This may be anticlimactic, given word that Cerberus Capital wants to sell Chrysler, and General Motors is considering buying it. But the company is also making switches at Hummer that could mean more changes in that division. James E. Taylor, who has been Cadillac's general manager since 2004, will take the new position of CEO. The company says the creation of the position, and Taylor's appointment to it, reflects GM's "strategic review" of the division. Taylor reports to Mark McNabb, GM North America VP for the company's premium channel, who oversees Cadillac, Hummer and Saab. General Motors has said it is considering spinning off the Hummer brand, whose sole products are the large H2 and H3 SUVs. Martin Walsh, currently general manager, will stay to work with dealers on the changes and then move on to a new job, which the company has yet to announce. Taylor joined GM in 1980 and since has held a number of business and marketing leadership roles, including those at Saturn, Adam Opel, Worldwide Purchasing and GM Truck. Mark LaNeve, GM North America VP/vehicle sales, service and marketing, said the changes at the premium channel include "sharpening our focus on Cadillac as GM's flagship brand in the global luxury marketplace under Mark McNabb's leadership." Sales within the Hummer brand have fallen precipitously, with high fuel prices and the economic crunch cutting sales last month by 54%, to 2,298 vehicles. The company has sold only 22,492 trucks in the first nine months of the year--a 47.4% drop. About 75% of Hummer sales this year were of the H3, which is built on the same template as the Chevy Colorado and GMC Canyon mid-sized pickup trucks. It is the smaller of the two SUVs the division sells. Todd Turner, head of Thousand Oaks, Calif.-based think tank Car Concepts, says the main reason GM moved Taylor to Hummer was to make the division more attractive to a prospective buyer. "It's to make Hummer more appealing," because Taylor might well choose to go with Hummer to whoever acquires it, and Taylor was a central figure in the renovation of Cadillac a few years back. Turner says Taylor's presence "adds to the value of the franchise, because it's a damaged franchise."
Whenever Oscar De La Hoya laces up the gloves, the live and viewing audience is huge. The largest gate in boxing history was, in fact, his fight last year versus the wily Floyd Mayweather, Jr., who was considered the best fighter in the world until--at least for now--he retired. But that gate record may well be broken internationally on Dec. 6 when De La Hoya gets into the ring with Manny Pacquiao, generally regarded as the pound-for-pound best fighter in the world these days. Mexican brewery Cerveza Tecate, imported by Heineken USA, will get into the ring as well with a multi-platform campaign to market Tecate and the fight to Hispanics in key markets. Tecate signed a deal two years ago with De La Hoya's company, Golden Boy Promotions, and sponsored both the Mayweather fight and this spring's bout in which De La Hoya's fought Steve Forbes. Boxing may have a small general-market audience, but 62% of viewers of pro bouts are Hispanic, per Tecate. The company will roll out commemorative packaging of 18-packs and 12-packs, and of individual cans, plus a $20 mail-in-rebate discount for the HBO Pay-Per-View event with the purchase of a 12-pack or larger of Tecate or Tecate Light. "We are changing everything to fight-specific advertising," says Carlos Boughton, brand director for Tecate. Elements include POP displays and posters with fight details, to be distributed nationally at grocery, convenience and liquor stores. Furthermore, Tecate will alter its national TV and radio spots to promote the fight. These will air two to three weeks prior to the event in key markets such as Los Angeles; Fresno, Calif.; Monterey, Calif.; Sacramento; San Diego; San Francisco; Albuquerque; Las Vegas; Phoenix; Austin; Dallas and Houston. Tecate, leading up to the fight, will sponsor autograph and photo sessions with Golden Boy Promotions fighters in Los Angeles and Las Vegas and other markets. "We are going all out on this," says Boughton. "It's as big or bigger in terms of how we supported the De La Hoya-Mayweather fight because we now have a much better sense of what's possible and how relevant boxing is to our consumer and as an expression of boldness and masculinity for our brand. So knowing that, we have a stronger plan and better plan," he says. "Active participation as sponsor has been critical in making a name for ourselves. And boxing is a perfect expression of what we want to say for the brand." Editor's note: Look for MediaPost's "Engage:Hispanics" every Thursday.
