Darrin C. Duber-Smith
Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, Inc., and senior lecturer at the Metropolitan State University of Denver’s College of Business. He has almost 30 years of specialized expertise in the marketing and management profession including extensive experience in working with natural, organic, and green/sustainable products and services. He was a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market/industry model and was leader of the first U.S. industry task force that helped frame the Natural Products Association’s definition of natural (c. 2005). He has published over 80 articles in trade publications and has presented at over 50 executive-level events during the past 15 years. A frequent media contributor and recipient of The Wall Street Journal’s In-Education Distinguished Professor Award in 2009 and WSJ’s Top 125 Professors Award in 2014, Mr. Duber-Smith is author of Cengage Learning’s “KnowNow! Marketing” blog at http://community.cengage.com/GECResource2/info/b/marketing/. He can be reached at DuberSmith@GreenMarketing.net or firstname.lastname@example.org.
The National Hockey League, a collection of puck-chasing millionaires from around the world who play on 30 teams in the U.S. and Canada, is moving closer to allowing two cities to pursue new franchises. Both Quebec City, a hockey-crazed community north of Montreal that lost its beloved Nordiques franchise to Colorado back in 1995, and Las Vegas, a city with only one professional team (AAA baseball), are vying for the opportunity to develop new NHL franchises. That Quebec City is applying is not surprising, since the primary reason the Nordiques moved was financial and not fan-related. A team should do very well in that capitol city. But Vegas?
That Las Vegas is being considered by a major professional sports league at all is noteworthy. Leagues have long been reticent to expand there due to the presence of legal sports betting in the area, but it looks like attitudes are finally changing. Perhaps the proliferation of online betting (still illegal in the U.S.) as well as fantasy sports (legal) have helped this transformation along, but it is likely that a team in Vegas will be wildly successful as yet another entertainment option in the city and a major vehicle for the NHL brand. Las Vegas after all is a very global city. And the market is full of residents who are clamoring for more pro sports as well as replete with millions of visitors who just can't wait to spend their disposable income. What's not to like? Sports betting is legal in Canada and it is likely that it will eventually be legalized outside of Nevada here in the U.S. in the not-too-distant future, so concerns that gambling might somehow adulterate a team playing in Vegas seem more absurd all the time.
Clearly the league will agree to both expansion plans, and the teams should be playing as soon as 2017. How the teams will be branded is another story. Will Quebec try to recreate the old franchise by using the name, logo, and colors? What will a pro team in Vegas look like? Let's see what happens.
A recent Gallup poll revealed that Millennials who have recently graduated from university are much less likely than older graduates to think that getting a degree was worth the time and money. Among all graduates in the sample of 30,000 individuals only 50% strongly agreed that their degree was worth the cost. Why is this happening?
The study's architects believe that the main cause of this prevailing attitude is student debt, which has risen astronomically over the past 20 years. Recent graduates are faced with the brutal reality of having to begin paying the note, and this can be unsettling when people are having difficulty finding entry level career positions. And those with over $25,000 in debt are much less likely to attend graduate school, which is important for so many undergraduate degrees. The all-too-common result is that many students, instead of being patient, resort to taking decent-paying (but nevertheless relatively dead-end) server jobs, in order to generate cash flow. Many of these people remain in the industry throughout their 20's and 30's, effectively wasting the formative career years that are some important in making your education work for you. Others move back home and stay for several years, delaying the inevitable and important process of becoming a productive adult. Either way, the value of the degree is in question by far too many people, but the alternative (trying to make something out of your K-12 diploma) is a grim proposition.
