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    Published on: January 22, 2010

    The Chicago Sun Times reports this morning about a market survey done by Scott Mushkin, managing director at New York-based Jefferies & Co, suggesting that Supervalu has raised its prices by six percent at its Jewel-Osco stores since it announced last spring that it was lowering the prices on thousands of items.

    According to the story, “The price of a sample market basket of groceries at Jewel-Osco stores in the Chicago area totaled $163 in January, compared with $155 during the grocer's lowest-price promotions period in May 2009, the Jefferies report said. The market-basket survey measures fast-selling items that grocery stores promote, such as milk and eggs, as well as perishables such as fruits and vegetables.

    “Dominick's and Wal-Mart's market-basket prices remained flat in January compared with May 2009, totaling $159 and $136, respectively, the analyst's report said.”

    Jewel-Osco management has responded that any price increases were related to cost increases it does not control, such as the price of commodities, and it said that it stands by its price impact promotion.
    KC's View:
    See, I’m not sure how many consumers are going to get the whole “when prices go up on commodities it isn’t our fault” argument, especially when the competition seems to be able to keep its overall prices flat. They hear the defense, but they think, “shell game.”

    This is the kind of stuff that retailers have to be very careful about. If you are going to compete on price and make that your calling card - which seems to be the primary strategy sounded by Supervalu CEO Craig Herkert - you’d better walk the walk....because Walmart is accomplished at walking the walk and talking the talk at the same time.

    Supervalu may feel pressure to look good to the Wall Street community, which may be part of the reason that prices have gone up (and the Jefferies report notes that the company’s profits have gone up at the same time as prices). But you have to decide at some point whether you are going to look good on Main Street or look good to Wall Street. You can do both, but it takes amazing discipline and consistency.

    True or not, in the Chicago area it is now being implied that Jewel-Osco has neither. Which is not the position they want to be in.

    Published on: January 22, 2010

    Marketing Daily reports on a study by an organization called Burst Media that says 90 percent of poll respondents say that they have incorporated the notion of “green” or sustainability into their lives at some level, and that these aspirationally green consumers are willing to pay more for products that are environmentally friendly and sustainable.

    According to the story, “The aspirationally green consumers are most willing to pay a premium for food and household products they know to be earth-friendly, including produce (66.6%), juices and other bottled drinks (61.1%), household cleaners (59.2%), laundry detergents (58.7%), and packaged food (58.2%). Meanwhile, among the 100% green respondents, over 80% are willing to pay a premium for all product categories, including food, garden/landscaping supplies (84.4%), home improvement supplies (84.0%), bedding (83.3%), and health and beauty products (82.0%).”
    KC's View:
    I think that one of the more interesting facets of the study is the piece that says that roughly 56 percent of respondents believe green claims made on labels and in advertising, and that 25 percent do not find the claims to be credible and believe them to be confusing and misleading.

    While I’m not entirely sure I trust the notion that nine out of ten people are willing to pay more for green products - I think that 90 percent of people say that they would, which is very different from actually doing so - the issue of credibility is a lot more important. Companies have to be absolutely honest and credible, because in the end, the system rewards transparency. And transparency will be the death of companies that try to put one over on shoppers.

    Published on: January 22, 2010

    Target “plans to remodel 340 stores, develop a smaller format for urban markets and expand overseas as the retailer pursues growth in the next five to 10 years,” according to a Reuters story.

    The Wall Street Journal reports that Target will “pour $1 billion this year into remodeling its existing shops to accelerate a push into groceries. The discount-store chain on Thursday said it will open fewer than 10 new stores in 2010, down from about 60 last year and an average of a 100 a year for the past several years.”

    In addition, says, Target executives told an analysts meeting that “it could have a ‘home run’ with its ‘PFresh’ concept, where it is offering an expanded selection of food. It has already seen a lift in sales and traffic at the 108 stores that have been outfitted with the new concept as shoppers snap up the food.”

    Target execs also say they are considering an international expansion that would take the company into Canada and/or Latin America, but not for at least three years.
    KC's View:
    Not to be cynical about this, but...essentially it sounds like Target is adopting the Walmart model. (Even its new commercials seem to be like Walmart’s, except for the slightly higher production values. I was watching one the other night and was convinced it was for Walmart until the tag came on at the end.)

