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    Published on: October 9, 2008

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    Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the art of retail website design.

    Brand Week had a piece the other day about cause-related marketing, noting that something called the 2008 Cone Cause Evolution Study “found that 79% of respondents said they would switch brands (provided price and quality were equal) to the one that is associated with a good cause.”

    In addition, according to Brand Week, “eighty-five percent of respondents said they have a more positive image of a company when it supports a cause they care about. The same percentage said it was acceptable for companies to promote their affiliation with nonprofit organizations in their ads. And, 38% have purchased a product associated with a cause in the last year.”

    Additional studies conducted about this subject have demonstrated that, indeed, products associated with causes can see stronger sales increases than equivalent products with no such association.

    There may be no better example of cause-related marketing than the Newman’s Own line of products, which a quarter-century ago was created for the express purpose of funding a wide variety of charities. Actor Paul Newman, who started the project with writer AE Hotchner, probably had no idea how varied. By the time he died late last month from cancer, Newman’s various food products had donated more than a quarter-billion dollars to charity. And all the time he remained good humored about his efforts, deeming them “shameless exploitation in the common good.”

    I can tell you from personal experience – and I’m sure a lot of other people feel the same way – that buying his products did give a sense of doing some good. It made buying spaghetti sauce about more than just buying spaghetti sauce. A purchase was as much about values as value.

    And it didn’t hurt that the products tended to be very, very good.

    I see press releases all the time from companies that are associating themselves with a variety of causes – everything from breast cancer awareness to heart health. And I have to say that while I have not calculated or quantified it, my impression of the food industry is that it is filled with people and companies that are extraordinarily generous.

    While it somehow seems inconsistent with the act of charity to publicize it, in this case I don't think so. Telling people what you are doing with regard to various charities gives visibility to the cause…and in the end, that’s what you’re trying to do. The fact that it can be good for bottom line is just gravy.

    There have been a lot of stories on the news in recent days, as the economy falters and none of the headlines seem positive, about how it is widely expected that charities are going to really suffer because of events over which they have no say or influence. If people have less money, the reasoning goes, they will have less to give.

    While some of this is inevitable, I suspect that we may be surprised by how generous people manage to be, even in tough times. Companies may have to restructure their charitable activities to some degree, but I’m guessing that we’re still going to see plenty of “shameless exploitation in pursuit of the common good.”

    It is in times like these that we find out what people and companies are made of. I don't think we’re going to be disappointed.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: October 9, 2008

    • Tesco’s Fresh & Easy division in the US reportedly has opened three new stores in the Las Vegas market, with three more slated to open in the area next month – which will bring the Fresh & Easy presence in Las Vegas to 25.

    "We're proud to have opened in so many different types of neighborhoods throughout Las Vegas," said Fresh & Easy CEO Tim Mason in a prepared statement. "With every store we open, we create more local, competitive jobs and bring quality food at great prices to the neighborhood."

    Fresh & Easy now has a total of 93 stores open in California, Arizona and Nevada.

    KC's View:
    All this despite the skepticism on the part of a lot of people about whether the Fresh & Easy stores are delivering the kinds of returns that Tesco anticipated…

    I was talking to a well-placed industry observer the other day (who has no dog in this hunt, as far as I know), and he told me that many of the Fresh & Easy units are doing just fine…not runaway successes, necessarily, but solid performers that have brought something different to the areas in which they operate. This analyst suggested that Tesco’s central thesis is to pursue behavior-based demographics, not age or income or ethnicity based demographics…and that this is allowing Tesco to create higher loyalty levels than some might think.

    It also was suggested to me that Tesco is taking advantage of real estate availabilities and a cheap dollar as it opens so many stores – and that the long term play is simply to get as many of these things operating as possible, and tweak them later.

    Published on: October 9, 2008

    Safeway CEO Steve Burd has been presented with the 2008 SPIRIT Award, “for his leadership in furthering employment and workplace opportunities for people with disabilities,” by the US Department of Labor.