I would postulate that it is also possible the nature of the degree is a large factor in customer satisfaction. Those with degrees in fields such as business, computer science, engineering, and the hard sciences typically have less difficulty finding career-path jobs than do the individuals who choose less rigorous degree programs. Is is possible that the typical engineering or accounting graduate might be happier than the person with a psychology degree? Which graduate, all other things being equal, is most likely to attract a better employment situation? Remember that students are customers too, and education is probably the most important product most of us will ever buy. Perhaps it's time for young adults to put a bit more consideration into what they want to study and ultimately what they would like to do with their degrees. Where you go to school is not nearly as important as what you study. And this thought process should probably happen at the beginning of one's college education, not at the end or after it's all been said and done. Perhaps a change in how we approach college will lead to fewer psychology, sociology and communications graduates, but ultimately it might result in a greater level of overall customer satisfaction among graduates. What you study matters now more than ever.
Beer is no longer a man's drink, if it ever really was. And if there is any question that the age of large-batch light beer might be ending, one need only look at the incredible growth of the craft beer category. Weight watching it seems is being rapidly replaced by exercises like the 12-ounce curl, as young adults drive the national obsession with food and drink. Of course, this is bad news for our overall national well-being, but it is excellent news for makers of small batch beer. And more excellent news? It isn't just dudes doing the drinking.
Recent research by Nielsen showed that women drank a full 32 percent of the craft beer consumed nationally last year, and another report showed that women in Denver drank almost 45% of the craft beer consumed in that thirsty hipster haven. Wow! This is a significant shift in the behaviors and attitudes of women in previous generations who have long considered drinking beer to be a largely calorie-rich, gas-inducing, alcohol-laden, unladylike activity more appropriate for the less graceful sex. Well, let's dispense with that kind of thinking. Craft beer is a rapidly-growing $20 billion industry, and a third of the market is no small potatoes. In addition, the U.S. is now seen as the global leader in beer innovation. Take that Belgium and Germany! And so since it is unlikely that this trend will abate or reverse itself any time soon, marketers must take heed and adjust targeting and creative strategies accordingly. And although the proliferation of brewers has made it likely that the crowded industry will experience a shakeout fairly soon, market demand insures that the beer will be flowing for quite some time.
After a two decade period of remarkable growth, the nutritional supplement category flirted with maturity for a while during the economic downturn and then, surprisingly, resumed its meteoric growth. Indeed there seems to be no end to the consumer's appetite for vitamins, minerals, herbal supplements, and functional foods; and so various powders, tablets, capsules, tinctures, foods and beverages laced with functional ingredients have been developed over the years to address the need in the market. The result is an $88 billion global category (growing 50% faster than over-the-counter drugs) that, despite regulatory threats, shows no signs of abating.
Of course, there is no substitute for healthy living, but some people want more control over their health and many supplements do have clinical properties. So most Americans see no harm in consuming these largely safe and rather pricey products, and in many cases they are seen as "magic bullets" that prevent and/or treat medical conditions. Threats from regulators loom however, as the 1994 law establishing the product category as a middle ground, distinct from both foods and drugs, has come under fire. Simply put, there are too many bad actors out there selling bogus "snake oil", and more alarmingly some products have been found to be so adulterated as to be unsafe for consumption. On the other side, regulators like the FDA have been reticent or just unable to enforce many of the law's provisions. The product content and label claim guidelines in the law are fairly straightforward, but there has been much abuse in both areas.
What will happen in the future? For now, probably nothing. The law was challenged at its onset and has been a point of contention for over 20 years. The FDA, among others, doesn't have the resources to deal with any but the most egregious offenders, and the Act of Congress is unlikely to be repealed. Sadly, self-regulation by the industry itself has been largely ineffective. Apparently, there is simply too much money being made. But what would happen if there were a major event wherein many people were harmed by a supplement? Or perhaps more than one incident? Might public perception change in such an instance? Often it does take a major "wake up call" to change the direction of a juggernaut like the supplement industry. In the meantime, the billions keep rolling in.
Websites and apps are really two different approaches to Internet marketing, and users are now spending a growing majority of their time using mobile apps rather than visiting websites. However in a bit of a paradox, data show that even though this is true, websites are still attracting larger audiences. A study by comScore, Inc. said that mobile devices now account for 62% of all time spent online and 44% of that time is spent on smartphone apps, up from 33% two years earlier. That's significant growth. But what about the paradox?
