Buick has been working hard over the past few years to shake off consumer perception that it's Grandpa's brand. But even though the GM division has been using Tiger Woods as its pitchman for the past few years, the company is not exactly aiming at thirty-somethings. The 104-year-old brand, which last year sold about 570,000 vehicles, this week rolled out a new premium sub-brand resurrecting a Buick name from the '50s: Super. Steve Shannon, Buick's general manager, spoke about the new sub-brand this week at New York's Cipriani's. There, beneath the Gothic, vaulted ceilings of the former Bowery Savings Bank, Buick showed off new Super versions of its LaCrosse and Lucerne sedans and an old icon: the 1940 Buick "woodie" Estate Wagon owned by Bette Davis and now part of the collection of Italian jeweler Nicola Bulgari. In some ways, Davis' classic Buick is emblematic of where Shannon said Buick is meant to reside -- alongside dealer mates GMC and Pontiac as well as in the GM lineup. "Buick is about safety, a higher level of luxury, the quality advantage, superior customer service," he said. He said even though the face of Buick these days is Tiger Woods, a 30-something golf legend, the sweet spot is boomers, consumers in their 50s and 60s who are more affluent and think of performance more broadly than under-the-hood muscle and rear-wheel drive. "These are consumers who often pay with cash, who are more interested in a vehicles tuned for a quiet, comfortable ride ... we call them 'grownups'," he said. As for the Super premium brand, the enhancements are in big 18-inch wheels, larger brakes, more power, firmer chassis, interior appointments, and a more sophisticated palette of point choices. Shannon said Super is not meant to be Buick's version V-Series, Cadillac's performance sub-brand. Caddy's "V" was developed to counter European muscle sub-brands like Mercedes AMG and BMW M-Series. Toyota's Lexus is following suit this year with souped-up versions of its Lexus cars to wear the "F" nameplate. Cadillac has also used V-Series in ads to create a kind of performance "halo" over the entire Cadillac brand. Shannon said marketing messages about Super will be integrated with campaigns for the 2008 LaCrosse, available late summer, and Lucerne, on sale late spring. "We will tie them together," he said, adding that golfer Woods would be central to the campaigns. Buick is also rolling out its second crossover, the Enclave, which goes into production this spring as an early 2008 model, on sale this summer. Shannon said the company will lure a younger buyer to the brand. While the median age of Buick sedan buyers has been in the 60s, the Rendezvous, Buick's first, short-lived crossover nameplate that ceased production late last year, brought in a buyer some 10 to 15 year younger. Shannon expects that will be the case with Enclave as well. GM's new distribution -- or channel -- strategy puts GMC, Pontiac and Buick together in dealerships. GMC, however, will also sell a crossover based on the same production template as Enclave. Shannon said he doesn't see a problem with GM selling GMC Acadia and Buick Enclave side-by-side in dealerships. "GMC has so many years of truck heritage, and the Acadia is really more SUV-like. It is at a lower price point, as well, and will probably get a younger buyer, more families," he said. The Acadia starts at around $30,000 and ranges all the way to over $44,000. The Enclave starts at around $32,000.
