New Balance is playing up its "Made in the USA" point-of-difference with an online documentary and awareness campaign. The 2½-minute documentary can be seen at newbalance.com/USA, which highlights the company's domestic manufacturing history, facilities and footwear products in Skowhegan, Maine. The video can also be viewed on New Balance's Facebook and YouTube fan pages. The campaign includes print, radio and online advertising. Dedicated in-store materials as well as footwear hangtags and box stickers highlight the 993, 1063 and 769 models as either Made or Assembled in America. Online ads will run on CNN.com, AOL.com and Google. On Monday, New Balance will invite consumers to give feedback to win an opportunity to experience Skowhegan shoemaking firsthand. For every entry, New Balance will donate $1 to the non-profit National Center for Craftsmanship (NCC) up to $50,000. The NCC is dedicated to the preservation, enhancement and sustainability of quality craftsmanship, from construction and manufacturing to art and handicrafts. The contest will run through the end of July. Digital Kitchen, the production company that produced the documentary, spent a week in Skowhegan filming the company's associates at work and at home as well as the Skowhegan landscape and greater community. The Boston-based company is the only athletic manufacturer that still produces footwear in the U.S. Nike, for example, has plants in China, Thailand, South Korea and Vietnam. Reebok is supplied by factories in Indonesia, China, Thailand, Vietnam and Brazil. A google search for "Made in the USA" yields 11,700,000 hits, including many sites devoted to informing consumers of products made in this country such as www.madeinusa.org and www.americansworking.com. "Not only does buying Made in the USA products ensure that jobs are kept in the United States, but it also benefits both workers and corporations, instilling a pride in U.S. citizens about our economy and our manufacturing processes." writes John R. Beaman, webmaster of the madeinusa.org site. Consumers have become more attuned to the source of products in part due to the economic recession and job losses in the U.S. The massive pet food recall in 2007 that resulted from melamine finding its way into pet food through the Chinese manufacturing process also heightened awareness of sourcing and regulation. New Balance has five U.S. manufacturing facilities in Boston and Lawrence, Mass. and Norway, Norridgewock and Skowhegan, Maine as well as one in Flimby, U.K. A quarter of the company's total athletic footwear production is currently made or assembled in the U.S. each year. "We made our first pair of running shoes in 1938 and have never wavered in our commitment to domestic manufacturing," says Rob DeMartini, New Balance CEO, in a statement. "During this tough economic time, we are proud to showcase the powerful unity of our American workforce and their local community. "Our associates have passion and pride in their craftsmanship, and their dedication to their work is why we are able to withstand economic challenges and remain strong. This documentary highlights Skowhegan as our first Maine factory, but tells the success story of all New Balance manufacturing facilities and associates."
Consumers have a wide array of sites where they can search for goods and services online -- Google, Yahoo, and Bing, to name a few. Yellowbook is looking to lift its brand to top-of-mind with a new advertising campaign that looks to brand the time when a consumer is searching for something as a "Yellowbook moment." "People almost have this involuntary reflex; we all go to Google," Marty Orzio, chief creative officer of ad agency Gotham, which created the campaign, tells Marketing Daily. "Particularly in the case of extreme urgency, you don't think about where you're going to. If we could force people to think about these moments, the others will fall into place." The television campaign, which is airing nationally, humorously depicts moments that could lead to a popular search term. In the first spot, as a man walks through the door of his house, the picture freezes and onscreen text (encased by yellow brackets) declares: "A Yellowbook moment is about to happen." The man then trips over the doorway and lands on a coffee table. He tells his wife that he got a new job working for an explosives company, saying he will be working with dynamite, blasting caps, etc. As he stumbles away, his wife begins a search for "life insurance" on Yellowbook.com. "The moment you need it, Yellowbook it," says a voiceover to conclude the spot. "We wanted to keep the spots as relatable as possible," Orzio says of the executions. "Whenever you come through in an emergency situation, the product always looks more heroic." The new Yellowbook campaign, which began airing this week, also includes radio, out-of-home and banner ads online, Orzio says. In addition, the company is creating a place on its Web site where people can share their own "Yellowbook moments," that could eventually be turned into new television commercials, he says.
