For the record: This story first ran on Jan. 19 and incorrectly reported that television commercials starring Kenny Mayne were the work of Arnold Worldwide. In fact, the Kenny Mayne ads broke six months ago and were created by G-Whiz, a unit of Grey Global Group. The spots created by Arnold, which broke last week, are viewable atwww.progressive.com/commercials/commercials.asp. Progressive Direct, aiming to unseat direct competitor Geico, this week broke the first of a dozen new TV ads aimed at driving buyers to its Web site or call-in center to seek a quote and ultimately buy an auto insurance policy. The so-called "Think" campaign introduces the new tagline: "Think easier. Think Progressive." Each spot focuses on a specific product feature or service attribute, and some spots aim at motorcyclists and boaters. Most feature former ESPN sports anchor and pseudo-actor Kenny Mayne delivering the pitch in an easygoing manner. In a spot titled "Re-enactment," nothing happens--and that's exactly the point. A mom driving her kids home from school hits the brakes only to come to a safe stop at an intersection. "Events like this occur countless times every day," which is why Progressive Direct gives savings to good drivers. An animated commercial (without Mayne) features four "fishing guys," and plays up the "disappearing deductible"--that is, drivers with no claims after four years pay no deductible. A second "fishing guys" spot targets boat owners to illustrate that Progressive Direct guarantees total boat replacement in the event of a catastrophe. A spot targeting motorcyclists shows a dude trying on new jeans in a department store dressing room. When he steps out to view how he looks in a mirror, his thighs are disproportionately large. The voiceover asks: "Is this what your insurance company thought when you told them you have saddle bags?" These are the first ads from Boston-based Arnold, which last fall won the creative portion of Progressive Direct's estimated $150 million account after a review. At that time, Arnold president Pam Hamlin said: "We fully intend to give Geico a run for its money." It'll be up to consumers to decide if they prefer Mayne to the Gekko, Geico's pop spokes-lizard. So far, the Mayfield Village, Ohio, Progressive ranks third in the nation for private passenger and commercial auto insurance and No. 1 for motorcycle insurance based on premiums written. Earlier this week, parent company, Progressive Corp., reported that fourth-quarter profit had risen 42%, which it attributed to fewer claims being paid to insurance holders. Progressive's net income increased to $400.9 million, or 53 cents per share, from $281.6 million, or 35 cents a share, a year earlier.
Mary Minnick, who tried to shake things up at Coca-Cola by proposing innovative beverages, is leaving the soda giant in March and will move to Europe to pursue personal and professional goals. Minnick, Coca-Cola Co.'s executive vice president, and president of marketing, strategy and innovation, was expected to depart after she was passed over in December when Muhtar Kent was named company president/chief operating officer. Gerry Khermouch, executive editor of "Beverage Business Insights," said Minnick's departure seemed even more likely after Kent's first public appearance in his new role. Kent announced the company was ready to buy other brands. "We took that as an indirect repudiation of Mary's work," said Khermouch. "He was kind of saying, 'look, there haven't been that many successes. Let's get realistic and go out and find brands that are connecting with consumers.' "There's something about large companies that, no matter what you try to do, they're not going to have that kind of [innovative] agility," Khermouch said. "It's more feasible for them to go out and buy those brands." As for Minnick, Khermouch doesn't think she would end up with another beverage company. After all, he said, "Where do you go after Coke?"