The co-chair of a task force that is looking at the relationship between media and childhood obesity Tuesday warned that, unless changes are made voluntarily in marketing food to kids, the government will step in. U.S. Sen. Sam Brownback, R-Kan., and co-chair of the Task Force on Media and Childhood Obesity, told government and industry officials as well as watch dog groups gathered in Washington, D.C., to hear the Kaiser Family Foundation's report on the issue that there is a "lot of pressure to move forward, to see regulations that move this forward. The moment is now." Brownback called on the nation's food advertisers to "step up" and advertise healthier products while assuring them that they are not the whole problem. The task force expects to put forward its ideas on ways to combat childhood obesity by modifying marketing practices and encouraging more exercise and nutrition education by mid- to late summer. Kaiser's report, "Food for Thought: Television Food Advertising to Children in the United States," excoriates the media for fostering an environment in which 34% of the ads children see are for candy and snack foods, 28% for cereals and 10% for fast food. "Kids 8-12-years old see on average 21 food ads a day--more than 7,600 a year--most of which are for candy and snacks (34%), cereal (28%), and fast food (10%)," it says. "Teenagers are next at 17 a day or about 6,000 a year. The smallest fry actually see the fewest food ads, with children 2-7 seeing about a dozen ads a day, which is attributed in part to a TV diet heavy on public TV and limited-commercial outlets like Disney." Reaction from the advertising industry was swift. "One of the stated goals of the Kaiser report was to 'help inform the efforts of policymakers,' and the report has some important information," Dan Jaffe, VP/government relations for the Association of National Advertisers, wrote on his blog minutes after the presentation. "Unfortunately, the report is frozen in place. We cannot move forward if we are so fixated on the past that we fail to see the dramatic progress already made in the present and the rapid steps and firm commitments that the advertising community has made to take even greater strides to combat obesity in the immediate future." Jaffe detailed the steps taken over the past 18 months, which includes the establishment of an 11-member Children's Food and Beverage Advertising Initiative, a voluntary self-regulation program that includes giants such as Campbell Soup, Coca-Cola, and General Mills, and new guidelines issued by the National Advertising Review Council. Mary Sophos, SVP/chief government affairs officer for the GMA/FPA, which represents grocers and food producers, said the group is working with the Ad Council on its new campaign to create public service announcements that would "bring important messages to parents and kids about health, nutrition and physical activity." During the presentation, Vicky Rideout, VP/director of the Program for the Study of Entertainment Media and Health at the Kaiser Family Foundation, focused on the effect of televised food ads on tweens, children ages 8 to 12. "Children of all ages see thousands of food ads a year, but tweens see more than any other age group," she said. "Since tweens are at an age where they're just becoming independent consumers, understanding what type of advertising they are exposed to is especially important." The food and beverage industry has been under pressure to decrease the amount of "junk food" advertising to kids and to increase the amount of advertising for healthier options such as fruit and vegetables. The Kaiser study found that for each age group studied, food was the top product seen advertised. "Thirty-two percent of all ads seen by 2-7 year olds were for food, while 25% of ads seen by 8-12 year olds and 22% of ads seen by 13-17 year olds were for food," it said. "Of all genres on TV, shows specifically designed for children under 12 have the highest proportion of food advertising (50% of all ad time)." Brownback, who identified himself as being "a free-market, conservative person," said that, nevertheless, "if people are not working together and things are not happening, you will see a much more regulatory regime stepping forward. This situation is significant, and it is known. Shame on us if we can't figure this out and work this out together." A representative of the Girl Scouts of America told Brownback that when girls talk about healthy living, they see it as a whole composed of parts - working out, diet and emotional health holistically - and asked if this was part of the task force's conversation in terms of nutrition and the media's effect on children. It is not, Brownback said. The task force's work is targeted specifically on advertising and marketing. "It's a pretty specific topic," he said.
Discover has been pumping away in the consumer credit card arena, and it's now taking on the brand leaders in the small-business card sector - the fastest-growing segment within the broader commercial market that presents the card companies' best prospects for growth in the years ahead. In contrast to the mature consumer card market, commercial as a whole and small business in particular represent massive untapped potential. As detailed in the new Marketresearch.com Packaged Facts report on corporate credit cards in the March 28 issue of Marketing Daily, cards are currently capturing less than 3% of total 2007 estimated corporate expenditures of about $722 billion ($1.2 trillion by 2010), and about 10% of small-business expenditures, estimated at $427 billion for this year and $740 billion by 2010. All of the major issuers offer small-business cards touting a variety of reward points programs and other benefits, such as sophisticated data reporting tools. But the battle to differentiate has now gone well beyond speed of turnaround on crediting rewards purchasing points to include, for example, discounts linked with participating merchants. As the PF report notes, Visa, MasterCard and American Express have all added allied merchant card points to their reward programs as a means of customizing their offerings, improving prospecting through segmentation and measuring, gaining access to partner databases, and increasing merchant buy-in. And the Discover Small Business Card, launched last summer (and thus far Discover's only commercial card), upped the ante in this highly competitive and increasingly segmented market by offering small businesses cash rebates of up to 5% on office supplies, 2% on gas, and 1% on other purchases. American Express responded by launching its SimplyCash business card - one of 16 Amex card offerings (some co-branded) geared specifically to small