Hershey's Reese's brand is launching a summer promotion, "Reese's Loves you Back," which offers coupons for gas fill-ups and groceries. The on-pack instant-win sweepstakes dangles $2.5 million in cash prizes toward gasoline and groceries. The coupons, inside specially marked wrappers of a variety of Reese's products, offer a chance to win $10, $25 and $100 increments up to $2.5 million. The promotion runs through the end of the year. Although Reese's has not launched an ad campaign for dark chocolate Reese's cups yet, the prelaunch includes an online "challenge" for the most Reese's-friendly city, which happens to be either Chicago, St. Louis, Spokane, Wash., Norfolk, Va., or Boise, Idaho. Last month, Reese's enthusiasts from those cities could cast a vote for their city by visiting www.reeses.com/lovesyouback for a chance to win a local gasoline and grocery giveaway. This week, Reese's will hold an event in the winning city, celebrating the launch of Reese's Dark Chocolate Peanut Butter Cups and the summer promotion by giving away up to $2.5 million in cash prizes. Mintel, a Chicago-based market research firm, says dark chocolate has been seeing a spike -- driven in part by health reports touting it for improving blood flow, elasticity in blood vessels, lower blood pressure, better overall heart health, and the ability to decrease LDL ("bad") cholesterol. Still, in a Mintel survey of 2,000 adults 18 and over in April last year on confection purchase habits, both milk and dark chocolate were chosen by more than half of respondents -- after ice cream/frozen yogurt and baked goods. Dark chocolate was selected by only 34% of respondents, versus 51% for milk chocolate. But almost two-thirds of respondents who bought chocolate for themselves in the past year bought dark chocolate; half bought premium chocolate such as Godiva. Only 16% purchased sugar-free chocolate, and 13% bought organic chocolate. Older respondents tended to prefer dark chocolate, while 18- to-34- year-olds were more likely than average to prefer premium chocolate. "This presents an interesting challenge for manufacturers because most premium chocolate is dark," noted the firm in its report. "Younger respondents who bought chocolate for themselves in the past year are more likely to have bought premium but not dark, while the situation is reversed for over-55s." Among 1,568 adults 18 or over with Internet access who bought chocolate for themselves in 2007 and 2008, 63% bought dark chocolate. Seventy-four percent of those respondents over 65 bought dark chocolate, while 56% of 18- to-24-year-olds bought dark chocolate.
The recession, it turns out, is good for customer service. Consumers believe that they are getting better service than they used to from customer-support centers. But it turns out that outsourced call centers may be costing companies more than they think, and the third annual study of customer satisfaction with contact centers reports that customers "are nearly twice as likely to recommend the company to others if they think the contact center is in the U.S., while they are three times more likely to defect if they believe it is based offshore," reports the Contact Center Satisfaction Index. (The index is created by CFI Group, which uses the University of Michigan's American Customer Satisfaction Index.) Overall, satisfaction gained 3% -- reaching 74 on a 100-point scale --in a survey that includes 2,200 participants commenting on call-in center services from banks, cable and satellite TV, cell phone service, credit unions, hotels, insurance, personal computers, retail and government. Miraculously, it's the troubled banking sector that scored the biggest gain, with satisfaction scores jumping 11% to 79. Cable and satellite TV gained 8%, while insurance companies gained 5% to 79. Hotels and personal computers were more or less flat, while cell phone companies, retail and government all declined. But even with those declines, the survey found that the performance of service reps improved in all the areas it measures, including courteousness, knowledge, and effectiveness in handling issues. One reason for the big gain, the company notes in its analysis, is a much bigger talent pool. "Unemployment is still pretty high, and call centers may be benefiting from more qualified job applicants," it says. The weak economy is also lowering call-center turnover. But the difference between U.S.-based reps and offshore personnel was distinct. Domestic reps were rated 84 out of 100, while offshore reps were rated just 62. And respondents say that call centers in the U.S. resolved their problems on the first call 68% of the time, versus 42% for offshore. Consumers are also clear about how much they hate the interactive voice recognition systems used by so many companies, and much prefer reaching a warm body. Customers who have to go the dreaded "Representative. Representative! Rep-RE-SENTATIVE!" drill are much less satisfied than those who reached a real person (69 vs. 79).
Kellogg Company is combining coupons and a cause. The company launched a program in which consumers who donate $5 or more to Feeding America, the nation's leading hunger relief organization, will receive Kellogg's cereal coupons worth a total of $5. To donate, consumers visit kelloggs.com/feedingamerica, and click into a secure donation page on the Feeding America site that is branded with the Kellogg's logo. Samantha Harris, correspondent for "The Insider," is helping Kellogg publicize the program. Harris kicked it off by presenting the first box of cereal to the Food Bank for New York City's Community Kitchen of West Harlem on Wednesday. The coupon program is part of an ongoing commitment by Kellogg, which has been a donor since the organization was founded. In April, the company said it will donate an entire day's worth of cereal production (more than 55 million cereal servings) to Feeding America.