Wal-Mart is testing a revamped cosmetics department in a new neighborhood-format store in Tulsa, Okla. that opened this week. The changes come as department stores have been trying to impart a more free-flowing, Sephora-like atmosphere to their cosmetic areas, and drug stores and mass outlets try to encourage more consumer-friendly cosmetics sections with more product testers and better displays to boost sales. The Wal-Mart Neighborhood Market is a smaller sister to the Wal-Mart superstore, using what Wal-Mart describes as a "neighborhood store format." Currently, 112 are open, and plans call for another 15 or 20 over the next year. The new 39,000-square-foot Tulsa store is the first one with the new cosmetics department design, and will also be used to test other new concepts, the company said in a statement. The cosmetics department features track spotlights, backlit pale-blue signage, curved aisles, and pictures of models sitting atop displays showing the latest products and trends, for a more glamorous look. The cosmetic department is positioned away from food and the front of the store, and closer to the pharmacy and stationery departments. The redesign was based on "months of consumer research," the company said. Wal-Mart is trying to create a more personalized shopping experience, along the lines of the store-within-a-store feeling created by Victoria's Secret's beauty section. On hand at the Tulsa store's grand opening on Wednesday to give makeup and hair consultations were a Maybelline makeup artist/consultant and Garnier Fructis celebrity hairstylist Chuck Hezekia--whose clients include Mischa Barton, Nicole Richie and Joss Stone. Wal-Mart is a key retailer for marketers of packaged goods and beauty items, and its 23,000 stores account for about a quarter of total U.S. sales--ranging from 20% to as much as 40% depending on the product category, marketers have said.
Hormel Foods Corp. is creating a unified brand marketing campaign to make it more memorable on the grocery store shelf. Starting in February, a new logo will start rolling out that will eventually appear on all Hormel-branded products. The company is relying on unified branding to span a gap between Hormel-branded products and Hormel Foods (such as Spam), which bear the corporate logo. The new packaging system is designed to help Hormel loyalists better identify other Hormel products throughout the store. The mark, last updated in 1992, features a red ribbon-like seal and "Since 1891" to exploit the company's heritage. Semmer Group, Minneapolis designed it. All products should carry the new logo within two years. A companion integrated ad campaign includes TV, print and online advertising and features the tagline "Create something great," the company said in a statement. It features members of Hormel's target audience of women ages 25-54 in testimonials of how a Hormel product can be used to "elevate the everyday." Three product lines--cooked entrees, microwave trays, and deli sandwich meats--are being advertised in 30-second spots on network daytime and cable. Print advertising launched in November, and appears in lifestyle and trade publications. Additional marketing support includes consumer promotion and public relations. Hormel spent $36 million on ads in 2005, and $32 million from January through November of 2006, according to Nielsen Monitor-Plus.
Chrysler, which invented the minivan, remains bullish on the market for the vehicle, despite signs minivan sales won't rise dramatically anytime soon. "The big picture is that minivans are a stable and big market," says Ann Fandozzi, Chrysler's group director for front-wheel-drive product marketing. She was a member of the team that redesigned the company's minivans for the 2008 model year. The vehicles were introduced at the North American International Auto Show in Detroit earlier this month. Chrysler, the segment leader, expects sales of minivans to reach about 1.1 million units in 2007. Its two brands, Dodge Caravan and Chrysler Town & Country, represent about a third of the market. Its closest competitors are the Toyota Sienna and Honda Odyssey. Minivan sales in 2006 slid almost 12% to 970,000 from 1.1 million in 2005, according to Autodata Corp. of Woodcliff Lake, N.J. Fandozzi says that minivan sales are more sensitive to downturns in the economy because the people who buy them are generally more budget-conscious. Part of Chrysler's optimism, Fandozzi says, is that the members of Generation Y, children of the Baby Boomers, are creating families earlier than the previous Generation X did. "They are more about family formation," she says. "The Millenials are starting to have kids at 19 and 20 years old." She added that "empty nesters" -- or people close to retirement or in retirement -- remain a big part of the minivan market as well. Chrysler will begin marketing its newly designed minivans beginning in the late summer. While Fandozzi declined to give specifics on the marketing, the new minivans come with a new seating configuration called Swivel n' Go that is likely to feature prominently. The second row of seats can be turned around to face the third row. The minivans also come with an optional table that can be anchored in the floor to create what Fandozzi calls the "living room effect." "We know that the minivan starts from the inside out. We wanted to create a space where families can connect. Families are busier than ever before," she says. "Our formula starts with inside and then we think about what they should look like on the outside." Other companies, such as Nissan, designed minivans that were more fashionable on the outside, listening to a group of customers who didn't like the dowdy image of the minivan. The redesigned Nissan Quest was less than successful with core minivan consumers. Other automakers such as GM and Ford have moved away from the minivan market and are focusing on "crossover" versions of minivans that look more like a sport-utility vehicle. But Fandozzi says Chrysler has found in its consumer studies that minivan owners don't cross-shop "crossovers." "They cross shop other minivans," she says. "It's a rational choice, you either need what a minivan offers or you don't." She says in general that these consumers need more space than cars or sport-utilities and they are looking for something that is more fuel-efficient.