An app isn't really "the Internet" as we understand it, but rather a sort of "walled garden" wherein the marketer can take you wherever he/she desires. Apps are essentially dead ends whereas the Internet is an endless array of connections, so it shouldn't be very surprising that the audience for mobile websites is 2.5 times larger than that of mobile apps. Websites are connected to one another after all, while apps tend to be very limiting by design, so this ease of linking is what is causing the aforementioned paradox. Regardless of all of this, it is clear that apps are becoming more ubiquitous. At what point will there be too many apps? How many icons do you really want on your phone? Will more apps be connected to one another at some point in the near future? Will there be an easier way to organize your mobile apps? These are only a few of the important questions digital marketers must ask themselves, and the answers will be forthcoming very soon.
It doesn't get a whole lot worse than lying to your stakeholders and then getting caught doing it. But that's exactly what happened to Volkswagen when the company admitted to having programmed some of its vehicles with the express purpose of duping emissions testers into thinking the vehicle is emitting much less than it truly is. And in an age of environmental and social activism, this might be a long-term problem for the brand.
It was a breach of public trust to be sure, but some experts are speculating that this deceptive practice might not be limited to VW, and that there might be other perpetrators in the automotive industry as well. This of course remains to be seen, and if other manufacturers step forward, the negative effect on the VW brand will be lessened dramatically. But if the German car-maker is the only guilty party, the company's brand will surely suffer damage that will take many years to repair. But Jack In the Box came back from a massive e coli scare and Firestone recovered nicely from its own exploding tire issues, so it is clear that brands have quite alot of staying power after all. Admitting to mistakes and taking corrective action (the first steps management took in controlling the damage) are a good start. A BP-style advertising blitz apologizing and begging for a second chance might be an appropriate next step. Let's see what happens.
Unless you are living under a rock (or in North Korea), you might have heard something about the growth of the organic products category. Indeed the growth of Certified Organic goods outpaces the growth of non-organic products in every category, and it seems that there is no end to consumer demand for organic. But even though record numbers of consumers desire beef raised to USDA Organic standards, lack of supply might become a serious issue. What gives here?
It's all about the price of beef. Growers of mainstream beef are currently enjoying record profits as a prolonged drought has lowered the number of steers that a ranch can sustainably raise, which is a condition that has caused prices to skyrocket. What this means is that the expensive and time-consuming conversion from conventional to organic, although very profitable in the long run, is somewhat less attractive in the short run when ranchers are already making plenty of money. And so the higher price points they could charge if they went organic aren't nearly as tempting right now as they were before the drought. So in considering that overall beef consumption is on the rise and that the drought caused supply to dwindle and prices to increase, it is easy to understand the dynamics in play. We know that there isn't much a marketer can do about conditions in the natural environment affecting supply and demand. But what is instructive is that if the demand for organic beef continues to increase and the supply remains the same, the prices of organic beef will likely skyrocket, which in turn will probably cause to demand to drop again. The market strives for equilibrium. A simple lesson in economics to be sure, but it's one that a marketer must never forget.
The decline of baseball here in the U.S. has been slow and steady, and while it remains an extremely popular sport among certain demographic segments, MLB attendance has been slowly dropping, and the newly-built stadiums have been getting progressively smaller as a result. But in South Korea, baseball is attracting increasingly larger crowds most notably among college students, young professionals and women. What gives?
