Rumors, innuendo and, of course, sources have been saying for weeks that Jeremy Lin, the New York Knicks point guard, wunderkind, and H-bomb, would be tapped by Volvo to tout the company's cars in China. Well, the rumors were entirely correct, just a bit too narrow. Lin will tout Volvo in the U.S., too. At Volvo's Chelsea Pier press conference on the partnership Monday, the audience was almost entirely Asian, the press rows packed with fawning women from various Asian and Asian American news outlets and, presumably, the Pacific Rim version of Tiger Beat, judging from the questions ("If you were a Volvo car, which car would you be?" and "Have you found a church yet?" (Though that latter one might have actually been "Have you founded a church yet?") Maybe it's whimsical, but one hoped to see perhaps a Scandinavian or two in attendance, if only for old time’s sake. But even though Volvos are still manufactured in Gothenburg and other Swedish locales (and Ghent, Belgium), it's clear where the compass points: China, where Volvo is based, for all practical purposes. To punctuate that was the presence on the dais of Freeman Shen, VP of international operations at parent Shanghai-based Zhejiang Geely Holding. He also serves as SVP Volvo and chairman of Volvo in China. He said Lin will be Volvo's brand ambassador to reach younger people interested in luxury cars. The company will wrap a message around Lin that Volvo is more youthful, active and dynamic, and a progressive luxury car, he said. Also present were two Americans, John Maloney, president and CEO of Volvo Cars North America, and Richard Monturo, VP global marketing, sales, and customer service. Maloney said Lin would be used in U.S. marketing and promotional messages starting this year. "[Lin] has become a global cultural phenomenon. He really embodies the best of the human spirit, optimism, humor, commitment and compassion. He is an excellent fit for Volvo." Monturo said Volvo's deal with Lin is for two years, with the first commercials leveraging Lin likely to come out this summer. Lin commented that his family was involved in his decision to pitch Volvo, and Monturo added that the family will also likely be involved in some way in the ads. It's worth noting that Lin is pretty savvy at viral media, with a popular YouTube channel that he populates with self-made videos. "We will use his humor and his ability to tell stories," said Monturo. "We intend for it to be a collaborative co-creative relationship, working with him and his family at the concept and production stage." Monturo added that the company won't use him for specific vehicles but for the entire lineup. "We have models that are fun and youthful, dynamic and sporty, rugged and strong. When you see his versatility on and off the court, there is a lot we can do to tell different aspects of our brand story coupled with aspects of his own story." Lin guaranteed there would be no "Linsanity" ads (though one imagines some dealer will run promotional Tier III ads to the effect that the deals are "absolutely Linsane".) "The thing that attracts us to him are his qualities as a person. It's terrific what he's doing on the court, but he is also the first NBA player in 57 years with a Harvard degree, and he's the most-searched athlete in China," said Maloney. "It's this star power and personality which is the reason we wanted to partner with him and tell the story."
The latest indicators confirm continuing recovery for the long-beleaguered restaurant industry. Notably, the U.S. Census Bureau’s retail sales estimates for February show restaurant sales hitting a new record high for the tenth consecutive month, the National Restaurant Association pointed out. The “food services and drinking places” category recorded total sales of $43.4 billion for the month (adjusted for seasonal factors and trading days). That was up less than 1% versus January 2012, but up 8.2% versus adjusted February 2011 sales for the industry. Furthermore, for the 12 months through January 2012, sales at full-service restaurants were 8.7% higher than in the previous 12 months –- the fastest growth pace since the late 1990s, when the economy was booming, reported The New York Times. The sales gains at full-service restaurants -– which range from moderately priced fast-casual chains to top-end establishments -– also considerably outpaced those of limited-service restaurants or QSRs, which fared the worst of the recession far better than their sit-down counterparts, as consumers elected to trade down for their less-numerous eating-out occasions. Moreover, over the past 20 years, stronger growth in full-service restaurant sales and slowing of growth in limited-service sales have generally coincided with growth in gross domestic product/economic improvement, Times economic writer Floyd Norris points out (although he also noted that current economic indicators indicate that the economy is growing more slowly than the full-service/limited-service restaurants trend indicator, which may in part be a factor of the different timing of reporting for these numbers.) The data show Americans now spending about $220 billion per year in full-service restaurants, $211 billion in limited-service restaurants, and $21 billion in bars. While Americans are coping with significantly higher gas prices (those jumped 6% in February), grocery prices were flat for the first time since July 2010, and wholesale food prices edged down 0.3% (following declines of 0.5% and 0.7% in December 2011 and January 2012). Perhaps in part reflecting less inflationary pressure on restaurants’ costs, menu prices posted their smallest monthly gain in more than a year in February (+0.1%), down from 0.4% in January. While restaurant operators of course seek to improve their margins by raising prices and/or check size wherever feasible, stable or moderately higher restaurant costs may also be encouraging the trend to dine out more frequently. In addition, the National Restaurant Association’s industry tracking data continue to show optimistic trends. In January, its overall industry health index, the Restaurant Performance Index (RPI) stood at 101.3. While that was down from December’s strong level of 102.2, January marked the third consecutive month that the RPI stood above 100, which signifies expansion based on various key industry indicators. “Restaurant operators reported positive same-store sales for the eighth consecutive month, and a majority of them expect business to continue to improve in the months ahead,” reported Hudson Riehle, SVP of the association’s Research and Knowledge Group. In addition, Packaged Facts recently estimated that U.S. restaurant sales will grow 4.2% in 2012, on top of 6.1% growth in 2011. The research firm also estimated 8.1% growth in full-service restaurant sales last year, including a slight rebound in fine dining (although it added that the return to 2007 spending levels remains a “very steep curve.”) Mintel, too, recently reported positive indicators based on its consumer tracking. Fully 65% of respondents who had visited a restaurant in the past month indicated that they will spend the same amount at restaurants in 2012, and 12% plan to spend more this year. Among that 12%, 59% said they will spend more in casual restaurants, and 57% said they will spend more in family restaurants. Of course, along with the economy, the restaurant industry is not out of the woods just yet. As Packaged Facts noted, U.S. households with incomes of $100,000 or more account for more than a third of restaurant spending, although they comprise just 17% of total households. And while the numbers of higher-income and lower-income households has grown since 2007, the number of middle-income households has declined. “Because restaurant spending correlates to household income, the crimping of the middle class is a major hurdle for the industry, as it is of course for the national economy overall,” noted Packaged Facts’ analysts, in its “Foodservice Landscape in the U.S.” report. Also, while total sales for U.S. full-service restaurants grew considerably last year, many went out of business. The number of these restaurants declined by 12,000 operators, or 3.8%, according to CHD Expert, a foodservice research provider. Limited-service restaurants saw fewer closures: down by 4,000, or 1.3%. However, fast-casual chains offering “fresh, diverse” menus continued to thrive. In addition, “American traditional” and “American regional” menu types increased by more than 7.5%, and Asian restaurants, and bars and grills increased by more than 2%, CHD reports.
As much as it has grown in the past two decades, the Internet is set to become an even more disruptive economic force in the next five years as more developing countries begin to expand their access, according to a new study from the Boston Consulting Group. According to the BCG, which surveyed approximately 1,000 consumers in each of the world’s 20 largest countries, roughly half of the world’s population (3 billion people) will use the Internet, and the so-called “Internet economy” in those G-20 countries will be $4.2 trillion by 2016 -- up from about $2.3 trillion in 2010. “The speed and scale of change that the Internet is responsible for driving in all sorts of businesses is really remarkable,” David Dean, senior partner at BCG and coauthor of the report, tells Marketing Daily. “It’s very fair to say that the change that will happen in the next three to five years is far, far larger than any other change that has happened in the past 10 to 20 years.” Much of the coming explosion in growth will come from developing countries, where Internet connections are still being made, smartphone adoption is nascent and consumers have yet to gain comfort with online retail channels. But once those hurdles are cleared, Dean says, the explosion of the Internet economy will be huge -- particularly in places where offline retail shopping is less pleasurable. “[In many developing countries], the experience of buying online is much more exciting and pleasurable than going to some dreary store,” Dean says -- noting that the percentage of online shopping could be much higher in those countries than in the U.S., where the online shopping rate stands at 5% of total commerce. “Everywhere you go in the U.S. you’ve got stores and shopping malls and there’s a retail experience close to hand. Consequently, there’s somewhat of a lower need to go to online.” At the same time, the report attempts to put a dollar value of the Internet’s value for consumers in these various markets. In the U.S., for instance, consumers said they would have to be paid, on average, $2,528 a year (or 5.4 times what they pay for access and services) to live without Internet access. Twenty-one percent said they would be willing to give up sex for a year in order to keep their Internet access; 77% said they’d forgo chocolate; 43% said they’d give up exercise and 7% said they’d give up showering. The study also found that younger consumers would have to be paid more to give up their Internet access and services, but Americans over 55 would also require more than the average, Dean says. “That’s partly because it’s a new experience that they’re beginning to get their arms around and they see the value in it.” The full report can be found here.
While GM and Ford have been reducing their brand portfolios to four and two, respectively. Chrysler Group has been enlarging its. The automaker, once a three-brand manufacturer, has doubled the count since being under the aegis of Fiat S.p.A. Now there's Chrysler, Jeep, Dodge, Fiat, Ram and SRT (the latter is a performance marque that the company this year is turning into its own brand.) Marissa Hunter, head of advertising for the Ram truck brand, joined Chrysler in 2009, before it parted ways with Dodge. Though new to the company, she was part of that process. This year, Hunter is involved in an array of marketing efforts from country music to equestrian event sponsorship and a new ad campaign, "Giant." In this two-parter, Hunter tells Marketing Daily how the automaker is bolstering Ram's equity as its own brand. It's not an easy task. Even as we chatted, I frequently found myself saying "Dodge" by accident, and she conceded that I'm not alone. "It's a learning process." Q: Ram's first big campaign since the split from Dodge was last year's "Code of the West" that launched the "Guts. Glory. Ram" tag line. I recall that the campaign used an Old West theme to differentiate the Ram brand by talking about vehicle features. Was it to set up what the brand is supposed to represent?A: The whole approach was to introduce what the brand stands for using that initial 60-second spot which talked very much about the "code": taking care of people, doing the right things, honoring your promises and commitments. That a handshake was a deal. We used that concept as a way to send a message to consumers that this is how the Ram brand operates. That we have a responsibility to our customers, and that we are going to build our products to their expectations, and we are going to deliver on our promises. Using that parallel of the Old West as a breakthrough, as a fresh unique creative platform, got that message out there. Following that, we did focus 30-second executions on what our competitive advantages are. It was also the first time we did a dedicated message around the Power Wagon, an incredibly capable off-road pickup, and that's continuing to air on TV. Q: How about the tag line, "Guts. Glory. Ram?A: We arrived at that through an extensive study about where we were, how far we've come and where do we want to go. We got there because it's the idea that we are doing the right things for the right reasons as a brand -- and have the internal guts and fortitude to make the decisions that give consumers the glory. It is a theme line that will continue in campaigns we release going forward. Q: Why was the separation from Dodge the right move?A: As an independent brand, there are indicators we are succeeding. We have made significant inroads with sales and share. There are indicators we are also making inroads -- significant improvements -- in terms of ALG residual value analysis. As a stand-alone, and evaluated as such, the data points are moving north. Q: But what about from a marketing standpoint?A: We have identified a series of key customer targets -- lifestyle groups and vocational groups -- we want to talk to and a very specific way with very specific insights in terms of how we know they use trucks. When we were bundled and under one halo brand that is trying to market cars, SUVs, minivans and pickup trucks, the ability to have a very unique voice and that stronger point of view in light of the truck buyer's demands was more difficult. Now that we are truly a truck brand, we can talk to people we know really drive trucks in a voice that we know relates to them and more directly connects to them. Q: But Ram has marketed around country music under the Dodge brand ...A: There is something very deep in the connection between country music, American values, and full-sized pickup trucks. So we did some of that before, but I think what's easier strategically now is that there are fewer influencers, if you will. We don't have to worry about talking to someone who might be in the market for some other vehicle in the portfolio. The consideration of how the message might affect all of the audience is more focused now. Because “all of the audience” means truck buyers.
Americans are in the mood for marshmallowy chicks, jellybeans, and new spring outfits, with the National Retail Federation predicting an 11% jump in Easter spending this year. Total Easter spending is expected to hit $16.8 billion, or about $145.28 per purchase, compared with $131.04 last year, despite big jumps in gasoline prices. Candy is far and away the most popular seasonal purchase, with 89.3% of the respondents planning on spending more than $2 billion on traditional favorites. Per person, that amounts to about $20.35, up from the $18.55 spent on confections last year. And brands are going all out to woo those shoppers. Peeps, marketed by JustBorn, based in Bethlehem, Pa., says it is touring the Midwest and South with its Peepster “chick” car, “sharing random acts of sweetness” and Facebook updates of the tour in such cities as Chicago, Memphis, Dallas, Houston, New Orleans, and Atlanta. And Jelly Belly has built a 10-foot replica of Chicago's "Cloud Gate" sculpture, made entirely from 120,000 Jelly Bean Chocolate Dips, and is displaying it at the Jelly Belly Visitor Center in Pleasant Prairie, Wis., through May 1. The NRF survey, conducted by BIGInsight, also reports that consumers are keen to go clothes shopping, with 48.5% planning to spring for some new duds, spending $3 billion. They’ll also spend more on holiday meals, with the average person ponying up $44.34, compared with $40.05 last year. In addition, they say they plan to spend on average of $20.57 on gifts, $10.50 on flowers, and $9.07 on decorations. And 53.6% say they will purchase greeting cards, spending about $7. In good news for department stores, shoppers say they’re coming back, with 42.6% of the survey declaring plans to shop there. (The NRF says is the highest in the survey’s history.) Discounters are still the main destination though, named by 63.5% as the favorite place to shop for Easter.
Hotel websites are increasing share of bookings in every quarter of 2011 among both business and leisure travelers, according to TravelClick. Room nights booked through hotel websites grew 6.8% in the fourth quarter compared to the same time in 2010, according to data from the Fourth Quarter 2011 TravelClick North American Distribution Review (NADR), which aggregates hotel bookings by channel for the transient travel segment (individual leisure and business travelers). Other distribution channels, such as online travel agencies like Expedia and Hotels.com as well as global distribution systems used by travel agents, also grew, but not as much. Online travel agencies grew 5.7% while global distribution systems grew 2.8%. Overall in the transient segment, online travel agencies accounted for 11.4% of all hotel rooms booked for the fourth quarter; global distribution systems accounted for 19.3%; hotel websites (brand.com) accounted for 26.5%; direct bookings accounted for 25.0%; and voice, or 1-800 numbers, accounted for 16.7%. "While a hotel's website continues to drive more and more bookings for hotels, it is important to recognize that different channels cater to different types of customers, and having an appropriately diversified and optimal mix will drive improved revenue and profit outcomes," said Tim Hart, executive vice president, enterprise services for TravelClick, in a release. During the 2011 calendar year, average daily rates for the transient segment increased across all channels, up 3.8% compared to 2010, with rates for the OTA channel growing 9.8% and hotel websites up 3.5%. For the fourth quarter specifically, ADR in the transient segment increased across all channels, up 3.7%, with rates for the OTA channel growing 9.3% and Brand.com up 2.5% compared to 2010. The TravelClick North American Distribution Review is a quarterly report that focuses on demand performance of booking channels, segments of hotels and loyalty programs. The report is based on reservation and committed group sales data by hotel companies participating in TravelClick's MarketVision Demand Position product. The data is collected in 25 major North American markets, representing 202 million annual room nights and $27 billion in annual room revenue.
Now more than ever, consumers are showing a sense of empowerment and a desire to play a greater role in the creation of the products they use. Consumers are willing and able to co-create with both manufacturers and retailers -- sharing their ideas to fulfill needs that have not yet been met by the market. In this sense, co-creation can go far beyond simple product-customization (e.g. NikeID, where shoppers can build their own shoes from predetermined components and colors). Real forward-looking businesses are opening their R&D doors to the public -- and are exploring a much more symbiotic approach in which consumers actively collaborate and contribute to a product offering. The advantages are fairly clear. New products often fail because businesses inadequately assess and fulfill consumer needs; co-creation can foster a clearer connection with consumers and return more value to them, while reducing the business’ risk of failure and research investment. At the same time, consumers participate for the potential financial payouts, social clout, and/or intrinsic fulfillment from the partnership -- it’s a win-win situation. But co-creation doesn’t come without its challenges; businesses are easily discouraged by the increased complexity and diminished control from additional cooks in the kitchen -- communication management, sharing of intellectual property, information overload and production feasibility can quickly become intimidating as well as and costly. Despite these obstacles, several businesses of late have successfully pressed forward with co-creation in various business contexts. Ideation and Development Early-stage consumer research is commonplace; but opening up innovation and development even further to consumers can allow for unprecedented breadth and depth of inputs. Samuel Adams is letting Facebook fans create their own brew in a crowdsourcing experiment, with an app called the CrowdCraft project. The fans’ collective feedback will determine the new brew’s color, clarity, body, hops, malt and yeast, which will be unveiled at SXSW in March. ASDA, the UK’s second largest supermarket, recently revamped its entire range of ASDA brand food products by secretly hosting over 200,000 blind taste tests with 40,000 customers. Renamed Chosen By You, the brand now sends a clear message of quality by not including anything that has not passed its strict customer taste test. Toyota’s Ideas for Good campaign added an altruistic spin to co-creation by inviting consumers to imagine new uses of Toyota technology, outside of the automotive world, to improve our lives and make the world a better place. Thousands of ideas were submitted from across the country; the winning ideas were selected in May and are currently being developed into working prototypes. Marketing and Feedback Co-creating social interactions online is becoming increasingly popular. While many companies start and stop with forums for consumer comments and reviews, others have thought of new ways to boost awareness, spur trial, monitor experiences, provide support, and improve products after launch -- all by using the help of their own consumers. Mountain Dew’s DEWmocracy campaigns are aggressive programs that allow consumers to vote for the brand’s next flavor, color and name, as well as submit logo designs and product advertisements to be judged by the brand’s own fan community. The latest winning flavor, White Out, was distributed throughout 2011, and a third DEWmocracy is rumored to appear this summer. Doritos’ Crash the Super Bowl campaign is perhaps the crown jewel of co-creative marketing. Out of all the commercials broadcasted during the event, Doritos’ two fan-made/fan-selected spots ranked number one on USA Today’s Panel and Facebook ad-meters. The Takeaway In many ways, co-creation is still young; pioneers are still figuring out how to overcome the diminished control and increased complexity that come with it. But a few things are certain: innovation is evolving before our eyes; the traditional active-business/passive-consumer market construct is rapidly becoming one of the past. Co-creation turns each stage of development into a much more dynamic and creative process that potentially adds considerable value for both sides. Businesses would be wise to begin erasing boundaries they have with consumers and forging deeper collaborative relationships based on transparency and trust. In particular, retailers may be able to leverage the rich card-data they have at their disposal, and utilize their stores as local “labs,” event venues, and/or regional test markets to more effectively access consumers, identify the best ways to collaborate, and encourage consumer participation
I worked for the New York Daily News for one spectacular year -- 1980-81 -- on the copy desk, surrounded by every kind of character. For a kid from suburban Connecticut in her 20s, this was heady stuff. It was also a great year for news of the tabloid kind: Reagan elected!; Lennon murdered!, hostages freed!, Jean Harris convicted!; Reagan shot!; Pope shot!!; Charles and Diana wed! Every day, I got to write snappy headlines with puns galore and edit the copy of city-grizzled reporters alongside Hal, a toothless, bearded man of such girth that he took the freight elevator to the seventh floor newsroom. No one wanted to have to use Hal’s computer when he was off because the keys were sticky with the remnants of Chinese takeout. Hal kept a bottle of Galliano in his bottom drawer and topped off his Styrofoam cup with the stuff all evening long. Others parked six-packs on their desks and slaked their nightly thirst. I and three other young women were hired as copy editors, when the paper decided to put out an ill-fated afternoon edition. For the most part, we didn’t mingle much with the established writers and editors. So it was a wonderful trip down memory lane as I read Paul LaRosa’s Leaving Story Avenue, which has just been published by Park Slope Publishing. Here the people I watched from afar come to life. City Editor Dick Oliver is “a jaguar of a man” who has been “caged all morning. Now he’s free, and everyone is apprehensive. Where will he pounce, who will he chew up?” And Vinnie Lee, “the 400-pound gentle giant who covers the fire department.” One day Oliver sends Lee to cover the circus and the next day a photo of him standing beside an elephant is captioned: “Elephant (left) and reporter Vincent Lee (right.)” “This newsroom possesses a raucous atmosphere and I am more than a little intimidated, yes I am,” writes LaRosa, a product of the projects in The Bronx, who is nonetheless mild-mannered and surprised to find himself in the middle of a newsroom, working as a copy boy. “Nobody holds back, and I’m in the same room, a dirty, sweaty foul locker room. It is a cage match.” There is more, much more, to this book than amusing foibles and crazy characters. This is also a story about growing up Catholic in the increasingly rough-and-tumble projects of New York, where being mugged is the least of his worries. LaRosa comes of age here, where he sits on a bench outside his building with an assortment of friends and learns about life. Gradually, he finds fewer of his friends on the bench, their families having fled in fear. He gets himself through Fordham and lands the copy boy job, where he finds himself sitting on another bench, waiting for the call. When LaRosa’s not striving to land a reporting job, he is chauffeuring his parents and siblings on Sunday drives. There is an achingly sweet tale of driving out to JFK because “none of us have ever been to an airport.” “We stand off to the side so we’re not in the way of these important people who appear to be a different species. It’s hard to shake the feeling that my family and I are immigrants huddled in rags, present in a place we’re not supposed to be.” A flight attendant asks if she can help them find their gate and Paul says, “Uh, no. We’re kind of visiting the airport.” Skeptical, she nevertheless directs him to an area where they can watch the planes take off. “And so we spend our Sunday afternoon, watching the planes take off and sipping sodas. It’s the best family drive ever, and I’m so happy I have a car and we can go places like this.”