    Which isn’t necessarily a bad idea. Though Target does have to figure out what gives its format decisions a differential advantage.

    Published on: January 22, 2010

    The Pittsburgh Post-Gazette has a story about how Giant Eagle is linking its frequent shopper card program with an automated notification system that will alert shoppers who have purchased products with food safety issues.

    “Late Monday afternoon, employees at O'Hara grocer Giant Eagle Inc. got test results showing some hash brown products sold by the retailer contained a bacterium that can cause a potentially serious infection.” And, the Post-Gazette reports, “Within hours, an automated system was busy calling more than 300,000 Giant Eagle Advantage Card holders who records showed had purchased the affected product ... It was the first large-scale use of the grocer's automated notification system. So far, so good. Officials said many customers have thanked the company for the calls.

    “Loyalty cards issued by grocers and other retailers have had their critics over the years, as some people worry about how much data the companies gather and others complain they shouldn't have to give up personal information in exchange for supermarket discounts.”
    KC's View:
    Except for people who are overly concerned about privacy issues - and they, after all, don’t have to use loyalty cards if they don’t want to - it is hard to imagine how this is anything but a win.

    We make a big deal here about transparency, but it seems to me that part of responsible consumerism is agreeing to be part of the supply chain - consumers need to handle food safely, and when there is a problem in the system, accessible so that they can be advised. Not all consumers will agree with this, and I understand that. But for me, safety trumps privacy...as long as information is not abused by the companies to which it is entrusted.

    Published on: January 22, 2010

    USA Today reports that Michelle Obama, the First Lady of the United States, says she plans to launch a major anti-childhood obesity campaign.

    According to the story, “The initiative will involve the federal government working with local officials and leaders in the business and non-profit sectors, she said, to provide more nutritious food in schools, allow more opportunities for kids to be physically active and give more communities access to affordable, healthful food.”

    Mrs. Obama made the announcement at a meeting of the US Conference of Mayors.
    KC's View:

    Published on: January 22, 2010

    • The Columbus Dispatch reports that Giant Eagle has begun selling an expanded selection of Kosher fresh foods at three of its Ohio stores. According to the story, “the Pittsburgh-based grocery chain has joined Kroger in expanding kosher offerings, sought not only for religious reasons but also by those who believe kosher food is safer because of rules governing its preparation.”

    USA Today reports that Burger King is poised to open its first US Whopper Bar - selling beer in addition to its familiar burgers and fries - in Miami’s South Beach area next month. According to the story, this is a limited effort, with Burger King targeting specific regions for the Whopper Bat concept, such as New York and Las Vegas.

    The Whopper Bar will initially sell just Anheuser-Busch and Miller Coors products in aluminum bottles, though the door seems to be open to a more eclectic selection as the concept matures.
    KC's View:
    While I get the idea that BK only wants to use the concept in certain regions, I think they’re missing a good bet. After all, there are tons of options in the markets they are targeting. On the other hand, some poor guy takes his kids to a Burger King in a remote area where there are very few other options...it is in that place that a cold beer might seem very, very attractive.

    Published on: January 22, 2010

    • Robert Brackett, the former Food and Drug Administration (FDA) official who since late 2007 has been serving as Senior Vice President for Scientific and Regulatory Affairs and Chief Science Officer at the Grocery Manufacturers Association (GMA), announced that he will leave the trade association later this year.

    GMA said that Brackett will remain with the organization while a search for successor is conducted.

    • Rite Aid says that its CEO, Mary Sammons, will step down from that job, though she will remain as chairwoman of the board until June 2012. John Standley, the company’s president/COO, will take on the CEO’s job.
    KC's View:

    Published on: January 22, 2010

    MNB reported yesterday that in the UK, where Tesco has begun a promotion called “Buy One Get One Free Later.”

    The idea is that traditional Buy-One-Get-One promotions for perishable products often result in wasted food that eventually is thrown away - people take the free products because they can, but are unable to use them before the expiration date.

    So now, on certain products - such as melons, lettuce and other kinds of fresh produce - people can buy one this week and get vouchers which will allow them to get the same item a week later for free.

    I like this idea a lot.

    Not everybody did, however, as MNB user Ken Wagar wrote:

    . The strategy and belief behind large packages and BOGOs on perishable food products has been that having more product on hand will lead to increased consumption of the product rather than simply offsetting a future planned purchase. The Tesco move essentially changes the dynamic to one of a direct offset to a future purchase. This does not appear to me to be in the best interest of the retailer unless of course it brings new customers to the stores, builds loyalty etc, which it may well do.