Plummeting car sales are bad news for one part of the aftermarket business: customization of new vehicles. However, slower new-vehicle sales are good news, at least in the short term, for the segment of the auto parts business whose products are for service and repair. And more people than ever are keeping their vehicles longer. According to NPD Group, Americans are spending more on parts and repairs to keep their current cars running. Also, in a recent NPD survey, 58% of consumers polled said they would spend more on service and repair to keep their vehicles running. The consultancy's Automotive Aftermarket Industry Monitor (AAIM), which tracks retail and commercial sales at the point of sale for over 18,000 auto parts stores in the U.S., shows that the total volume of aftermarket volume was flat through March versus the first quarter of 2008. However, the study also showed several categories that are experiencing growth. According to the AAIM study of retail data for the quarter ending March 2009, growth in unit volume indicates that consumers are fixing vehicles themselves or getting repairs done at retail. In addition to growth in unit volume, the aftermarket saw healthy first-quarter dollar volume increases, per NPD. Dollar volume of application parts for the first quarter of 2009 was up 6.3% versus a year ago. NPD says the top five parts growth categories in the first quarter were wiper components; auto batteries; suspension; driveline; and electrical parts. The markets that saw the biggest growth for replacement parts were Boston, Hartford, Conn.; and Detroit; while Miami, Tampa, and Jacksonville, Fla. experienced strong windshield wiper component sales growth during the first quarter. David Portalatin, NPD automotive-industry analyst, says the boost in certain segments may be short-lived if consumers don't buy new vehicles. "The two factors that contribute most to demand for automotive products and services are the number of vehicles on the road and how far those vehicles drive," he says. "It is possible neither of these factors will increase in 2009. So, while aging vehicles may give a short-term boost to parts sales, future demand growth may be more difficult to generate. In addition, many consumers are still trying to cut back on spending by deferring vehicle maintenance and repairs as much as they can."
Many luxury merchants employ segmentation schemes to attempt to understand market potential along two dimensions. Age, income, family status, etc. refer to the customer. Performance, style, size, function, etc. refer to the product. Both are designed to answer questions like: "How many young married couples will take a cruise in the Bahamas?" Or: "Of the couples who will cruise the Bahamas, how many will buy trinkets in our gift shop?" In these cases the purchase of the luxury object (the cruise or the trinket) is viewed as an in dependent decision. However, Life Style marketing views these as dependent decisions, which must fit an overall pattern the consumer has already established -- their Life Style. This difference is very significant because by starting with Life Style, luxury marketers begin with a context in which to understand "individual" decisions about key purchases. Let's take a quick tour of the Six Basic Life Styles. Unmistakable and Impactful Affluent Life Style (21% of the market)Donald and Ivanka Trump In most product categories, the Unmistakable Affluent places the greatest importance on the largest number of brand attributes compared to other Life Styles. Appearance is very important, and they are the least likely to expect desirable goods and services to be offered at discount prices and are more influenced by advertising than other Life Styles. Success with this segment relies on making them feel they are recognized for being very important and treated in an exclusive manner. Tasteful but Unique Affluent Life Style (15%) Ralph Lauren and Martha Stewart This Affluent Life Style seeks things that reflect their sense of individuality, which is often demonstrated through knowledge of design, workmanship and high-quality materials. Connoisseurship is very important to Tasteful and Unique Affluents. So manufacturers must offer products and services that will capture the eye of this segment. Practical and Popular (12%) The Practical Affluents -- like the Understated Affluents -- have a higher-than-average probability of being business owners, but are much more demonstrative about their feelings and are proud of what they have acquired. Brand names are very important. Often they have acquired the possession, trip, etc. as a self-reward for some accomplishment. The brand and position of things is a very important part of the value of the acquisition. Economical and Safe Affluent Life Style (21%)Allen Greenspan and Suze Orman The Economical Affluents are much like the Unmistakables, except they are often on self-imposed budgets. They are not social or economic risk-takers -- rather, they see which brands are well-accepted and buy them ... on sale. Many merchants know that to maintain the prestige of their brands, they must develop new channels to market "distressed" merchandise or markdowns to the Economicals. Understated and Functional Affluent Life Style (13%) Warren Buffet and Melinda Gates The Understated are interested in quality products and services, but prefer not to be "showy" about their possessions or to be treated obsequiously. They expect a type of small "r" republican respect rather than "over the top" service. Key to success with this segment is an efficient delivery process that does not attract a lot of attention. Staffers must be able to recognize the Understated Affluent as affluent, not just as casual. Horror stories abound around Understated Affluents being ignored in showrooms because they don't look the role. Dependable and Value-Conscious Affluent Life Style (18%) Oprah Winfrey and Bono The Dependable Affluents are hard to market to because they try not to act affluent -- at least not for their own personal satisfaction. They tend not to spend as much on clothes and personal care as other segments, but are more likely to purchase a vehicle for its functionality rather than its "badge appeal." To develop relationships with the Dependables, marketers should become involved in their causes and support efforts they sponsor or support. Promotions should not be "self promotional." Hopefully, these sketches of the key Life Styles make the point. Individual purchases must be consistent with life-as-lived by the prospect. Warren Buffet will not be driving a Rolls Royce (unless he buys the company), nor will Donald Trump be driving a Prius unless it is in a commercial for which he is well compensated. Life Style is not a matter of age or income, but rather a matter of personal taste painted across the arc of one's entire existence. This is an excerpt from the forthcoming book, The Future of Luxury: The Peacock and the Prius." Editor's note: If you'd like to contribute to this newsletter, see our editorial guidelines first and then contact Nina Lentini.