Well it's not the game so much as it is what some observers have termed "sportainment". Sure they play baseball, but the crowd is more interested in cheerleader dance routines, slapping ubiquitous thundersticks, and other "fun" activities that most American baseball fans would find terribly annoying at the very least and insulting to the game of baseball at its most extreme. But the show certainly plays in South Korea where fawning young female fans in particular have made young male players into rock stars, and so the game's appeal has shifted from those who appreciate the sport itself (largely older men) to those who want a venue with lots of entertainment options and opportunities to socialize with friends. Sound familiar? While sad for baseball purists, this is good news for baseball marketers who have struggled with flagging interest. And honestly, sportainment has long been a working formula for minor league baseball teams as well as franchises in "novelty sports" such as indoor lacrosse and arena football, as these events have become a multi-tasking fan's dream come true. Millennials (aged 17-35) in particular have been identified as a generation that desires lots of entertainment and social interaction, but it's important to remember that this sort of thing is generally considered to be distracting to previous generations. Yet, the next generation is likely to want even more of these things, so marketing the sport requires a delicate balance. Perhaps South Korea isn't the only place where this sort of affinity can be developed, and maybe with some alterations, the game of baseball can become truly global after all. Perhaps such an effort can increase interest in the sport here in the U.S. Indeed, marketers should be watching what is happening across the Pacific with great interest.
Innovation in the post-Steve Jobs era has been predictably difficult for Apple, but this incredibly profitable giant as struggled to garner much momentum from any of its other new products, and as such it has relied on global iPhone sales for the growth it needs. While a revamped iteration of two of its sluggish product lines (the iPad and Apple TV) are now in the introduction phase, it seems that these offerings are merely continuous innovations of previous products, and won't generate the growth that shareholders demand. What are Apple marketers to do?
It's tough for a brand to maintain relevance across generations, but some such as Nike and Disney have managed to do it. Others, like Coca Cola and Microsoft are struggling. Apple is obviously far from being a troubled brand, but indeed the best days of this brand may be behind it. The products are priced at a premium and competitors are at the gates offering similar products for lower prices in every category. How long can a brand be expected to run on the fumes of its brand equity? Indeed a reliance on continuous iterations of previous products is surely an issue, but a brand with this much equity can easily turn things around. It is likely that there needs to be a major management shakeup, and some new blood might be just what the doctor ordered for the folks in Cupertino. Innovation comes from new ideas and over the past several years since the death of Mr. Jobs, who led with an iron fist, new ideas have been rather elusive. Hype will only get a marketer so far, and Apple must come up with something new if it is to defend its rightful place as one of the greatest technology companies of our era.
The food revolution just got more interesting with the announcement by McDonald's that it would alter its supply chain and will cease using chickens raised in cages in favor of the "cage-free" variety. The company, which buys 2 billion eggs annually in the U.S. alone, in doing so will dramatically alter the way chickens are raised, as competitors follow suit and suppliers are forced to change the way they do business. In short, this is a very big deal.
And this move comes on the heels of several announcements lately by a host of companies regarding the removal of artificial ingredients, antibiotics, and other nasties in favor of more natural and humane solutions. Suppliers of these birds, which typically live only six weeks before they are re-appropriated, will certainly need to allocate more space to supply the same number of chickens so this will certainly be a burden for chicken growers upstream in the supply chain. But we know that ultimately it's consumers who drive these sorts of trends and marketers must adjust to changing attitudes and market conditions. As for McDonald's, this is all part of its re-branding effort, and the move could certainly make for some interesting (perhaps even amusing?) advertising. Clearly this most recent shift in the food industry has been a massive one, and indeed it seems that the movement will be a sustainable one. The egg industry, for one, will never be the same.
Let the consolidation begin. A sure sign of a maturing industry is when some of the big companies begin to buy some of the smaller companies, and perhaps craft beer is one of those industries whose imminent maturation may be near at hand. After all it's been humming along in the high growth phase of the Product Life Cycle for 40 years or so. The party can't last forever even with all that beer. And if recent announcements are any indication, the future may be now. MillerCoors is just the latest beer giant to add to its craft beer ("craft" is loosely defined as less than 6 million barrels sold annually) portfolio as it has acquired Saint Archer Brewing Company of San Diego, CA. The company only produces 35,000 barrels a year currently, so imagine what the brand can do with the widespread distribution that MillerCoors has. And of course this is exactly the point. Large companies wait for a brand to get some momentum, and then they cherry pick the best brands in hopes of leveraging distribution and other efficiencies to gain market share.