    If competitors adopt a similar approach it would seem to me that not only will the strategy result in a zero sum game it may result in 1 plus 1 equaling much less than 2.

    One could always say that giving product away for free is a benefit to the consumer but that doesn’t on its own make it a good business practice. It will be very interesting to watch how things develop over time from this effort.


    Another MNB user saw a hidden agenda:

    Regarding Tesco in the UK beginning a promotion called  Buy One Get One Free Later. -Giant Eagle here is already a "giant" step ahead of them - almost all of their BOGO deals allow you to buy 1 at half price.  I believe Harris Teeter in NC does the same.  [Kroger has turned a deaf ear to my repeated suggestions that they adopt a similar policy.]  I suspect Tesco benefits from a bit of slippage in redemption of their "get one later vouchers" that probably have a short expiration date, as I suspect is also the case with the CVS Extra Bucks and Walgreen's Register Rewards programs.  I think psychologists would tell you that the "opportunity lost" consequence of these "later rewards" programs is likely to lead to an inordinate amount of consumer ill will.

    But another MNB user disagreed:

    I think this is a fabulous idea – keeps the same customer coming back through your doors every week…and while they’re there no telling what else they’ll buy.

    And another MNB user observed:

    While I can understand the positioning as helping the consumer conserve perishables I have to think that the prime mover for Tesco is that: Get one free later = a return trip to Tesco.

    Nothing wrong with that, last I checked.

    Still another MNB user wrote:

    I think this is very smart. Not only because they are benefiting the shopper, but because this is a real incentive to make people come back to their store on the next supermarket visit. Creates loyalty or repeat business.

    And MNB user Heidi Huff concurred:

    It also helps get the shopper back into the store for an additional visit...

    You’re playing my song...




    Yesterday’s MNB Radio piece reflected on a Wall Street Journal story about common mistakes that men make when marketing to women, and I concluded that these mistakes seem to mirror that a lot of us make in our lives - we don’t pay attention to what is going on around us, we don’t watch and listen to our mothers/wives/sisters/daughters, and, essentially, sometimes we are morons.

    MNB user Philip Herr seemed to disagree with the whole premise:

    As they say, don’t believe everything you read in newspapers. Perhaps this is the style of journalism that Rupert Murdoch is bring to the WSJ (a bit of sensationalism perhaps?), but I went through the items in the article and found that I disagreed with virtually every one on behalf of my clients and my organization. No, I can’t see marketers making these kinds of stupid mistakes. And while I can’t recall which female celebrity has brought out a set of pink-handled home tools, it was a woman who signed off on that decision.

    Another MNB user wrote:

    I think in today’s world men are much better at recognize the differences etc… In my case, and many others who raised a family as a single Dad, I did all the shopping in all the categories. What happens is you quickly learn it is all about women and their needs. To say because men are the bosses and as such the mistakes are made in marketing… is simply not true. In most cases, especially with the larger companies, chains, etc…the people on the front line are mostly mixed between women and men. The grocery chains I deal with have a majority of the key marketing jobs held by the better half….. Men are second class in today’s world. For example…if a man’s work means he is working with a specific woman…the wives and girl friends do not like that situation at all. If the roles were reversed, men seem to tolerate it better knowing it is part of her job. I think most guys would agree.

    Perhaps...but I got a ton of email from MNB users who agreed with my conclusions...many of them women.

    MNB user Erica Russell Eby wrote:

    Great MNB radio piece today.  While reading it I couldn’t help but think that perhaps product executives make the judgment that “the importance of an emotional appeal” is a bit shallow or silly.  That kind of logic leads to the “make it pink” knee jerk reaction.  Even in my own female mind, “emotional appeal” conjures images of being out of control, when it’s really a deeper level of thinking that integrates right brain and left brain functions.  Perhaps more effective imagery would suggest that product executives of any gender focus in on how their product touches the customer at the deepest levels of consciousness and proceed from there. 

    Andrea Learned wrote:

    I loved your piece.  And, no you are not wrong - it's exactly as you say.

