Consumer Understanding Chapter Three Overview

Consumer Understanding The basic core of all marketing. Finding consumer needs is our job. Not wishes, not wants……needs. Honor Thy Consumer

Many Ingenious Methods for Consumer Learning Focus Groups Surveys Mall Intercepts Test Markets Sales Data In-Home Testing Phone surveys Internet surveys Purchase diaries

Most Research Is Flawed Methodology Presupposing the answers. Poisoning the well. Asking the wrong questions. Timing. Market forces.

Armour Hot Dogs What do you as a consumer think about Armour Hot Dogs? What brands do you think are the competition? How do you think they fare? Who’s the target audience?

Armour’s Reality Target Audience is Mom’s with kids ages 12 and under. (60% of all volume). Low involvement category for Mom – she just buys what’s on sale. Doesn’t perceive much difference between brands. Key competition is Ballpark and Oscar Meyer.

Armour’s Research Consumers say they want a good tasting hot dog. Product development team now working on a flavor upgrade. Will it work?

The New Rules of Marketing 1 st Law of Marketing Physics OVERT BENEFIT – What’s in it for the customer? Customers will maintain established behaviors until they come in contact with a benefit so overtly appealing it compels them to action.

2nd Law of Marketing Physics REAL REASON TO BELIEVE – A new idea will hit the market with a customer appeal equal to the strength of its benefit multiplied by its reason to believe. Benefit and Reason to Believe are of equal importance.

3rd Law of Marketing Physics DRAMATIC DIFFERENCE – The only way to disrupt marketplace equilibrium is to introduce a benefit-and-reason-to- believe combination significantly different from what already exists.

Armour Knowledge Mining Taste Perception is #1 (but all food products fall into this trap – remember Citrus Hill). Quality associated with brands Ballpark Oscar Meyer Nathan’s Everybody else is lumped together in the “generic” brand category -- price is the only differentiator. No magic bullet in this category like there was in OJ.

Armour is Cooked Don’t count on the product improvement to generate incremental sales and save the brand. Need to offer Mom’s a reason to pick Armour (other than low price.) What’s the benefit?

Creating Intellectual Competitive Advantage Use your brain and analyze everything. Store shelves. Promotions by different brands. Cross-promotions. Advertising. Packaging copy. Ask around and look around.

Don’t Assume Anything The old saying applies: “When you assume, it just makes an ass out of both u & me.” Look, Listen, Learn.

The View From Your Cubicle Sucks Get out of the office and into stores! This has to become an obsession (you’ll be surprised how much you actually learn!). Case histories prove the value (Pooh).

Ringling Bros. & Barnum and Bailey Circus Attendance was in a ten-year steady decline. Lost most of the historical “stars”. Obsessed with advertising “the hook”, a single new act in the show.

Focus Groups Mom’s felt that taking their kids to the circus would be a good family activity Virtually all had gone as a kid themselves, but didn’t feel a sense of urgency to go “this year”. They’ll get around to it sometime.

New Positioning “No childhood would be complete without a ringside seat to the Greatest Show on Earth.” Almost doubled attendance with the new campaign.

Tricks of the Trade There are very few original marketing ideas. The best way to be brilliant is to steal somebody else’s idea and twist it into something new that works for your brand.

Armour Needs To Give Mom’s A Reason To Buy Can’t disrupt market equilibrium with product improvement (Mom’s won’t notice or care). Need to appeal to them with a unique benefit – in this case, a promotion that’s different, better and special.

Armour Idea Stolen from Disney’s “I’m Going to Disneyland” sports campaign and “Willie Wonka and the Chocolate Factory” Golden Ticket. Inside packages of Armour Hot Dogs look for your Golden Ticket to win a family trip to Disneyland to spend a day hosted by Roger Clemens, Derek Jeter, Ken Griffey Jr., or Sammy Sosa.

Appeals to Mom on Two Levels Disneyland / Disney World are the #1 vacation destinations for families with kids 12 and under. (70% plan to attend in the next 24 months). Dad and older kids would dig meeting the All-Star baseball players (and Armour already has them all under contract and is looking for a way to use them effectively).

Straw Poll Research at Brighter Child 60% of Mom’s (base of 125) said they’d buy Armour Hot Dogs instead of their regular brand if they saw that promotion on the package or advertised. For a brand with only 7% market share, that’s a home run!