Generation Y consumers constitute about 10% of the total new-vehicle market, but they wield a far greater influence on how automotive executives go to market. Judging by advertising for mass-market vehicles, what Gen Y cares about is style with a little substance. Not so, according to San Diego consultancy Strategic Vision. The firm, which parsed data from its 2007 and 2008 New Vehicle Experience Study, suggests that in some ways, Gen Y is not all that different from older new-car buyers when it comes to brand and vehicle attributes (real or perceived) that tilt them toward a purchase. The firm says, for example, that safety and security in design and durability are much more important to them than such considerations as how fun a new vehicle is to drive. Gen Y buyers are usually first-time car buyers, and are therefore sensitive to issues of trust. And, says the firm, they are also more sensitive to security issues, as they feel less personally secure than other age groups. Seventy-nine percent of Gen Y buyers said they desire a vehicle that offers security, can be trusted, is safe and evinces confidence. "They do have more interest in style and performance than older generations--but for the most part, any 19-year-old vehicle buyer is more like their 50-year-old parent than they are their Gen Y cohort," says Alexander Edwards, who heads up the firm's automotive practice. "Adults can look at a brand name and say, 'I know what I can trust because of what I've experienced.' Kids are looking for security in the product itself." The firm says brands with much higher perceived security ratings also have much higher levels of consideration, regardless of whether Gen Y buyers consider them fun to drive. In the study, 40% of Gen Y buyers said they definitely would buy Toyota, and 36% said the same of Honda--both with the largest consideration and perceived security scores, although they were rated about the same as other brands in the "fun to drive" measure. Says Edwards: "Interest alone does not lead to real consideration [among Gen Y buyers]. They have to trust it first. If the security piece is there in the product, they will look at how fun and exciting it and the brand are second." Per data from the past two studies, younger vehicle buyers are more often female--making up 77% of the age bracket, with more males buying cars as their ages increase. Only 39% of new vehicle buyers and drivers at 40 years are female. Per the firm, 93% of Gen Y buyers who are under 20 are single, with about half in "committed" relationships by ages 25-29. They are also more likely to have finished a four-year college degree, with 65% having done so by age 24. Hispanic buyers are the largest diversity-market group among Gen Y new-vehicle buyers--comprising 11% of buyers between 20 and 24, per Strategic Vision. Asian-American buyers constitute nearly as large a percentage--8% versus 9% of Hispanics--of total new car purchases by buyers 25 to 29. The 10 brands purchased in the highest volume by Gen Y buyers were Toyota, Honda, Nissan, Chevrolet, Ford, Dodge, Jeep, Mazda, Volkswagen and Scion. But the last--Scion--indexes as the top brand overall because its sales to Gen Y are so much higher than to the market at large. Edwards points out that Scion owns 0.5% to 1% of total automotive market share, but that among Gen Y buyers, the Toyota sub-brand accounts for 3% of share--a 300%-plus increase. "In other words younger buyers are 3.5 times more likely to buy a Scion than the industry in general. Younger buyers appreciate the price point, and they can convince themselves or their parents that Scion is Toyota, a reliable brand." In addition to Scion, other brands that were both in the Top 10 among Gen Y and Top 10 in the general market include VW, Mazda, Nissan, Jeep and Honda. Says Edwards: "Those six brands say something: strong sales and also they sell more to Gen Y than what you typically find in the marketplace."