Apple Inc. sold a record 21 million iPods for the holiday quarter, which helped boost the company's revenues by 50% and accounted for sales of $3.43 billion--half of Apple's total sales for the quarter, the company reported this week. Stellar sales have earned the iPod a 72% share of the portable music player market. Microsoft's Zune, meanwhile, recorded 2.8% of the market for December, and 10.2% of all 30GB hard drive models sold, according to retail research firm NPD Group. * Microsoft expects to exceed 1 million units in sales by June 30. The company set a three-year plan to carve out a significant market share and build the Zune brand. Microsoft has announced that it is working on a robust line of accessories with established and emerging manufacturers such as Harmon Kardon, JBL, Griffin, VAF and Belkin, most of who already make accessories for the iPod. The growth of an accessories market is necessary for Zune to gain any significant mileage. Microsoft has also said it is "getting traction with some of the top automotive brands like Ford and others to deliver integrated solutions for Zune while on the road," following in the tracks of Apple's relationships. Marketing Dailynamed Apple its Marketer of the Year for 2006. * This article was modified after the original publication to correct the market share figures.
South Korean electronics conglomerate LG and Italian luxury goods and fashion brand Prada have partnered to create what they are calling the world's first completely touch screen mobile phone. The ultrathin Prada Phone by LG (KE850) has an extra-wide LCD screen which "eliminates the conventional keypad making the overall usage experience a highly tactile one," the companies said in a release announcing the phone, which will be available in Europe in February and in Asia in March. It is priced at 600 Euros ($776). The "tactile" element of the large-screen phone face is reminiscent of Apple CEO Steve Jobs' proclamation upon introducing the iPhone that the best stylus for navigating anything are one's 10 fingers. The iPhone will be available in the U.S. in June, but won't be on sale in Europe until the end of the year and won't be in Asia until 2008. Both phones also function as MP3 and video players and have a 2-megapixel camera, although the Prada phone lacks the iPhone's fully enabled Web browser. The new product announcement appears to eclipse one of the iPhone's claims to novelty. Cisco Systems Inc., meanwhile, has sued Apple over the use of the name iPhone, which it owns and actively uses.
Video ads on YouTube must meet the same standards for truth and accuracy as ads in other media, the National Advertising Division of the Council of Better Business Bureaus ruled in a decision released yesterday. The ruling marked the first time that the NAD--the investigative arm of the ad industry's self-policing operation--considered claims of false advertising on video-sharing sites. "This case establishes a precedent," Andrea Levine, the director of NAD, said in a statement e-mailed to MediaPost. "When an advertiser places a video on a site like YouTube and uses it, either to make claims about its own product or to compare its product to a competitor's product, those claims are advertising claims and, by law, require substantiation." The case stemmed from an ad campaign for Dyson vacuum cleaners touting their allegedly superior ability to suction dirt without clogging. The campaign included a YouTube video that showed Dyson outperforming vacuums made by competitors. One Dyson rival featured in the video, Euro-Pro, complained to the NAD -- claiming that the ad was deceptive because the vacuums used in the test had different-sized receptacles, among other reasons. Dyson pulled the video from YouTube, but the NAD still ruled on the issue. "Dyson's video depicted a comparative product demonstration and was therefore advertising and subject to the legal requirement that it be truthful and accurate," stated the opinion.