    According to the company, Safeway currently employs nearly 10,000 people with intellectual and physical disabilities including hearing and sight impairments, and Burd has been at the forefront of this hiring philosophy while also urging other employers to “recruit from this largely untapped, but valuable talent pool."

    Sharing the 2008 award was former New York Yankees pitcher Jim Abbott, who became well known for reaching the major league level despite only having been born with one hand. Abbott currently works to raise awareness of the benefits of hiring disabled employees.

    "I am deeply honored and proud to be among the Department's SPIRIT award winners and particularly pleased to be sharing the recognition with Jim Abbott," Burd said. "Assisting people with disabilities has long been an important part of what Safeway stands for in the community. We have worked hard to ensure that our company is a place where people with disabilities can find rewarding opportunities."

    KC's View:

    Published on: October 9, 2008

    BrandWeek reports that in an effort to give new energy to its Duracell battery brand, Procter & Gamble is conducting a nationwide casting call for five young ambassadors to deliver gifts to patients in children's hospitals this holiday season. According to the story, “The online search runs through Nov. 3 at PowerASmile.com. To enter, parents must submit photos of their child (6-15 years old) excitedly opening or ‘powering up’ a present for the first time. The other requirement is a short story submission describing the ‘best gift your child ever received and why it made them smile’.”

    Interestingly, the entire promotion is being conducted online, which P&G marketers believe will make it both more effective and considerably less expensive than an equivalent campaign conducted via more traditional media outlets.

    Actress Maggie Gyllenhaal is the spokesperson for the promotion.

    KC's View:
    This is a good example of what is described above in this week’s MNB Radio commentary – it combines brand building with a social agenda. And the notion that the whole thing is being done online suggests that you don't have to be P&G to conduct similar kinds of promotions. You just have to be innovative.

    However, you probably do have to be P&G to get a spokesperson like Maggie Gyllenhaal, who went right to the top of my favorite actress list when I saw her in “Stranger Than Fiction.”

    Published on: October 9, 2008

    The Stamford Advocate reports that food retailer Stew Leonard’s, having been yet again blocked from building a new store on land in Orange, Connecticut, that the company paid $2.2 million for more than a dozen years ago, may instead use the property to grow fresh produce that would be sold in the company’s existing four units.

    "I don't know exactly what I'm going to do yet," said CEO Stew Leonard Jr. "I have to get some soil samples."

    The state’s Supreme Court ruled last week in favor of legal challenges to an approval given to construction by Orange’s the Inland Wetland and Watercourses Commission. Leonard said that the company was studying the ruling to see what its options are.

    Leonard also said that the company is constantly fielding inquiries from communities in New York and New Jersey, hoping to attract a Stew Leonard’s store. “There are a lot of opportunities. We are just sitting tight." Leonard said.

    KC's View:
    Perhaps Stew Leonard will sit down with Danny Wegman to discuss some of the interesting work that Wegmans is doing with its organic farm in upstate New York – not just growing food to be sold in its stores, but also learning about organic agriculture and sharing its findings with both consumers and other suppliers.

    FYI…Stew Leonard’s, which started out as a simply dairy store, already has a dairy farm in Connecticut that raises more than 2,000 head of dairy cattle.

    Published on: October 9, 2008

    Walgreen Co. reportedly has decided to step aside in the battle to acquire Longs Drug Stores, withdrawing its $2.8 billion bid in a move that apparently will allow CVS Caremark’s $2.7 billion bid to go through unscathed.

    The company cited a refusal by Longs’ management to engage in ”constructive dialogue” as a reason for the decision, though some analysts have said that a successful bid would have created antitrust problems for the company.

    KC's View:

    Published on: October 9, 2008

    • The San Francisco Business Times reports that Del Monte has completed the sale of its seafood business, which includes the StarKist brand, to Korea-based Dongwon Industries in a deal said to be worth about $359 million. Del Monte said it divested the seafood business to pay down debt and allow it to focus on higher margin products.
    KC's View:

    Published on: October 9, 2008

    • Walmart said that its total September sales rose six percent to $36.23 billion, with same-store sales up 2.4 percent for the period. The company said that it would have done better except for the hurricane-related closings of more than 300 stores during the month.