    Sometimes I think the marketing field/media coverage makes it seem like it's rocket science.  Marketing to women is not some steep hill to climb.  It boils down to good marketing, and you hit the nail on the head, pay attention to what goes on around you.  You definitely get clues from the women in your life and that can help you begin to see how to relate to your customers.

    The extra interesting thing is that, as long as you market transparently to women (i.e. no pink!), men are less likely to be alienated and more likely to come along for the ride.  Men may be less inclined to demand what women do from marketers/brands, but they still appreciate it when they come across it by surprise.


    MNB user Jackie Lembke wrote:

    I would say sometimes is a conservative estimate. Men not only don’t understand how women shop, they rarely understand how to deal with us in the workplace either. In general, we find power trips and ego fests annoying and a waste of time. Generalizing is not a good thing and understanding who you are dealing with on a more “intimate” level is good. When working with or targeting a specific group, knowing what motivates that person or group works much better than dealing with everyone at the same level. I have two children motivated by different “things”. For one withholding approval works best, she is a people pleaser and that is what motivates her, the other cares less about pleasing others but was highly motivated with privileges or the lack thereof, grounding or taking away a privilege worked best. It didn’t always seem fair to the child, but it worked.

    MNB user Patti Pagels wrote:

    You just made my day, by sparking a memory from a much early time.  My father worked for over 40 years for one of the Detroit automotive brands (one that still exists—so, I’ll have to be a little vague).  In the late 70’s or so, they wanted to bring out a version of a very popular car to attract more women. 

    After a lot of research, the designers made the amazing discovery that woman like different color combinations than men.  One of the more “stunning” revelations—women actually liked navy blue and beige together.  Imagine!  (To men, I was told, these are two neutrals and would not be combined on a car.  Whatever.)  They applied this supposedly “only-a-woman-could love” color scheme to the paint scheme and interior fabrics.  To make it even more attractive to women, they included a matching tote bag and umbrella, which stored in a pocket behind the driver’s seat.  Finally, they gave this car’s name a special “sub-title”—the name of a very upscale shopping mall just down the street from the ad agency.

    It did quite well, if I remember correctly. I think women were just glad SOMEONE realized they were actually buying and driving cars.  It’s hard to believe that was leading edge at the time. Then, again, maybe not so much has changed . . .
     
    Thanks, as always, for a great read.


    MNB user Peter A. Alemian wrote:

    Well put!  As a grocery marketing veteran of  20 years, and working in a culture where the customer’s voice trumps that of the VP of merchandising, I’m always struck by the lack of anything close to gender balance at the “Exec Team” level in many supermarket chains. Compound that with a research department that is more concerned with competitive share and unaided awareness than with issues impacting the customers state of mind and you’ve got a recipe for comp sales decreases.  Not to say there aren’t chains out there who get it; there are, and I’ve worked with some of them – but in general they seem outnumbered.  To your point, in the end, aren’t we all better off when we listen to our wives.

    And finally, MNB user Tom Robinson wrote:

    This sounds like a good subject for a Mel Gibson movie.  Didn’t you cover this in your book?

    Actually....there was supposed to be a chapter in the book about “What Women Want,” the Mel Gibson comedy about the chauvinist pig who suddenly can hear what women are thinking and becomes not only a better advertising executive, but a better man.

    But both Michael Sansolo and Mrs. Content Guy were horrified by the idea that Mel Gibson would be mentioned in the book because of his anti-Semitism. So the chapter ended up being about Big instead.

    But the point was the same.

    And thanks for giving me yet another excuse to shamelessly plug the book.
    Not that I need one...
    KC's View:

    Published on: January 22, 2010

    There was an interesting piece in Fortune the other day about how a wealthy Detroit money manager named John Hantz has come up with a unique idea about how to revitalize the Motor City. He wants to start a farm within the city limits.

    “Yes, a farm.” Fortune writes that what Hantz has in mind is “a large-scale, for-profit agricultural enterprise, wholly contained within the city limits of Detroit. Hantz thinks farming could do his city a lot of good: restore big chunks of tax-delinquent, resource-draining urban blight to pastoral productivity; provide decent jobs with benefits; supply local markets and restaurants with fresh produce; attract tourists from all over the world; and -- most important of all -- stimulate development around the edges as the local land market tilts from stultifying abundance to something more like scarcity and investors move in. Hantz is willing to commit $30 million to the project. He'll start with a pilot program this spring involving up to 50 acres on Detroit's east side. ‘Out of the gates,’ he says, ‘it'll be the largest urban farm in the world’.”