businesses. SimplyCash users get up to 5% cash back on gas, office supplies and wireless services, and 1% back on most other purchases. Why did Discover choose the small-business sector as its entry into the commercial space? According to Discover Business Card Director Sastry Rachakonda, Discover consumer card customers who were small-business owners had been asking for a business card, and Discover's assessment was that small businesses' specific needs were being underserved by existing cards. "As a brand, Discover has always been the card of Main Street America, so it made sense for us to launch into the commercial space with a small-business card," she adds. One result of Discover's year of pre-launch market research was designing the Cashback Bonus purchasing rebates program to offer maximum rewards on small businesses' biggest expenditures (office supplies and gas), as well as eschewing a cap on how much businesses can earn and expiration dates, Rachakonda reports. Other incorporated features include the ability to download the card's statements to QuickBooks; fee-free purchase checks with the same float as the credit card (for paying suppliers who don't accept cards); ability to change the card credit limits for individual employees online in real time; and primary protection on car rentals. How is the Discover Business Card faring thus far against the titans already dominating the small-business sector? Rachakonda says policy prevents discussing performance specifics, but that "it is safe to say that the Business Card has been performing beyond expectations, and we are really heartened by the reception." Recent financial statements from Discover parent Morgan Stanley - which in December declared its intention to spin off the Discover business in the third quarter of this year in order to enhance shareholder value and allow Morgan Stanley to focus its efforts on its Institutional Securities, Global Wealth Management Group and Asset Management businesses - show Discover as a whole performing well. Discover had 45.3 million general-purpose card accounts as of the end of fiscal year 2006 (Nov. 30), and net revenues of $4.3 billion, versus $3.5 billion in fiscal '05. Discover's net revenues were down 6% in the fiscal '07 first quarter over '06 (ending February), but the business logged record transaction volume (up 13%, to $30.3 billion) and the fifth consecutive quarter of managed receivables growth. Breakouts on the Business Card are not reported; however, Morgan Stanley cites "robust performance in corporate credit trading" as one factor driving its strong overall growth, including a 70% jump in net income in the first fiscal quarter, to a record $2.7 million.
In what will no doubt be good news for Elaine Benes, the Today Sponge is back. Actually, it returned to shelves in 2005, after a 10-year absence. However, the Synova Healthcare Group, Inc., which focuses on women's reproductive and health-care products, will re-launch the product first to doctors then via a national campaign this spring. Synova will show the Today Sponge female contraceptive at the May annual clinical meeting of the American College of Obstetricians and Gynecologists (ACOG) in San Diego, Calif., where some 5,000 members will be first in line to see the ads and packaging, per a Synova press release. The first version of the over-the-counter birth control product, which is now a soft, polyurethane sponge coated with sperm-killing nonoxynol-9, went off the market in 1995 after a 12-year run. The product was discontinued because American Home Products, now Wyeth Pharmaceuticals, which made Today, discovered a contamination problem at the plant that made the sponges. Production was discontinued, though the sponge was a leading contraceptive. Ironically, that was also the year the product entered mainstream culture when "Seinfeld" aired a show in which Elaine proclaimed it her favorite type of contraceptive and screened potential lovers to determine whether they were "sponge-worthy." Allendale Pharmaceuticals, which acquired the marquee in 1995, and relaunched it in 2005, was itself acquired earlier this year by Synova, which also got the rights to the Today brand. The unveiling of Today at the ACOG meeting will be followed by a multi-media consumer advertising campaign. Synova used Harrisburg, Penn.-based Pavone for the launch of its Fem-V consumer test for vaginal infection last May, an effort that also began with a show-and-tell at the 2006 ACOG meeting. While Pavone continues to handle that product, Horsham, Pa.-based pharmaceutical ad agency Dudnyk is handling creative duties for Today. Dave Harrison, COO of the Media, Pa.-based Synova, says that while there are no direct competitors -- no similar barrier-based contraceptives using nonoxynol-9, a non-hormonal spermicide -- a range of both prescription and OTC products and other devices falls into the competitive set. "It's a tricky question, because we compete, broadly, against the pill, but that's not really how this plays out. What Today does is provide another choice for women." Harrison, who says the company is currently engaged in a multi-city effort to hone the marketing message for the relaunch, added that the company will spotlight the product's convenience, spontaneity and the fact that it has a 24-hour cycle, all three of which are related: one can insert it in advance and use it repeatedly over a 24-hour period. Also noted will be that Today is non-hormonal. "It's an important feature of the product," he says. "We have been working very aggressively since acquiring Allendale; we are going to rebrand the product, and we are out testing packaging concepts and ad concepts and creative in a multi-city phase right now to gauge the right message." Retail distribution is throughout the U.S. and Canada in stores like Walgreens, CVS, Rite-Aid, Wal-Mart, Target, Longs Drug, HEB, Publix and A&P and online at amazon.com and drugstore.com. Harrison says the challenge, at least initially, will be building awareness because the product is far less known today than it was in the Nineties. "The important thing is that this was successful and important in its heyday, but a whole generation of healthcare practitioners and women now isn't aware it's on the market. That's where you'll see the biggest uptake and growth in the market, is just awareness." According to the Guttmacher Institute, a sexual health and policy think tank, 62% of women 15-44 use contraceptives; 43 million women, or 7 in 10 as of 2005, are sexually active and don't want to become pregnant. Also, per the institute, the typical American woman wants only two children and would have to use contraceptives for roughly 3 decades of her life to achieve that limit.