As such, Anheuser-Busch InBev has acquired four craft breweries so far this year, and Heineken NV just announced that it is acquiring a 50% stake in Lagunitas Brewing Co., which is already the sixth largest independent brewer in the U.S. Selling a small brand for millions of dollars is exactly what many entrepreneurs have in mind when they start companies, and many entrepreneurs who don't necessarily want to sell out realize that it's too tough to grow a brand without large-scale distribution. And that's where the major players come in. Plus, larger companies can run these smaller brands as independent business units so that the integrity of the product as well as the "craft beer" branding can be maintained. It looks like this recent flurry of activity is only the beginning in the craft beer segment.
Fresh ingredients are a good thing, and Chipotle has made a large fortune winning the Burrito Wars by differentiating its offering primarily on that particular point. It even worked for Subway (for a while at least). But when 17 of its locations in Minnesota were linked to dozens of of food-poisoning cases, we were reminded that fresh ingredients, when not handled properly, can also be a bad thing.
State officials are investigating 45 cases of salmonella infection and they do know that at least 32 of those folks ate at Chipotle. Thus far, the media have been suspiciously quiet about all of this, which is probably why you haven't heard much ado. The company, in good form, issued a statement saying that it has already made supply chain adjustments out of caution, rather than wait for a government edict. Smart PR. And the incident is unlikely to have much of an effect on the brand in the long-term, as this sort of thing can (and does) happen to just about anyone. Good damage control is crucial even before much publicity has been generated, and Chipotle has made all the right moves.
The War on Salt is finally here. The New York City Board of Health, as expected, has decided that it will require chain eateries in the city to put salt shaker emblems on menus, tagging dishes that have more than the recommended 2,300 milligrams (one teaspoon) of sodium. That's one teaspoon. Of course the plan was praised by health advocates and also panned by food producers and restaurant owners as "misguided". But more information theoretically leads to more informed consumer decision-making and we do have national guidelines on the matter, so is this move an appropriate one for a city to make? Will it be too much of a burden on businesses? Does the available science indicate that consuming this amount is bad for people? Will the regulation force food producers to formulate healthier products?
Indeed state and municipal efforts to regulate sugar, and in the case of NYC to initiate an outright ban on sugary sodas over 16 ounces, have largely failed across the nation. Neither voters nor courts have been sympathetic to the cause thus far. The businesses certainly hate this sort of thing, but it will be interesting to see if there will be some form of backlash among the people of New York in this instance. If so, the whole thing will likely end up in court.
Another example of the Young Millennial's obsession with quality and value-added perks can be seen in the area of student housing. Gone are the days of living in 200 square foot rooms with roommates and eating in the university's version of a "mess tent". Over the past decade or so, this has been replaced by a choice of several rooms as well as roommate formats and a complete revamp of the food service function. But that was so five years ago. Now student-housing providers, faced with an increasingly choosy bunch of customers, are having to take their game to the next level.
To address these shifting attitudes, big student-housing companies are teaming up with companies to offer all sorts of additional services. From discounted concert tickets to Uber and Lyft rides, it seems that there is no end to the number of services marketers could offer young college students. And corporate marketers are eager to get in on the action and reach this young demographic as these young people begin to form consumer buying habits and brand preferences. The whole thing costs the housing providers nearly nothing as marketers know that this sort of market access is worth paying for and are now looking at student housing as a viable medium for reaching young consumers (and for some marketers a necessary part of their integrated marketing communications mix).
The last post dealt with a study that exposed some common myths about why so many students aren't attending their university's football games. The jist of the findings was that sports marketers must change their mindset if they are to reach the very youngest of this important age cohort. Here are some ideas:
1. Expand opportunities for them to socialize at the stadium. Party decks and other common areas are important and have already been incorporated into many professional venues, but so is an engaging tailgate pre party to build affinity and excitement prior to the contest. Those of age should have the opportunity to drink inside the stadium rather than overdoing it in the parking lot. The presence of upper classmen will encourage lower classmen to attend.