    The story continues: “This is possibly not as crazy as it sounds. Granted, the notion of devoting valuable city land to agriculture would be unfathomable in New York, London, or Tokyo. But Detroit is a special case. The city that was once the fourth largest in the country and served as a symbol of America's industrial might has lately assumed a new role: North American poster child for the global phenomenon of shrinking postindustrial cities.

    “Nearly 2 million people used to live in Detroit. Fewer than 900,000 remain. Even if, unlikely as it seems, the auto industry were to rebound dramatically and the U.S. economy were to come roaring back tomorrow, no one -- not even the proudest civic boosters -- imagines that the worst is over.”

    And there is another stark reality - Detroit is roughly 139 square miles, and 40 square miles of it has been abandoned. Which means that at the very least, there is available property.

    Now I have to be honest here. I know less about farming than I do about urban planning. And I know almost nothing about urban planning.

    But I read this story, and I think to myself, we may be going through a recession, and there may be a lot of questions about the shape of the future, but we haven’t lost our capacity for audacious innovation.

    And if there’s anything that I find appealing, it is audacious innovation.

    It’s kind of cool.



    So last week I was in the US Air terminal at LaGuardia, and noted that there were still some Accenture ads up featuring Tiger Woods. They were good for a chuckle after getting through security.

    This morning, in the United terminal, they seem to have the new campaign up - and the ad I saw features an elephant riding on a surfboard.

    And you know the first thing I thought of when I saw it?

    Tiger Woods.

    Eliminating that connection may not be as simple as replacing billboards.




    I was reading in the Star Tribune the other day that the folks in charge of concessions at the new Target Field - the new home of the Minnesota Twins - are finalizing the foods that will be served there. It’s going to include pork chops on a stick, walleye on a stick, and wild rice soup - though a decision has not yet been made about whether to serve the famous Dome Dog that used to be available at the Metrodome. (I vote yes. Baseball, of all sports, is steeped in tradition. You don’t mess with certain legacies.)

    But I also think that they’re missing a good bet...since it was in Minnesota last year that I had one of the best sandwiches of my life - smoked turkey, Jarlsberg cheese, a slice or two of bacon, topped with cranberry mayonnaise and served warm on toasted thick cinnamon bread. I had it at Lund’s, and even now, months later, I dream about it.
    That said, the new ballpark looks amazing. I think I’m going to need to find an excuse to travel to Minnesota this summer...



    When considering Avatar, you really have to think about the movie in three different ways.

    First, there is the phenomenon. is well on its way to becoming the biggest box office hit ever produced by Hollywood, though certainly not the most profitable since it also cost a couple of hundred million dollars to make. So clearly it is touching something out there.

    Second, there is the technology that makes it possible. Shot using digitally generated backgrounds and performers, Avatar is remarkable to look at ... especially if you seen it in 3D, as I did. There are moments in the film when you’re sure you could reach out and touch the plants and animals up on the screen. At the same time, director James Cameron has created a futuristic world that seems utterly plausible - it may be the most fully realized vision of the future that I’ve ever seen.

    Then, there is the script. This is where James Cameron the writer let down James Cameron the director. The story itself is fascinating - Avatar posits that soldiers and scientists from Earth have traveled for years to reach Pandora, a moon of the planet Polyphemus, where their intent is to strip mine the place in search of a mineral called unobtanium. To do so, they are using avatars - genetically modified versions of the blue-skinned natives of Pandora - that are linked telepathically to Earthlings looking to infiltrate their ranks.

    There’s no question that the film has political and environmental overtones...but the problem with it is that Avatar doesn’t know the meaning of subtext or subtlety. And do it is sometimes a little ham-handed.

    But that doesn’t mean that Avatar isn’t enormously entertaining. It is. And it certainly stretches the boundaries of what movies can do.



    We talk a lot here about the power of a great private brand. Well, my wine of the week is precisely that - the D&S 2006 Proprietary Red Wine made for Chicago’s Bin 36 by Hahn Vineyards. It’s delicious...and there’s only one place you can get it. And it just reminded me of how great an advantage it can be to have something that nobody else has.

    Which is what a private brand is all about.



    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Slainte!
    KC's View: