.

Web users who watch videos are aged 25 to 44, comfortable with downloading online content and are increasingly wealthy. Fifty-four percent of people who have watched Internet video during the past year have an average household income of more than $50,000.

Question to Ponder

  1. Ask the students how many of them have watched online video?

Toshiba’s New DVD Format Close To Winning Battle

Topics: Product Differentiation, Innovation, Consumer Behaviour

Microsoft Corp. and Intel Inc. are backing Toshiba’s high-definition DVD format instead of Sony’s Blu-ray format. This may prove to be the death knell for Sony’s format.

The announcement is almost a replay of a similar battle two decades ago when Sony’s Betamax format lost out to its VHS rival as the video standard.

Microsoft favours the Toshiba’s HD-DVD format because it enables consumers to legally make a copy of the disc onto their hard drive—be it a personal computer or a consumer electronic device with a hard drive. The Blu-ray Disc Association, in which Sony is a member, will not commit to allowing consumers to make legal copies of discs. Intel prefers the HD-DVD format because it is more consumer- friendly, allowing people to play old discs on the HD-DVD players.

Stale Product gets Pepsi Employee Fired

Topics: Ethical Behaviour

Here is a true story about a wrongful dismissal case which brings up the differences in expectations between employers and employees. Pepsi Cola employees have to follow an unshakeable rule: no consumer must ever see a stale-dated product on any store shelf. Donald Chester a 20-year route representative delivered Hostess Frito Lay products (owned by Pepsi) to retail outlets. Pepsi expected Chester to ensure its products were removed from stores before their best-before date expired. Most of the time, Chester honoured Pepsi’s rule, but occasionally he slipped up.

Pepsi made it perfectly clear what it expected and the consequences if Chester failed. When his superiors performed their spot checks, they detected 39 bags of stale chips. Chester was dismissed. Chester then commenced a claim for wrongful dismissal and won. The Saskatchewan trial judge reviewed Pepsi’s expectations and found that the standard Pepsi expected of Chester was neither reasonable nor attainable. Chester was awarded 14 months of severance pay plus his cost of suing. The court continued that perfection is a laudable goal but not likely attainable by many.

Question to Ponder

1) Do you feel that the verdict was the correct one in this case?

Marketing Trivia Quiz

(Answers at the end of the quiz)

  1. North America’s third largest ice cream maker is CoolBrands, a Canadian company. Last year, the company lost its liscence to produce what brand of frozen treats?

  1. McDonalds is changing its retail employees’ uniforms. What rapper group is helping them out with the design?

  1. Does The Source have the same owners as was previously called Radio Shack or is it a brand new company?

  1. What is a Podcast?

The Correct Answers Are:

  1. CoolBrands lost the liscence to produce Weight Watchers Smart Ones branded frozen treats.

  2. Rapper Jay-Z will help in designing the new uniforms.

  3. The owner is the same which is InterTAN. It owns the 874 stores across Canada which were previously called Radio Shack. The company lost its right in a battle with the American company Radio Shack (a completely separate company) to continue using the Radio Shack name under liscence.

  4. Podcasting which is amateur broadcasting on the Internet is becoming popular. Podcasts allow consumers to be their own programmers. The amateur broadcasts can be downloaded onto any digital music player including the iPod.

Roughly 1.8 million Canadians have already downloaded a podcast or another form of Internet audio file.

Marketing Magazine Article

Below you will find an interesting article from Marketing magazine. At the end of the article, I have added a question for your students to ponder.

October 03, 2005


I want my MP3



As the digital lifestyle accelerates, proven PR tactics can help marketers head in the right direction


Technology and pop culture are newlyweds, but their union has spawned a product category so quickly, most marketers are still figuring out how to nurse the baby segment into a healthy revenue stream.

The aptly named offspring is the digital lifestyle, and it's more than a mere product category, it's a way of life. Geek has never been more chic, and sales figures indicate it's a burgeoning phenomenon: 2004 North American sales for electronics hardware (DVD players, game consoles, TVs) were US$108 billion.

Marketers of digital lifestyle products face an interesting conundrum: How do you score a big win in the more profitable mass market without offending your key product influencers, the hard-core early adopters?

This question pits two fundamental rules of marketing directly against each other: "Deliver consistent messaging in all communications materials," versus "Know your audience and communicate directly to them." As a highly customizable part of the marketing mix, public relations can help marketers transcend these conflicting rules to reach both early adopters and mainstream purchasers.

Remember, Jon and Jane Dough don't buy "technology." They don't want to understand what a megabyte is, they just want something that looks cool and plays music, or video, or games, or all three. The critical mass of consumers are fashion conscious, fad hungry and fickle.

On the other side of the coin, early adopters are tech savvy and passionate about discovering new products. They excel at spreading word of mouth kudos and generating grassroots excitement. Their feedback helps marketers fine tune products and strategies early on to achieve maximum success in the marketplace. Given their leadership, early adopters often serve as a market barometer and are critical to a brand's long-term viability. In today's information economy, digital lifestyle marketers ignore early adopter concerns at their peril.

You simply can't direct the same messages through the same media and expect to reach both early adopters and mainstream purchasers. Think about the guy who bought an iPod back in 2001 when it was first released compared to the guy who picked it up during last year's holiday season when the music player was widely proclaimed as the must-have holiday gift. Marketing to these people in the same way just doesn't work.

A well-executed, strategic PR plan can help digital lifestyle companies target the relatively few early adopters while delivering the media coverage and brand awareness necessary to convince the mass market that it's safe to buy.

The beginning of the product life cycle is the time to woo early adopters. Get them on board with subtle tactics like online teaser campaigns to build anticipation and momentum. Involve them in beta testing programs so they can feel like part of the design process. Turn them into product evangelists by welcoming their feedback.

Early adopters are the people most likely to have Web pages and blogs, and online communication amplifies the effects of word of mouth. In fact, the Internet has helped word of mouth transcend mere gossip to become a powerful marketing tool. The blurring lines between traditional media outlets and online postings has turned several early adopters into pseudo-reporters-another reason why seeding this group with product early on is crucial. Developing relationships with them is equally important. Marketers must be responsive to their needs and answer their questions, as their influence and audience reach can often rival mainstream daily newspaper outlets. Earning good reviews from these key influencers will do wonders for your marketing efforts, and help ease the transition to the mass market.

Catching consumer attention without alienating early adopters is extremely difficult, but not impossible. Microsoft's TV introduction of the next-generation Xbox console was geared to the mainstream by featuring Lord of the Rings actor Elijah Wood, but was also preceded by weeks of online speculation and leaked insider information about the product in the early adopter community.

Most mainstream buyers want something that's proven and fits their lifestyle. They want technology to be painless and easy, not just loaded with features and benefits they barely understand. With digital lifestyle products they're looking for an emotional experience, whether it's sharing photos or listening to music or downloading their favourite movie. Marketers need to target the mainstream with promotional campaigns that encourage consumers to make a cultural statement in their choice of devices. Celebrity endorsement, product placement in the latest TV ratings winner, paid promo deals with rappers to get product shout-outs, and good old mainstream news coverage are just a few of the strategies companies are using to get noticed.

As the digital lifestyle accelerates, some major computer and consumer companies may not make the turn. New leaders will emerge, and established brands will either become digital visionaries, or also-rans that missed the opportunity.

The critical mass of consumers are fashion conscious, fad hungry and fickle

JUSTIN CREALLY is senior VP and partner at High Road Communications in Toronto

Question to ponder

  1. Using the information in the above article, give a profile of early adopters and compare that group to mainstream purchasers.


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