2. Enhance social media presence. Instead of spending time watching television as previous generations have done, young Millennials opt to spend time using various social media outlets and sharing experiences. The university must have a robust presence on social media.
3. Mobile is first. News, highlights, and other communications must be short, sweet and fairly frequent. Allowing for user generated content is (unfortunately) a must.
4. Video is king. Most Millennials prefer video as a medium for communication, and it now accounts for half of all mobile traffic.
5. Personalization. Communications must be customized and individuals must have some control over what they do and do not receive. Opportunities to meet players, cheerleaders, etc., should be available so students feel even more connected with the experience.
It all sounds so obvious, but sports properties, both at the professional and amateur levels, are having varying degrees of success dealing with the new reality. The last of the Millennial generation will be finishing high school and entering college over the next few years and another generation will take its place. What if anything will change? And if there are major changes in generational psychographics (behaviors and attitudes) what form will they take? The answers to these important questions are, for the time being, elusive.
Recent research has revealed that the decline in student attendance we have seen at college football games over the past several years has been grossly misunderstood. This is very important mainly because in order to fix a marketing problem, one must first properly understand it. Research often reveals findings that are counter-intuitive, and this is a perfect example of this phenomenon. Four major myths have been revealed in this important research conducted by AECOM:
1. In-home viewing is the biggest competition with the live experience. Actually research revealed that young fans prefer a live event that they can experience with friends. In-home viewing can't compete.
2. The latest Wi-Fi technology is essential to keeping students interested. Research showed that the availability of the latest technology is not a significant factor in a student decision whether or not to attend a game.
3. Sporting events are too long and the Millennial attention span is too short. When one looks at multi-day music festivals and their popularity, it is hard to justify this assertion, but festivals give attendees much more flexibility for creating an individual experience.
4. Millennials don't care about sports. For the younger generation watching sport is about identity, social connection, meaningful affiliation, fun, social sharing, and excitement. The game itself? Not so much. Millennials want access to players, coaches, the field, etc.
Indeed, this does sound a lot like the usual lamentations of the most overly-social, self absorbed, most entitled generation in history (nothing is ever good enough, it seems), but there are certainly ways that marketers can address some of the more actionable wants. The recent proliferation of party decks, swimming pools, and other social areas within facilities is certainly a good example. And although these findings are indeed interesting, research findings are most credible when they are duplicated. If another study comes along that confirms these findings, it would make me feel better about the results. Nevertheless, it is a bona fide study and it reveals that marketers may not be making the right assumptions with regard to an entire generation. Remember that the next generation (yet to be named) is finishing high school right now, so perhaps these student attitudes will change over the next several years as this new generation begins to garner attention. How different they will really be from previous generations remains to be seen.
In a rather large re-positioning effort, luxury car maker Jaguar has announced that it no longer wants to be what it calls "a high-priced outlier" and that it is therefore cutting its list prices to be more competitive in the luxury category. This is essentially an admission by marketers that they have priced the brand too high in the past and that lower prices will help the company achieve higher volume and more market share. As a result, Jaguar will lower its price points on existing models as well as offer a much cheaper model for about $35k. So I guess we can wave could by to the rather snooty TV advertisements where they teach us how to properly pronounce the name? Is any of this good strategy?
Maybe and maybe not. Mercedes tried such a move many years ago and the result was a cheapening of its brand image (brand dilution) as well as a loss of high-end vehicle market share to upstarts like BMW and Audi. But, if Jaguar can't sell enough expensive cars and make enough money perhaps market development is a good strategy. The brand might have to be diluted as a matter of course in its life cycle, and expanding market share in the low-end luxury car market could satisfy shareholders and the marketers that set the objectives. Snooty ads aside, this has been a tough decision for marketers at Jaguar to make, and it will certainly be interesting to see whether or not this foray into the unknown will be effective for the brand. Stay tuned.