When it comes to economic anxiety, it turns out that the rich are no different than the rest of us: They are shopping more than 50% less, and not heading back to the mall anytime soon. Unity Marketing says its latest Luxury Consumption Index--which surveys more than 1,100 high-income consumers--is in a freefall, dropping to the lowest point since it launched in 2003. The survey, fielded just after the bailout hubbub, reports that 56% of these shoppers--with a median income of around $210,000--are spending less on luxury now than they were a year ago. And in a chilling prediction for luxury brands, 54% say they also plan to spend less for the next 12 months. All this economic upheaval, the company says in its analysis, shows that affluent consumers' "negative feelings about the economic situation are translating into changes in their shopping behavior"-- including trading down in brands, shopping sales, choosing lower-end restaurants and staying home more: "They are still indulging in luxuries, but they are being more selective in what they choose to indulge." For the upcoming holiday season, Unity predicts these shoppers will be prowling the aisles of Target and outlets, just like the rest of America. As if on cue, luxury leather retailer Coach lowered its previous estimates of sales, based on weaker store traffic and ongoing economic upheaval. For its fiscal first quarter, the company says its sales gained 11% to $753 million, while net income fell 6% to $146 million. "We experienced a moderation in our top-line growth this quarter as the retail environment in North America continued to deteriorate," the company says, noting that same-store sales rose 0.6%. "While we're excited about the strength of the product we're introducing for the holiday season, our enthusiasm is tempered by the weak traffic trends in our North American retail stores and department store locations." As a result, it cut its sales forecast to 10% growth--about $3.5 billion in sales for the year, instead of 13%. In a conference call, the company outlined the ways it is pursuing these "Do-I-really-need-a-new-handbag?" shoppers, saying it is beefing up its product assortment--including fragrances and jewelry-- even as it is reducing the number of handbags it offers. In addition to promoting its new Madison line, which it describes as a "softer, drapier look," all its stores will look more festive and colorful for the upcoming holiday, with gift selections at multiple price points, including small leather goods. Supported by a print and online campaign themed "Holiday by Coach," Coach executives say, the stepped-up selections and merchandise mean "when she enters the Coach store, she will clearly see newness."
The Westport, Conn.-based company is testing four varieties in several markets, relying on freestanding inserts, sampling and PR to get the word out. Available in four "adult/kid-friendly" varieties--Supreme, Four Cheese, Roasted Garlic and Chicken, and Uncured Pepperoni--the product is in stores this month in five test-market areas in New England; Albany, N.Y.; Milwaukee, Wis.; Minneapolis, Minn.; and Charlotte, N.C., with plans to expand to other markets in 2009 and roll out nationally by 2010. Newman's Own Thin and Crispy has fewer calories and carbohydrates (25% less for Four Cheese) per serving compared to regular-crust pizza, the company said in a press release. The crust is made with flaxseed; the pepperoni is uncured; all-natural cheeses are used in all the pizzas, and the roasted garlic chicken pizzas are made with only all-natural white meat chicken, per Newman's Own. The Newman's Own Supreme Pizza is made with sausage, uncured pepperoni, green, red, yellow peppers, onions and cheese. There are no artificial ingredients in any of the Newman's Own pizzas. Newman's Own Thin and Crispy pizza retails for a suggested price of $6.49-$6.99 for pizzas that range from 12.3 ounces to 14.7 ounces. They can be found at Shaw's, Price Chopper, Big Y, Hannaford, Demoula's Market Basket, Roche Bros., Foodmaster, Harris Teeter, CUB Foods, Piggly Wiggly, Woodman's Markets, Copps, Sentry, Byerly's, Lund's, and Kowalski's.
The multi-year extension with the National Basketball Association makes AutoTrader.com presenting sponsor of the pregame show, "NBA Tip-Off," on both TNT and NBA TV before some 149 regular-season games. AutoTrader.com will also be presenting sponsor of the "Drive to the Finals" fantasy game on NBA.com during the NBA Playoffs, the winner of which gets $25,000 toward the purchase of a vehicle listed on AutoTrader.com. AutoTrader.com will also be the presenting partner of the "Player Stats Comparison" on NBA.com. In addition to the AutoTrader.com logo being on the "NBA Tip-Off" host's desk and on court, AutoTrader.com will be the prominent commercial advertiser during NBA broadcasts on TNT and NBA TV throughout the season, per the Atlanta-based company. And AutoTrader.com gets branding during the NBA All-Star 2009 match in Phoenix and the NBA Playoffs. During the course of the upcoming seasons, AutoTrader.com will be heavily promoted across integrated media properties including NBA.com, NBA TV and NBA Mobile Assets. John Kovac, senior director of advertising at AutoTrader.com, says that the company has had a presence with NBA for the past two years, all season. "This is our third year as a full-season sponsor on TNT." He says the company will be running current ads during game broadcasts, including the "big guy" spot in which a Paul Bunyanesque gentleman compares cars by picking them up. The giant will play a part in some custom features within the pre-game specials, per Kovac. "One is player comparison where you have the giant walk up to a stadium, rip the roof off, and pick two players up and compare them. It helps deliver our 'comparison' message." Kovac says AutoTrader.com is involved in both baseball and football, but not to the extent it is with the NBA. "We do have Major League Baseball team sponsorships in a number of different markets," he says, adding that AutoTrader.com sponsors the New York Yankees, Baltimore Cubs, Los Angeles Angels, Atlanta Braves, and Philadelphia Phillies MLB with activation both in local media and on site, and with the New England Patriots NFL team. "But this is unique for us," he says. "It has taken a few years for us to form and strengthen this relationship and try different elements; we have been building, and it has worked well for us."