So much for that old theory that lipstick is absolutely recession-proof: Avon Products says its sales slipped 3% in North America in the third quarter, as American women cut back on their spending. Overall, the company says revenues climbed 13% to $2.6 billion--a gain of 6% in local currency. And while net income came in at $222.6 million, compared with $139.1 million in the year-ago quarter, it still fell short of investor expectations. The company's results were buoyed by especially strong sales in such geographic regions as Latin America and Eastern Europe, as well as the results of its increased advertising spending. And while the company says it expects to feel the negative impact of currency fluctuations worldwide and a deteriorating sales environment in North America, "we're staying the course on brand competitiveness," says chairman CEO Andrea Jung. In a webcast discussing the company's results, she described them as at "the 11th consecutive growth quarter since we began our turnaround. Our strategy is working." She vowed that regardless of how stormy the economy gets, the company won't cut back on either its ad spending or sales-rep initiatives. "We won't manage this company for the short term," she says. "We all know how that movie ends." Overall, beauty sales gained 15%--in part due to an 11% increase in year-over-year ad spending, to $106 million in the quarter. Ads supported such new product launches as the Anew Rejuvenate line of skin care, U by Ungaro fragrances and Pro-To-Go lipstick. While Jung pointed out that health and beauty categories tend to be less impacted by recession, and that Avon has many product offerings at value prices, there is at least some reason to doubt the much-touted "leading lipstick indicator" theory. While Procter & Gamble just announced that its cosmetics division--which includes the Cover Girl brand--saw double-digit sales gains in the quarter, Estee Lauder told investors it was lowering its sales and earnings forecasts for the year, citing the rapidly deteriorating global economy. (It was Lauder chairman Leonard Lauder who noted that sales of lipstick--an affordable indulgence--usually go up in times of economic uncertainty.)
Three months after winning the North American creative account for Diageo's Jose Cuervo, WPP Group's JWT has launched a new campaign for the top-selling tequila brand. Called "Live Notoriously Well," the campaign provides what's called a tongue-in-cheek "guide on how to take life's experiences to the next level, responsibly." "Live Notoriously Well" launched Wednesday with two 30-second TV spots running on such cable networks as ESPN, Spike TV, Discovery, Comedy Central, TNT, FX and TBS. The media agency is Grey's MediaCom. The campaign theme will also be integrated into out-of-home, print, radio and online ads, as well as experiential marketing. A new Web site from the brand's digital agency, Omnicom's Tribal DDB, launched simultaneously with the TV ads at www.LivingNotoriouslyWell. com. The site features 23 "chapters" from a "Book of Living Notoriously Well," allegedly written by Mr. Jose Cuervo himself. Sample chapter headings include "What to Order from Bottle Service" and "How to Drink from a Snifter." The TV campaign drinks from the same concept, with chapters scheduled to unfold spot by spot. "Negotiation," one of the first two spots, features the campaign's hero attempting to gain entrance into a nightclub for which he is not on the guest list. The hero introduces himself to a skeptical bouncer as "Burt Reynolds" and provides a fake business card with the corresponding name. Before the bouncer looks up from the card to question him, the hero is already inside enjoying Jose Cuervo Platino with his friends as two attractive women pass by and greet him with "Hi, Burt."
Putting personal political philosophies and candidate choices aside, MoveOn.org has been demonstrating some serious viral video skills in its campaigns in support of Democratic presidential candidate Sen. Barack Obama--particularly in its latest "get out the vote" effort to those already in the Obama camp. According to a tally at the group's Web site, the latest MoveOn viral effort had moved an astounding 9.241 9.258 million people to pass it on as of 1:15 p.m. on Thursday. What's so compelling? MoveOn made it possible for users to easily personalize the tongue-in-cheek, yet pointed video and send it on to friends and family members. The video's premise is a (so far) fictional scenario in which one Obama supporter's failure to get out and vote ends up in a win for Republican presidential candidate Sen. John McCain. It works so well, says brand guru Laura Reis, president of Ries & Ries Focusing Consultants, because "Obama is such a strong and powerful brand, consumers are proud to advertise for him and receive ads from him. Passing along a pure Obama advertisement is something (especially right before Election Day) consumers are happy to do and happy to receive." When recipients download the video, their names are inserted throughout as the individual responsible for Obama's one-vote election loss. The premise is a "newscaster" reporting on the uproar over the one-vote loss in a "newscast" taking place on Friday, Nov. 7. Viral marketing--where consumers are asked to pass along advertising--is not easy to do, notes Reis. "Consumers in general dislike advertising and avoid it. So for consumers to pass something along it has to be almost devoid of any brand message or pitch. Without a brand message, why do the viral campaign at all? Many times people don't even remember what the viral campaign was for. They just remember the cute, dancing elves." The CNNBC-delivered video is identified (in small print at the bottom of the form) as "paid for by MoveOn.org Political Action." The success of this latest viral video on a sheer response basis seems undeniable, and it follows other innovative uses of video during this campaign by MoveOn. In March, MoveOn ran a contest, "Obama in 30 Seconds," asking people to create a 30-second ad in favor of Sen. Obama's presidency. In April, the organization began posting the 1,100 videos received, and 5.5 million people voted to help select the 15 finalists. MoveOn, which claims to have more than 3.2 million members, describes its mission as "work[ing] together to realize the progressive promise of our country" and "a way for busy but concerned citizens to find their political voice in a system dominated by big money and big media." Says Reis: "Obama has been the best-branded politician ever. He had so many strikes against him, yet he beat all odds (plus the Clintons) with a better brand strategy." But, she adds, "politics are short-term." This week, an Obama viral campaign moves millions to pass it on. Next month, not so much.