Software maker Intuit is sponsoring its second annual competition among small businesses, the winner of which will receive a free 30-second spot during next year's Big Game. The PR move is generating some publicity, which is really the point, while at the same time demonstrating that the company cares about the small businesses it serves. And the prize, a 30-second ad spot, will be worth $4.5 million next year which is no small potatoes to a small business, and average folks can place votes for the winner at smallbusinessbiggame.com.
It looks like it worked out well last year when marketers tried the ploy, and last year's winner was GoldieBlox, a toy for girls. But I must confess that I do not remember the spot. And that's really the problem with this sort of promotion, as well meaning as it may be. Most brands gain very little from the placement of one advertising spot, even one that enjoys the amazing reach that the Super Bowl offers. Marketers must supplement such an ad not only with additional ads, but also must integrate these ads with other elements of the marketing communications mix such as sales promotion and direct marketing. It is highly unlikely that GoldieBlox and so many small companies just like it, while thrilled with the awesome opportunity, had the means to adequately leverage last year's effort with additional marketing activities, and the single ad it placed will likely pass unremembered into history, as so many others have done. This year's winner will fare no better, and to me it makes more sense for Intuit to somehow tie the competition to some sort of social or environmental initiative or perhaps some performance-based metrics for the winner rather than leave it all to a popularity contest. But voters can provide the desired web traffic that advertisers crave, and so getting the public involved was almost certainly a well-thought-out strategic move. Also remember that since Intuit is not a sponsor of the NFL, it cannot use the term "Super Bowl" in its promotions. Let's see what happens this year.
As expected, McDonald's announced on Tuesday that beginning October 6th, the company will begin serving breakfast all day, all across this great nation of ours. Overwhelming market research coupled with a highly successful test marketing campaign has resulted in this major strategic shift for McDonald's. Of course this won't solve the brand's ongoing problems with slow service and food quality perception, but it will bring in more business which is what the struggling giant needs right now.
In related news, Burger King has called Mickey D's to the carpet and has challenged the company (via full page ads in the Chicago Tribune and New York Times) to call a one day "cease fire" in support of Peace One Day, a not-for-profit organization campaigning to raise awareness of the United Nations' Peace Day on Sept. 21. For one day only the fast food rivals would co-market the "McWhopper" which would be sold exclusively for one day through a special pop-up store in Atlanta. It's a PR gimmick for sure, and also a rather cheap shot by Burger King. How will McDonald's respond to this challenge? The company doesn't want to be accused of not supporting a cause like world peace, but it probably doesn't want to be forced into anything by a major rival either. Yet, such publicity would be good for both companies. What would you do?
Because of the negative publicity surrounding Subway's former pitchman Jared Fogle, most marketing experts have assumed that a change in creative strategy is imminent, and indeed marketers at the sandwich chain have wasted little time in making changes. In advertising, the first step in making a major change to an advertising strategy is often to change agencies. As such, Subway has decided to outsource the advertising function to Omnicom Group BBDO, a rather prolific agency. Although Subway has cut ties with Mr. Fogle, the man appeared in over 300 commercials and was the face of the company through a large number of in-person appearances, consumers associate the man with the brand. Now that we've had 15 years of Jared, how do marketers make us forget what they have spent so much money teaching us?
It's not easy to do when a brand has relied so much on one individual to represent it. But changing ad agencies is an excellent first step, and the company says that the Fogle incident had nothing to do with the decision, that the company was going to make this move anyway. Yeah right.... nevertheless the creative strategy must change. Should they find a new spokesperson? Hire a celebrity endorser? Create a "spokescharacter" as GEICO and others have successfully done? Should the creative strategy be humorous or elicit some other emotional response, or better yet should it be rationally-based and focus on the products themselves? There is no doubt that hese are trying times for a brand that has been struggling the past few years, and the next strategic marketing moves could in part determine its future in the fast food industry.