Friday, 20 January 2017

Aldi, Lidl and the grocery price war

Aldi and Lidl, two German-based discount supermarkets, are gaining UK market share through a seemingly never-ending price war against the local grocery retailers that once dominated the industry.

Consumer behaviour suggests that cash-strapped shoppers aren't completely returning to pre-recession buying patterns but continuing to seek out bargains and stretch their pounds in certain product categories.

Today, Aldi and Lidl are so well-known that these grocery names topped You.Gov's recent BrandIndex, exceeding the brand ranking of the BBC, John Lewis and other leading brands.

Lidl's newest strapline is Big on quality, Lidl on price, calling attention to its competitive strengths. For several years, Lidl has steadily increased its market share, and 2016 was its best UK holiday trading period ever.

Aldi is promoting its pay packages for staff, showing that employees make more than the minimum wage and putting pressure on rivals to increase pay as well--adding to the goodwill its brand enjoys. Like Lidl, Aldi's 2016 holiday trading period was its best ever in the UK, with higher market share as a result.

How will Tesco, Morrison's, Sainsbury's and John Lewis fight back in 2017?

Sunday, 15 January 2017

Maltesers, Braille and shrinkflation

A new poster ad for Maltesers, made by Mars, is entirely in Braille--quite a novelty and a way of recognising a portion of the population that can't access traditional advertising.

Model Maltesers were used to spell out, in Braille, this message at one London bus shelter: 'Caught a really fast bus once, turns out it was a fire engine'.

Maltesers has a long-running ad theme #LookontheLightSide and this bus-shelter ad is part of the inclusiveness campaign as well as celebrating World Braille Day. More than 1.5 million people like the Maltesers Facebook page, where this photo was posted.

Meanwhile, Mars is reacting to higher commodities costs by shrinking some of its products. Malteser 'sharing' packages will contain 15% less than today but sell for today's price.

What Mars has done by reducing the contents of the Malteser package is part of a trend dubbed 'shrinkflation'. Mars competitor Mondelez recently changed the shape of its Toblerone chocolate so it contains less chocolate but sells for the same price as before, to avoid increasing the retail price.

Other chocolate marketers are also deciding between reducing the amount of product and raising the price. Because so many consumers are so price sensitive, shrinking the product may be more acceptable to buyers than increasing prices...for now.

Wednesday, 11 January 2017

Consumer behaviour and the 'big night in'

Marketers have identified a trend in recent years, based on evolving consumer behaviour such as saving money and making time for family. The trend is towards planning a 'big night in' instead of a traditional 'big night out'.

Rather than splashing out on a restaurant meal and cinema tickets, many consumers are making plans to enjoy food and entertainment at home. Pizza, anyone? New Year's Eve was a 'big night in' this year for consumers in Wales, research shows.

Targeting this occasion, Sainsbury's and other marketers, offer snacks, drinks and more. Above, Sainsbury's online store, with a 'big night in' page offering 'easy cook' meals, snack foods, DVDs and video on demand. Poundland wants to attract shoppers interested in snacks for a big night in, whether the entertainment is a movie or a sleepover.

'Big night in' is influencing multiple marketing elements. For example, snack products are increasingly packaged in larger sizes for family sharing. 'Generally, the packaging is bold and often piggy-backs a cinematic theme as families try to create a movie going experience without actually leaving home', says one packaging expert.


Wednesday, 4 January 2017

The latest in McDonald's marketing

McDonald's is always cooking up something new to market. It's just redone its McCafe brand look, as shown above, for a more upmarket, posher image. In fact, the fast-food chain will switch to all-sustainable coffee beans by 2020.

McCafe is challenging Costa and Starbucks and all the others selling gourmet and special coffees in the UK. Also, to be an integral part of local UK communities, the McDonald's site has a special section on grassroots football. Did you see McDonald's holiday advert, featuring Juliette the vintage wooden doll? Fun.

In addition, McDonald's just opened a fast-food outlet a few steps from the Vatican--touching off a controversy. In response to negative comments, the company announced: 'As is the case whenever McDonald’s operates near historic sites anywhere in Italy, this restaurant has been fully adapted with respect to the historical environment'.

BTW, McDonald's UK is highly social: 68m Facebook likes, hundreds of thousands of Twitter followers and lots of videos on YouTube. Working hard to engage customers!

Sunday, 1 January 2017

Mind the gender price gap

Last year, price policies made headlines with disclosures that functionally equivalent products like razors and blades were priced higher for women than for men. Boots took action within weeks, reviewing its pricing with and making changes, with the statement:
This review has reassured us that for Boots own brands the two reported examples, Boots disposable razors and Botanics eye roll-on, are indeed exceptional cases which do not completely meet our principles and we are taking action to correct these prices.
Now Tesco has also changed its pricing so razors cost the same for men as for women. It said: '...following an internal review and discussions with our suppliers, we have acted on concerns about the difference in price of our female and male disposable twin-blade razors, in line with our commitment to ensure consistently low, simple and affordable pricing.'

In 2017, more retailers are likely to follow this model and eliminate the gender price gap (sometimes known as the pink tax) so that functionally equivalent products are priced the same, regardless of whether the target market is male or female. But this same pricing trend is not as widespread among hair stylists. How many other product categories will move toward gender-neutral pricing in 2017?

Thursday, 29 December 2016

Unilever's unstereotype initiative

One of the most notable of 2016's marketing initiatives, according to Campaign Live, has been Unilever's #Unstereotype campaign, headed by the company's SVP of global marketing, Aline Santos.

Unilever's research revealed the need to make changes in how its brand advertising depicts people. Among the brands affected by this new change is Axe (also known as Lynx). Santos explains: 'The stereotype of men that we been portraying for years isn't relevant any more. Not only was it not relevant, it wasn't right.'

In June, 2016, Unilever posted the following about its #Unstereotype initiative:

Gender identity is changing. Our advertising has not changed enough – up until now. We've listened to consumers and looked at the way we portray gender in our advertising and realised we need to do things differently. We understand that by using our influence responsibly, we can contribute to positive cultural change as well as making better connections with people through our advertising. That's why we've asked every one of our brands to challenge itself to move away from unhelpful stereotypical portrayals of gender, especially for women, and to deliver fresh campaigns that are more relevant to today’s consumer. We call this movement #UNSTEREOTYPE – and it is already making a difference.
The #Unstereotype campaign resonates in an industry where stereotyping is often in evidence (especially in advertising messages to or including women). In fact, Kantar Futures head J Walker Smith says this is the way of the future:
The advertising and marketing industry has got a lot of ground to make up to simply project a realistic, contemporary picture of female identity, so keeping up with and pre-empting its evolution will be no easy task. The good news is that Unilever has now shown that it pays dividends, and that those brands brave enough to move their strategy forward have a great opportunity for growth, disruption and creativity.

Sunday, 18 December 2016

Preventing 'success disaster'

Message on Hatchimals website in December, 2016
A Google product expert--one of the team behind the new artificial-intelligence Google Translate technology--recently spoke about the need to prevent success disaster. That's a situation in which an organisation lacks the practical capabilities to meet high demand for a product.

In other words, suppose something new like the revamped Google Translate is tested and adopted by a large number of users. The result would be a strain on Google's network unless it planned, in advance, for an extended, sustained surge in usage. Meaning new processing equipment and new networking equipment. Which Google did, in fact, install prior to revamping Google Translate this year.

Family Search, the free genealogy website, also understands the potential for success disaster. As more people worldwide become interested in family history and post names and photos on Family Search's databases, the organisation has arranged for flexible cloud computing services to keep operating at peak demand.

Now think about the potential for success disaster at Christmas time. Weeks ago, well before the peak of holiday shopping, Hatchimal toys were already out of stock in many stores. Even though the company shipped additional inventory during December, it recognised that some children were going to be disappointed by not having Hatchimals under the tree in 2016. The message shown at top was a pop-up on the company's home page in mid-December.

Admittedly, predicting the popularity of a new toy (actually, predicting consumer behaviour towards purchasing the new toy) is quite a challenge. But even LEGO, with its long history of sales analysis, wasn't prepared for worldwide demand in 2015. No wonder LEGO 's top executive says: “If you make a decision in product design, you need to mirror it in manufacturing.” That is a major step towards preventing success disaster.