While no one knows yet whether fourth-quarter sales will be as bad as many retailing experts are predicting, Kohl's isn't taking any chances. The Menomonee Falls, Wis.-based chain has launched an extensive ad campaign, positioning itself as a one-stop shopping destination with low, low prices. The company says its stepped-up marketing program includes "frequent sales events, aggressive discounts on popular merchandise earlier in the season and an easy online shopping experience," the company says in its release--promising that shoppers "will be delighted by the unbelievable prices we're extending earlier and longer throughout the season." The company says it has increased the marketing budget for its national holiday campaign--which includes broadcast, print advertising, digital media, charge card promotions, direct mail, e-mail outreach and public relations, as well as an extensive Hispanic marketing program. TV spots, which the company says will take advantage of the three weekends leading up to Thanksgiving, showcase the store's private brands--with the first spot breaking next week, airing simultaneously across all network stations. Ads are also running on cable, including the Food Network, HGTV, Lifetime and E! Kohl's will also begin airing an ad promoting the brand in Spanish. In print, it says it has doubled the savings offers from last year's levels. It will also offer special "Power Hours"--which typically begin Thanksgiving weekend--much earlier, starting Nov. 7. And online, it says it will continue to increase its investment in digital advertising--taking over the eight pages of popular online sites including AOL, MSN and Yahoo. While Kohl's may be one of the most aggressive retailers in pushing price so early in the season (not to mention pushing the season so early in the season) it's not alone. JCPenney is already hawking doorbuster specials on its Web site, opening stores early this weekend. In a recent poll of CMOs at the largest retailers, BDO Seidman found that 88% expect an increase in discounts and promotions this holiday season--up from 73% last year. And 39% of the CMOs expect comparable store sales to decrease this holiday season, compared to 5% last year, while 41% sales to be flat. Only 20% expect any sales gain, compared with 41% last year.
Procter & Gamble is touting the latest in feminine protection technology with a TV spot, print and online and is dangling technological toys in a contest co-sponsored by Seventeen magazine. The packaged-goods giant is out with Always Infinity, a product based on Infinicel, a new material that absorbs 10 times its weight while remaining light. A two-page Seventeen spread contains an attached insert that invites girls to text for a sample. Online sampling is available at www.always.com/index.jsp, which offers English and Spanish versions. The "Greatest Innovation Contest" invites girls to send in photos with captions describing "the life-changing innovation that you can't live without." One winner will get an MP3 player, mobile phone, a $500 American Express gift card and a year's supply of Always Infinity. The product launched over the summer, says Ellie Off, assistant brand manager for Always North America. At Beinggirl.com, she notes, more than 350 girls and women have logged comments, almost all of them positive. The 30-second TV spot by Leo Burnett began airing mid-October, while the print campaign in women's magazines such as Cosmopolitan and Real Simple and in People, as well as Seventeen and Cosmo Girl, is running in November issues. An advertorial is running in Woman's Day. More than 60 patents were generated in the development of the material, the finished product and the production, per P&G.