    Just FYI…the Financial Times said that in an analysis of its stock performance that the company is ideally positioned for the tough economic times currently being experienced in the US and elsewhere, saying that “the shift in consumer attitudes comes at a time when a three year plan to improve performance is bearing fruit. Under Wal-Mart USA head Eduardo Castro-Wright, centralised control has been loosened. Marketing efforts now appear to match what is happening in-store. In a timely move, the group began to scale back openings last year to concentrate on raising returns … Wal-Mart is music to panicked souls.”

    • Costco Wholesale said that its fourth quarter profit was up seven percent to $397.8 million, from $372.4 million during the same period a year earlier. Q4 revenue was up 13 percent, to $23.1 billion, from $20.48 billion, with same-store sales up nine percent.

    • Target said that its September sales were down three percent to $5/32 billion, with same-store sales for the period also off three percent.

    KC's View:

    Published on: October 9, 2008

    One MNB user wrote in this week to point out what he thought was a contradiction in a couple of my commentaries. (Only one? Must be a good week…)

    Writing about Tops’ decision to but Tim Hortons doughnut-and-coffee operations in all of its stores, I raised a question that is familiar to MNB readers – whether it makes sense to give so much visibility to a retailer that is competing for share of stomach. (I know the arguments for such a decision, and I’m less hard-line on this than I used to be. But I just think that the battle for share is something that has to be taken seriously and pursued aggressively.) But yesterday, in a story about a new wine website that is serving as source for unknown and local wines, I wrote: =Wine is one of those great aspirational segments in which retailers can use product and education to build sales and interest. And this strikes me as an interesting idea…if only because it exposes people to a lot of products they might not have seen before.

    The MNB user wrote:

    Isn’t the above a direct contradiction to what you said about Tops and Horton. Don’t online sales take away from supermarket sales as well?

    While I’m sure I contradict myself all the time – sometimes because I change my mind, often because I don't remember what I wrote previously – I don't think this is one of those cases.

    I like the online model and the notion of offering products that other retailers don't have, and think that it ought to be embraced by supermarkets looking for a differential advantage. I’ve told this story on MNB before – how my local wine merchant has managed to increase my average transaction by exposing me to wines that I’ve never heard of before, mostly through a wine-of-the-month club.

    My caution about the Tim Hortons deal was that the coffee-and-doughnut retailer already is in the marketplace, competing for meal occasions.

    MNB user Mike Jadrich had some thoughts about the wine story:

    Over the last two years, I have been purchasing more and more of my wine on-line. I have exposure to a wider variety of wines that I cannot get locally because of the archaic distribution system in place (dating back to prohibition). I get better information from the web than from the people at the wine shops/wine departments. I can shop at any hour of the day or night. The smart websites like WineAccess.com offer free shipping on purchases of 6 or more bottles. VinFolio.com offers even more variety by providing access to cult, library and classic wines from estate and wine cellar sales in addition to offering a free wine cellar inventory service (complete with aging reports when a particular wine is drinking well or getting past its prime.)

    This bus has left the station and it is only a matter of time before the internet changes the entire system. But as you mention in your comments, the legal issues of individual state statutes offer huge obstacles that protect the wine distributors and their system. Retailers would serve their interest well, to figure out how to integrate the web into their own store’s wine buying experience. Or perhaps in as little as three to five years they will become irrelevant and wonder where the business has gone.


    Agreed. One hundred percent.




    Responding to Michael Sansolo’s column earlier this week about the FaceBook generation, one MNB user wrote:

    PCC Natural Markets, in the Puget Sound region of the Pacific Northwest, recently launched a FaceBook fan page and the response has been very positive. We are nearing 1,000 PCC fans since its release 10 days ago. We’re also Twittering and have been hearing from users who are excited to see us there. It’s pretty cool to see people who know us telling our story to people who don’t know us!

    Precisely Michael’s point. If we don't make ourselves accessible to these people and embrace these various points of connection, we run the risk of irrelevance.
    KC's View: