As if the U.S. car market isn't packed enough, there may be two new entrants from India and China, angling for a piece of the market: Chery and Tata. A new study from AutoPacific suggests that there might be room in the market for the diminutive Tata Nano, which may physically be around the same size as the Smart ForTwo, but has a much, much smaller price tag, at least so far: Between $2,000 and $3,000. The firm says 15% of U.S. consumers say they would consider making their next car one from China. Also, 11% said they would consider buying a car from India, without knowing specific brands or vehicles. By contrast, 16% said they would consider a vehicle from Korea. Dan Hall, VP at the Tustin, Calif.-based firm, says he was surprised by the numbers which matched those of Korean brands Hyundai and Korea, which have been in the U.S. for two decades. "We found that interesting; we hadn't expected such a large number of people would be receptive to these brands," he says. "But quite a few consumer products we purchase have been made in China for years, so consumers are quite comfortable with Chinese-built." The new study, "Opportunity for Chinese and Indian Brands in the USA," also says those who would consider an Indian or Chinese car tend to be young, well-educated, and affluent for their age, with good jobs. Those who would consider such vehicles also tend to own Japanese or Korean vehicles now, meaning that the Indian or Chinese cars would most likely compete with imports rather than domestic brands Ford, Chrysler and GM. Based on a national survey of more than 30,000 new car and truck buyers, the study also suggests that reliability and durability trump performance and handling among consumers most likely to consider the newcomers. So, which brands are likely to make their way into the U.S.? Although Tata has probably gotten the most attention, both for the Nano micro car and for having acquired the Land Rover and Jaguar brands, Mahindra & Mahindra, whose U.S. office is in Atlanta, plans to bring the mid-sized Appalachian pickup truck here late this year, then an SUV later.
Tequila Herradura, a Louisville, Ky.-based importer, is introducing new primary and secondary packaging to highlight the brand's position as an ultra-premium, hand-crafted tequila brand. The revamped packaging for the brand's Blanco, Reposado and Añejo varieties are rolling out in restaurants and bars. The new look is via Brown-Forman Design Group in conjunction with Duffy & Partners, a brand design company. The packaging shows the Hacienda in the front and back of the square bottles and uses colored ribbons to differentiate the Blanco, Reposado and Añejo expressions to help unify the line extension. The effort is being supported by a national advertising campaign via Draftfcb-Chicago. The print, out-of-home, point-of-sale and online push plays off of the lucky-charm connotation of the horseshoe brand iconography also featured on the new packaging. Tag: "Good Fortune Awaits." John Hayes, SVP and managing director of Herradura Brands, tells Marketing Daily that while the label has been a long-established premium brand in Mexico -- it began in 1870 and, with Don Julio, is one of the two leading premium brands in Mexico -- it has been neglected in the U.S., where Patron dominates. That changed, he says, when Louisville, Ky.-based Brown-Forman bought Herradura two-and-a-half years ago. "Herradura had been under-marketed outside Mexico, so we spent the first year just getting our arms around the business and understanding the brand," he says, adding that the growth in the market is driven both by super-premium tequilas as well as $25-$35 brands like Milagro. Hayes says Herradura's target is 35- to-45-year-old males. "That's the sweet spot; Patron has done a good job of getting broader acceptance based on trendiness. There hasn't been, up until the last five years, a recognition that there could be good sipping tequila. But people have discovered it, partly from traveling to Mexico. "There is a whole market of things that are Mexican and Latino, whether food, fashion, or music. You even have 'tequila geeks' experimenting with different tequilas, and now tequila bars and restaurants that offer 'flights' of tequila (an assortment of brands served at the same time for tasting.) In 2007, sales of tequila in the U.S. surpassed sales of the Mexican-made spirit in its home country for the first time, according to Euromonitor, which says U.S. sales are soaring because of tequila's uptown move from well-drink mixer to premium spirit, a change accompanied and propelled by brand proliferation and the profile of brands like Patron. The group points out that sales in 2006 grew 34% in volume after the Trade in Tequila agreement between Mexico and the U.S. was signed. Other brands have expanded their tequila portfolios to exploit the premium side of the market. Diageo last year launched Jose Cuervo Platino in the UK, then in March launched Especial Silver, the first line extension of Cuervo's Especial Gold, in the U.S. with the message that it is best imbibed chilled in a shot. Says Hayes,: "Basically, we are one of the older ones, an iconic brand in Mexico, but our packaging was not befitting the brand; so this is stage one."
Consumers will spend about 10% less on back-to-school shopping this year, although the recession is only partly to blame for the decline. According to brand and customer loyalty research consultancy Brand Keys, shoppers will spend an average of $531 during the back-to-school season, about a 10% decline over last year. "Despite whispers that the recession is over, consumers are showing steadfast frugality," says Robert Passikoff, president of Brand Keys. "They are looking at the back-to-school buying [season] by evaluating which retailer is going to offer the best prices for the things the kids really require." According to the survey of 10,000 U.S. households with school-age children, people were expected to spend about the same on essentials like clothing (an average of $275, about the same as last year), while cutting back on luxuries like computers, software and printers (an average of $189, down 11% from last year). They are also expected to cut back on shoes ($105, down 10%), supplies ($95, down 5%) and books and study aids ($20, down 25%). Meanwhile, consumers are expected to do more shopping at discount retailers than anywhere else, with 95% saying discount stores were their preferred back-to-school shopping channel -- up 12% from last year. Some 55% cited department and office supply stores as their preferred channel (the same and up 10%, respectively, compared with last year), while half cited online (up 25%). Only 30% cited specialty outlets as a preferred shopping channel, down 6% from last year. "We've been seeing this pattern since before the recession," Passikoff tells Marketing Daily. "People are being much more laser-targeted about which [retail] brand will provide them the best value." Among those discount store brands, Wal-Mart remained the most popular, with 70% of consumers citing the store as a preferred store (up 10% from 2008). Half cited Target (about the same as last year), while 40% cited Kmart, down 5% from a year ago.) Among department stores, Kohl's led among consumer preference with 40% (up 15% from last year), while 35% cited Macy's (down 5% from last year) and Dillard's (about the same). Nearly a third -- 30% -- cited Sears as a preferred retailer (up 5%), while 15% said Sears was a preferred retailer (down 5%). "Wal-Mart has spent the past decade getting the brand right for themselves," Passikoff says of consumers' continued preference for the retailer. "And they have broader merchandise offerings than they have had before. With all the companies outsourcing production to the same places, the quality is about the same, and Wal-Mart has been able to capitalize on that." Ultimately, as the recession eases, consumers will still be looking for value, and may have decided that some products will not be worth the extra expense at some retailers. The answer, Passikoff says, will be to have a greater brand definition, both for the merchandisers and the manufacturers. "Consumers are going to be looking for brands that have a resonating meaning and differentiation," Passikoff says. "They're going to have to stand for something more than being a placeholder."
The recession is taking a toll on travel industry loyalty marketing and rewards programs, according to Colloquy research on U.S. consumer attitudes and perceptions. Travel programs have seen a 31.2% decline in active participation since 2007, which means the general population actively participated in 1.5 travel-related loyalty programs in 2009 compared to 2.18 programs in 2007, when the research was last completed. The travel-specific results indicate that customers are consolidating their spend with fewer hotels and fewer airlines as the travel-whenever-you-want-for-business "bubble" has burst, and consumers are no longer able to earn elite status in multiple programs. But there is an upside. Travel marketers can take advantage of this situation to lock consolidating former frequent travelers into their particular program, says Colloquy Editorial Director Rick Ferguson, who co-authored a white paper with Kelly Hlavinka, based on the research. Those marketers will emerge in a stronger competitive position when the economy recovers and travel ramps back up, he says. "As business travelers are traveling less for the short term, marketers can really focus on these customers and focus on the retention of these fliers," Ferguson tells Marketing Daily. "It requires smart analysis of their customer data base to know which customers are worth spending the extra effort to try to retain." Airlines need to look not just at miles logged but travel patterns and the types of fares bought. "That's really going to help them decide," he says. "They need to make sure they get those limited marketing dollars in front of the right customers." Ferguson gave the example of Delta, an airline he frequently used before travel cutbacks, going the extra mile to retain him and encourage him to travel with them. Delta gave him medallion qualification miles so he could retain his platinum status. "They looked at me and decided I was a flier worth keeping," he says. Colloquy's travel program research shows that just 48% of respondents would be disappointed if their travel rewards program was discontinued, a lower disappointment rate than for any financial services or retail programs. Affluents, at 67.4%, reported a higher level of participation in travel reward programs than any other demographic segment. In one of the survey's most surprising results, Millennials view Travel rewards more favorably than any other demographic segment, with 35% saying travel rewards are of increased importance in the recession economy -- significantly higher than the next-closest demographic segment, core women, at 30.1%. Young adults typically have the weakest purchasing power in the travel category, but they view travel rewards programs more favorably than any other demographic group. "This finding reveals that loyalty marketers have a once-in-a-lifetime opportunity to demonstrate program value to the next generation of U.S. consumers," Hlavinka says. Colloquy's April 2009 online survey respondents are broadly representative of the U.S. population within each consumer segment. Colloquy obtained a total of 2,152 completed survey interviews.
In the first branding campaign in its 50-year history, Pizza Inn is using humorous TV spots to position itself as an easy family meal solution. The tag line: "The one thing any family can agree on." A 30-second commercial, for example, features strange-looking, dressed-alike male adult twins eating in synchrony. The habit, observes their father, "was OK when you were kids, but now it's just creepy." Loud squabbling ensues among the three, but Mom restores civility by observing, "The pizza's good, huh?" All, of course, must agree. Two 60-second variations focus on the pizza's ability to restore harmony in the face of badly chosen gifts. This is also the first television campaign created for Pizza Inn by Boulder's TDA Advertising & Design, which became the chain's agency a year-and-a-half ago. While television is far from new for the chain, its advertising to date has been promotion- or event-oriented, says Jenny Thayer, TDA account manager for Pizza Inn. The commercials began running this month. Franchisees handle their own local media buying. Headquartered in The Colony, Texas, near Dallas, Pizza Inn, Inc. franchises more than 300 restaurants -- 250 in the U.S. -- and owns two. Domestic units span 17 states, primarily in the Southeast (Virginia to Missouri and Florida to New Mexico). Chain-wide, annual sales exceed $133 million. For its fiscal '09 third quarter ending in March, the company reported a 3% decline in total domestic sales. Q3 EPS declined from $0.09 to $0.05, but was flat year-over-year adjusted for income taxes incurred in the quarter. In the first nine months, diluted EPS declined from $0.21 to 0.09. President/CEO Charlie Morrison reported that the company expects performance to improve as a result of a new, buffet-style prototype that will drive new franchise openings going forward and a recently launched royalty incentive program for existing and new franchisees.
"Once upon a time, there was a talented young girl in PR called Vanessa. Vanessa rocked PR: she wrote like a pro, could spin fabulous yarns and had relationships with masses of journalists and media outlets around the land.And then something scary happened... A big, bad monster called Social Media came to town. He hung out in the shadows at first, taunting people with his new isms and new way of connecting with others. Vanessa and the townsfolk couldn't work him out - they were afraid because they'd never seen anything like him before. The tension and unease mounted with Vanessa and the townsfolk scurrying back to their safe PR havens until one day BOOM, the Social Media Monster came out of hiding. But he turned out to be a really cool guy, hooked up with Vanessa and they lived happily ever after. The End." Clearly that's a fairy tale because for many PR agencies, working or even grasping social media is a nightmare. So the PR industry is challenged by social media? In a word, yes. Taking a page out of my own company's book, the emergence of social media and the speed at which it has infiltrated the marketing lexicon, as well as our clients' expectations is indeed frightening. Where do we start? What do we do? What are the rules? So I'm going out on a limb here and being a dunce at asking these questions, but really, what are the answers? And who is going to tell me? The rise of the "Social Media Expert" With every tweet, with every friending and with every mashup it seems another expert is born. But just because you do, does not mean you are -- did nobody tell you? We spend years studying, learning, picking apart marketing strategies, trying to understand behavior, coaxing out our communication skills and in one fell swoop, overnight anyone and everyone who's posted or Tweeted is an expert. I am sorry, I just don't buy that. An expert in PR I may be, but social media I am not (yet). Higgledy piggledy, my best friend? Like any disruptive innovation, social media has come at a time when everything in our lives -- online and offline -- has changed so dramatically. We could almost document the rise of social media over the past 18 months of turbulence in the US and abroad. So it's no coincidence that social media will become the marketing be-all as we kick off a new decade: social media will be to 2010 what email was to 2000. We're starting this journey and mapping out a new course, making it up as we go along, friending each other -- PR and Social Media -- until we get it right. There are many lessons to be learned and like anything new, there are bound to be mistakes. Practice, after all, makes perfect. Companies big or small are not immune to public ridicule in having "tweeted" out of line or handled a social media crisis poorly. Corporate Tweeting now comes with a 25-page "how to" manual. PR companies, digital marketers and corporate Tweeters - we are bound to mess up along way. The point is that most of us simply don't know until we try. The jumping-off pointSo here's where it gets sticky, as far I see it. The jumping off point is that conscious decision we make to dive in head (or feet) first and immerse ourselves in all things social media. It's the point where we say, as a PR company, "We have to embrace social media now and incorporate this into all that we do or we'll just die. It has to become part of our DNA - this is not an add-on like a regional market to distribute press releases. To be sure, we'll never lose sight of our true core of expertise -- that is after all why we rock -- but now we can expand this to include what the market wants and what the future will demand of us." Some in the PR industry have already taken the leap and jumped. I have. It's called evolution and it's what will set certain PR companies out from everyone else. Ready to jump now? Editor's note: If you'd like to contribute to this newsletter, see our editorial guidelines first and then contact Nina Lentini.