NBC Universal's Bravo network has inked a deal bringing a top-line sponsor to its veteran "Inside the Actors Studio" for the first time. Even as some auto marketers pull in the spending reins, Nissan's Infiniti has signed on with a multi-tiered attachment to the James Lipton-hosted show. Bravo said the "presenting sponsorship" arrangement, launching early next month, will coincide with a new on-air feel for the series. Infiniti, a luxury brand, will receive prominent mention at the top of the show. It will also have the brand linked with two segments within Lipton's interview of the week's guest. To be called the "Infiniti Film Vault," Lipton will cut to a clip featuring the star and then return to discuss it. In addition, there will be an "Infiniti Fan Question," where Lipton asks the guest a question that is selected from entrants who visit the show's Web site. That site will include a blog from Lipton. Infiniti agency OMD made the deal with Bravo, looking to reach an upscale audience. The 14-year-old "Inside the Actors Studio" is a relic of Bravo's previous incarnation as a niche arts-oriented network that was owned by Cablevision prior to NBCU's acquisition. Since then, it has ramped up reality-competition series, such as "Project Runway" and "Top Chef."
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7-Eleven has always provided alert consumers with a startling array of choices: Big Gulp or Slurpee? Big Bite Hot Dog or Turkey and Zesty Havarti on Wheat Nut Bread? Now it has added another compelling choice--and one with far-reaching implications for pollsters and marketers of all stripes. I discovered the new offering the other day when I was buying a coffee. 7-Eleven now offers consumers three cup choices: a red John McCain cup, a blue Barack Obama cup or the generic 7-Eleven cup to pour a nice cup of Java into. I thought it was an interesting idea, and I made my selection and headed to the check-out. That's where they got me. When the cashier scanned my cup, the name of the candidate I chose (my lips are sealed on which one for the sake of this particular argument) popped up in the cash register's window. They're collecting the data! I was struck by how innovative 7-Eleven is, and how something so simple could be a very accurate polling process. In the last two elections, 7-Eleven's completely unscientific, informal, but thoroughly modern cup-sales data accurately predicted the results. In 2000, only 1 percentage point separated the cup-counts of George W. Bush and Al Gore. In 2004, President Bush cups outsold Sen. John Kerry, 51% to 49%. In contrast to what many of the more rigorous "scientific polls" news organizations regularly tout, 7-Eleven also breaks out results state by state and, by request, store by store. Let's turn to the superannuated ways that hundreds of polls are currently conducted for a minute. Now, I am not a polling expert, but I am thinking the pollsters make enough phone calls to make a statistically relevant poll. However, it's almost comical how the polls completely contradict each other--one poll has McCain ahead, while another may have Obama winning by a landslide. The average consumer knows very little about how the poll was conducted, and doesn't really care. It's just a scoreboard of sorts--one that provides a fodder for debates with family and friends over who will win. The only thing predictable about presidential polls lately is how unpredictable they are. 7-Eleven, on the other hand, has data based on the candidate that people actively support. Choosing to drink from a cup with a particular candidate's picture on it is comparable to wearing a pin that advertises a political allegiance. If you were a supporter of Obama, there is no way you would walk around town with a McCain Cup, and vice versa. If you're undecided, or just private, the generic 7-Eleven cup is always available. More notable than the tallied total, 7-Eleven's data is showing that Obama is beating McCain in every state. Again--this is coffee cups, but the intent of the consumer is hard not to take seriously. It probably makes for a better assessment of what Americans are thinking than random phone polls. If you want to see current results, click here. While this may not be a statistically valid study, it reaches everyday people going about their business. But this kind of data could provide an invaluable glimpse into so much more. Let's look into the future: there are tons of self-service franchises that can track data the same way. Where does this lead, beyond basic opinion polls? That depends on the leading lights at brands, and whether their imagination, ambition and drive for innovation are as finely tuned as the executives at 7-Eleven. The possibilities are endless. Many brands may be interested in purchasing the right to be on these cups for market research. I would think Huggies and Pampers would love the opportunity to battle it out. Perhaps it's a good, trackable coupon distribution channel. The data would be strong enough to show many brands how they stack up. Go out and vote next Tuesday. Hail to the beans.