Just as TD Banknorth announced plans to close 24 branches and lay off hundreds of workers throughout the Northeast, its first brand campaign promoting "hassle free" banking broke this week. TD Banknorth in Portland, Maine, is the U.S. retail banking unit of Canada's Toronto-Dominion Bank. It has said it intends to close retail branches in select markets in the Northeast, resulting in the loss of some 400 jobs. The new brand campaign includes a 30-second spot that features the Supertramp's classic rock hit of 1979 "Goodbye Stranger" and three 15-second spots. Each spot highlights TD Banknorth's "hassle free" product offerings, which include no ATM fees in some markets, extended branch hours and lower banking fees. "It was clear that it was time to create advertising that elevates the value of the TD Banknorth brand," said Thomas J. Dyck, EVP/director of marketing for TD Banknorth. "Our customers see banking as one thing to do among many, and we need to show them that we are respectful of their needs and their expectations. To this end, this advertising highlights the convenience, speed and flexibility that banking with TD Banknorth offers." TV spots that broke earlier this week will air in major New England and New York markets, including Boston; Hartford, Conn.; Portland, Bangor and Presque Isle, Maine; Burlington, Vt.; Springfield, Mass., and Albany, N.Y. The campaign was created by the Via Group of Portland. TD Banknorth expects to eliminate jobs in the next several months, and shut most of the branches in the third quarter. It ended 2006 with about 8,700 employees and operates more than 600 branches in eight northeast U.S. states. Jeff Nathanson, a TD Banknorth spokesman, told Reuters the "the vast majority" of branch closures will be former Hudson United Bancorp branches in New Jersey, New York and Pennsylvania. TD Banknorth paid $1.9 billion for Hudson United in January 2006. A year later it bought Interchange Financial Services Corp. in Saddle Brook, N.J., for $481 million. TD Banknorth CEO Bharat Masrani said the cuts are "necessary in response to the current operating environment," and will help lower operating costs by 5% to 8% by 2008. TD Banknorth has struggled in recent quarters from slowing loan growth, stiff competition for loans and deposits, and narrowed lending margins.
Cell phone maker Motorola Inc. announced several new products this week at the CTIA Wireless confab in Orlando, Fla., designed to reinvigorate its flagging RAZR line and reclaim some of its eroding market share, although it declined to offer details on marketing plans. In partnership with Verizon Wireless, Motorola unveiled the MOTORAZR maxx VE, available exclusively via Verizon Wireless stores and at Verizon's Web site beginning April 24. The handset is the next-generation version of the once wildly popular MOTORAZR, with expanded broadband, Bluetooth and multimedia capabilities and internal memory of more than 60 MB. The phone handset will retail for $199.99 after a $50 rebate with a two-year Verizon contract. The companies also announced a partnership to provide an auto audio kit that gives customers access to digital music and phone calls through their car's sound system. The Motorola Automotive Music & Hands-free System T605 will be out on April 6 and will retail for $149.99. Earlier this week, Motorola announced other new handsets and product lines that will work on other service carrier's networks, such as the MC35 Enterprise Digital Assistant which initially will be offered to AT&T's wireless business customers. The PDA, which operates on the GSM mobile phone standard, has GPS, Wi-Fi, push-to-talk calling, and Bluetooth capability, along with a digital camera and a bar-code reader. Motorola also introduced four GSM handsets, including the W218 with an FM radio and the W380 flip-phone, a multi-media messaging handset that harkens back to the company's Star-Tac glory days, as well as four CDMA handsets with a focus on mobile entertainment. The product introductions come a week after Motorola pre-announced disappointing first-quarter 2007 financial results that showed a loss in its handset business. Citigroup telecommunications equipment analyst Daryl Armstrong wrote in a research report that the company's best hope for a turnaround in the immediate term will have to come from their new products. Meanwhile, Motorola and its partners have to find a way to clear up excess inventory of KRZR handsets of between 2 and 3 million, Armstrong estimates, which is another drag on the company's earnings. While Motorola tries to generate some buzz around its new products, it faces increased competition from rivals Samsung and Nokia in its mature and emerging markets, respectively, Armstrong wrote.