When it comes to food, consumers in the U.S. and elsewhere pretty much want it all-- taste, quality, health benefits, value for the price and greater say in decisions about safety, ingredients, and many other issues. Meanwhile, only about a third of Americans--and even fewer Europeans--say that brand name is among the factors they consider when purchasing food. Those are some of the findings from a new study of food attitudes among consumers in the U.S., UK, Germany, Argentina and China from Ketchum's Global Food & Nutrition Practice. Two hundred people from each country were surveyed online between the end of July and the end of August (margin of error: +/- 6.93 percentage points at the 95% confidence level). Consumer trends expert/aka "Supermarket Guru" Phil Lempert helped develop the survey and analyze the results. Taste, quality and price are the dominant factors in choosing food in all of the countries except China, where foods' health benefits are most influential, according to the study, "Food 2020: The Consumer as CEO." On average across the countries, 74% cited taste, 73% quality and 70% price. There were certainly some variations by country. For instance, price was cited by nearly as many American and U.K. consumers as taste and quality, and price had a slight edge over these other two factors among Germans. But among Argentine and Chinese consumers, price was clearly third or fourth in the pecking order. And whereas health benefits reign in China (78%), followed by taste and quality at about 70% each and price at 60%, health benefits were cited by fewer than half of those in the UK and Argentina, 55% of Americans, and just 34% of Germans. However, the bottom line for marketers is that consumers throughout the world are far more similar than different when it comes to two realities, says Linda Eatherton, director of Ketchum's Global Food & Nutrition Practice. One is that factors beyond basic taste, price and quality are increasingly important in their food decisions, and the other is that brand names are increasingly considered inadequate as a "proxy or shorthand" for this growing list of factors that matter to consumers. Asked which factors consumers should have more say, control and involvement in when it comes to food topics, large percentages of consumers in all of the countries cited the amount of artificial ingredients/additives used; who should be responsible for food safety/quality; and where ingredients come from. Furthermore, asked to cite what their top priorities would be if they were CEO of a global food company, significant percentages of consumers across countries cited factors such as making food that is safer; improving human nutrition; solving the obesity crisis; ending malnutrition and hunger; and using power/dollars to make a difference, in addition to making foods that "taste great" and "cost less." Meanwhile, the percentages of consumers who indicated that they consider "brand name" among the factors they consider when buying food were eye-opening: U.S., 35%; UK, 24%; Germany, 16%; Argentina, 45% and China, 45% (for an average of 33%). While this doesn't mean that brands play no role in purchasing decisions, it's clear that for growing numbers of consumers throughout the world, brand names lag well behind not only taste, quality, price and health benefits, but factors such as perceived value and convenience of preparation, according to Eatherton. In China, where commercial food marketing is still developing, both safety and cache factors tend to make brands--particularly non-Chinese brands, still fairly influential in purchasing decisions, she notes. Also, in the highly family-focused Argentine culture, brands that deliver taste, quality and price and are also considered important to the family continue to have a strong influence on purchasing decisions. However, to a greater extent in the U.S., UK and Germany, the range of factors being considered in food decisions, consumers' self-education through online sources and networking, and the explosion of private-label foods that offer equal or sometimes superior taste and quality, as well as price, are taking their toll on brands' ability to act as proxies for conveying this host of attributes, Eatherton says. It is absolutely critical that food marketers understand that many factors are increasingly being given equal weight or value to taste, quality and price in the consumer's mind, stresses Eatherton. This, in turn, means that marketers somehow have to find ways to convey all of these attributes effectively in one "thorough, comprehensive, intertwined [brand] story," she says. Creating a "neat, all-encompassing" brand marketing "package" of course presents a huge, new challenge, Eatherton acknowledges. However, brand marketers who think that conveying taste, quality and price is pretty much still enough--"and oh yes, we should probably let [consumers' know that we're sustainable and have some health benefits"--will indeed find that their brands become less and less relevant, she warns. "Consumers have taken control of researching products and companies, and this cycle of knowledge and control raising more and more questions and expectations will only become more powerful as time goes by," she says. "And marketers cannot control this cycle." The only way they can create relevance for brands, Eatherton emphasizes, is to make sure that the brand's total package of attributes-- including its affiliations and processes--are accessible and discoverable by consumers, who then share their knowledge/discoveries with others. "A brand isn't what you say about it, it's what other people say about it," she sums up. She adds that this clearly means that marketers who recognize that social media are the underpinning of all successful brands today are the ones that will survive and succeed. This requires dedication to staying ahead of the curve on all of the sophisticated, constantly evolving engagement, analytics and other tools surrounding social media. "What was totally relevant and right last year is not relevant today," Eatherton sums up.
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