San Francisco just passed a law that will require big changes in how grocery and drug chains send their customers packing, and the reverberations of this "paper or plastic" debate are likely to be felt by retailers across the country. The law - the first of its kind in the U.S. - bans the use of petroleum-based plastic bags by large grocery and drug chains. In addition to littering the streets, the city says, the bags are responsible for choking marine life. Instead, stores may offer paper bags or compostable plastic, a more expensive and relatively new offering that grocery stores had lobbied against. Craig Noble, a San Francisco-based spokesperson for the Natural Resources Defense Council, which supported the ban, says that biodegradable bags are a great choice and have been used successfully in other countries. "America consumes 30 billion plastic bags and 10 billion papers ones each year," he says, which use up 14 million trees and 12 million barrels of oil. The biodegradable bags, he says, "give consumers a way out of making this false 'paper or plastic' choice." Grocers opposed the ban, says David Heylen, a spokesman for the California Grocers Association, partly because of cost. Regular plastic bags, which don't break down in landfills, cost pennies, he says; paper bags cost 4 to 5 cents, and compostable plastic bags run from 6 to 10 cents. Eventually, those costs will have to be passed on to consumers. More importantly, he says, "we just don't think this will work. It won't reduce the number of bags used, and we would have preferred a measure which focused on recycling bags. We feel that the people who are motivated enough to go to the trouble of composting their plastic bags are also just as likely to recycle." For marketers eager to position themselves as environmentally aware, the city's ban on plastic raises interesting positioning questions. After all, if the law requires all stores do the green thing, will stores like Whole Foods or Wild Oats lose their environmental edge with shoppers? "I don't think so," says John Moore, a consultant and former director of national marketing for Whole Foods, who now runs Brand Autopsy in Austin, Texas. "Consumers are smart enough to know which stores have a mission that is centered around economic sustainability, and something like a plastic bag isn't going to change that. In fact, it reinforces that some stores are proactive, and some are just reactive - consumers can tell the difference." Of course, some stores are scurrying to get in front of the entire paper-vs.-plastic question by pushing sales of reusable cloth or fiber bags. Noble says there is no arguing that these reusable bags, as long as they're sturdy enough to be laundered after any spills, win hands down. In recent weeks, such supermarket chains as Wegman's have been more aggressively selling them.
MTV Networks launched a series of mobile Web sites yesterday with Pepsi-Cola North America and Intel Corp. onboard as charter sponsors of the sites and the mobile TV channels. It's the first time MTV has sold ads against its mobile portfolio. The Intel Corp. and Pepsi brands will feature prominently on the MTV and Comedy Central mobile TV channels, as well as the new MTV, VH1 and Comedy Central mobile Web sites. "With the introduction of mobile advertising, MTVN creates an entirely new revenue stream, as well as a new way to fuel further content innovation and growth on mobile," said Viacom president and CEO Philippe Dauman. "I'm thrilled that MTVN is taking this step toward fully unlocking the value of its mobile portfolio with strong, credible, and widely recognized brands like Pepsi and Intel." Dauman made the announcement yesterday during a keynote at CTIA Wireless 2007 in Florida. "As we continue to evolve our advertising, we see this as a great opportunity to reach our on-the-go consumers in an engaging environment," said Cie Nicholson, senior vice president and chief marketing officer for Pepsi-Cola North America. "We look forward to collaborating with our partners at MTVN on this exciting new project." "We believe consumers should enjoy entertainment when and where they want it -- on their desktop or notebook PC, on TV through a media center PC or on their mobile phone," added Heather Dixon, America's digital home and mobility marketing manager, Intel Corp. The MTVN mobile TV channels feature shows such as MTV's "Real World" and Comedy Central's "The Colbert Report." The new wireless Web sites include MTV news and scoops, a VH1 celebrity photo flipbook and Comedy Central's Joke of the Day. MTVN's CMT, Logo, Nickelodeon, Spike TV, and TV Land will launch mobile Web sites beginning in second-quarter 2007.