While the storm had a big impact on the worst time of the month for auto sales and will continue to affect the industry in the short term, the essentially strong fundamentals continue with most companies selling in the U.S. reporting good numbers. Toyota, Honda, the Korean brands, General Motors, Volkswagen and luxury brands all reported positive sales (Ford was even with last year.) Chrysler Group LLC reported U.S. sales of 126,185 units, a 10% increase versus last year, with Fiat up 89%. While Nissan's eponymous brand saw a 3.2% slip, luxury brand Infiniti's vehicles were up 27.6%. While overall Ford sales were flat with last year, their sales of small cars, including the Escape compact crossover, were the strongest for October in 11 years – with a 54% percent increase year over year. And sales of the F-Series were its best since 2004. Toyota reported monthly sales of 155,242 units in the U.S. in a 15.8% increase; American Honda announced an 8.8% increase versus October last year, with the Honda division seeing an 8.7% and Acura a 9.4%. Kia reported its best-ever October in the U.S. But the hurricane definitely put a brake on sales at the end of the month, which is when they are typically strongest, notes TrueCar chief analyst Jesse Toprak. "We didn't think it would affect sales, but it had a significant impact. People stopped buying things big, and that began even before the storm arrived," he says. "It hit at the worst possible time for auto sales." Toprak says for some retailers, the last few days account for some 40% of monthly sales. But the shortfall wasn't huge in the scheme of things -- 20,000 to 30,000 units. And he says the long-term impact will be net positive because when insurance pays out for flood and flood-related damage people will rush to dealerships to replace ruined vehicles. But that will really pick up in about 60 days, per Toprak. "That's the cycle, but some will buy in two weeks, some in two months. A couple of automakers and probably more later are sweetening the pie: Nissan is offering employee pricing to those affected. Ford Motor Company is offering customers in the Mid Atlantic and Northeast $500 Bonus Cash savings off vehicle MSRP toward the purchase or lease of any eligible 2012 or 2013 model year Ford or Lincoln vehicle. Also Ford Credit is, through its Disaster Relief Program, letting qualified customers delay one or two monthly payments, resuming their regular payment schedules when their situations improve.
In these increasingly volatile economic times, companies need to find a balance between optimizing their services through automated systems and maintaining (or, when possible, growing) their personal relationships with consumers. A new study from the Massachusetts Institute of Technology’s Sloan School of Management suggests the best way to find the balance is a practice the authors call “softscaling.” “To survive today, businesses actually need to be more – not less – connected to their customers,” says Peter Weill, chair of MIT’s Center for Information Systems Research, and one of the study’s authors. “’[Softscaling] is a powerful right brain/left brain approach with the empathetic use of data being the connection between the two sides.” For the research study, Weill (along with Ritu Agarwal, a University of Maryland professor) looked at the top five performing companies in India and found they all use some version of softscaling (though they may have referred to the practice as something different.) Some of the companies, like Tata Motors, blend their optimization and data analytics with real-world experience, where plant workers and engineers headed to local tea shops to discuss the company’s products with consumers. The company has since increased the amount of those conversations by using digital communication technologies as well, Weill says. Another company, HDFC, uses optimization tools to offer mortgage products to consumers, but it enables its local officers to grant exceptions and waivers in many cases. The result is an extremely low default rate of 0.9% and a loyal customer base, Weill says. Remarkably, very few Western companies have adopted the softscaling approach, he says. “If you exhibit emotion, it’s often seen as a weakness [in the Western business world],” Weill tells Marketing Daily. “I think we’ve gone too far in that direction. The automated voice systems are an example of that.” One western company that has been managing softscaling in its operations is financial services company USAA. The company, which serves veterans and their families, has organized its products around life events, giving it more of a connection to what its customers might want rather than having them go through a laundry list of options that are not relevant for their needs. Weill suggests other companies find similar ways to apply customer needs to their business models, particularly as they look for more technological solutions for customer service issues. “The secret to an emotional interface on an app is to do a few things really well, and if it gets too complicated, you need to talk directly to a person,” he says. “And we need to be much tougher about only automating the things that need to be automated.” Social Communication from Shutterstock
GNC will launch the second phase of its “Live Well” campaign in January with TV, out-of-home, print and online. The campaign which began 2011, aims to continue to strengthen GNC’s brand and broaden its market appeal to a whole host of new consumers, encouraging them to live a healthier lifestyle. The Pittsburgh-based specialty retailer of health, wellness and sports nutrition products will unveil a fully integrated branding, marketing and communications program coast-to-coast, including a refresh of all in-store graphics, digital and social media and consumer messaging. As society faces rising health concerns and costs, GNC aims to lead the way in providing information through in-store personnel and products that, combined with exercise and proper nutrition, improve the health of consumers, according to the company GNC has tapped the original creative force behind the GNC Live Well campaign, Peter Arnell, who created the original “Live Well” effort, assumed responsibilities in both creative and strategic marketing development, and will work to extend brand continuity across all media types. The company’s marketing communication and branding efforts will focus on helping to provide inspiration and support to those who seek a better, healthier lifestyle, said Joe Fortunato, GNC chairman and CEO. GNC has more than 7,800 locations, of which more than 6,000 retail locations are in the U.S. (including 933 franchise and 2,157 Rite Aid franchise store-within-a-store locations) and franchise operations in 55 countries (including distribution centers where retail sales are made).
There are big changes afoot at Ford Motor at the highest levels. The Dearborn, Mich.-based automaker's executive chairman, Bill Ford, said that Alan Mulally will stay on as Ford president and CEO through at least 2014. Rumors had been floating about that he was planning on retiring and moving Mark Fields, VP of the Americas, to a higher position. That will happen, as Fields is the company's new chief operating officer, effective Dec. 1. Mulally will continue leading the long-term strategic development of the One Ford plan, which is the automaker's global product-efficiency strategy. Global marketing chief Jim Farley will continue with a focus on rebuilding Lincoln as a global luxury brand. Fields will still to report to Mulally. Says TrueCar.com's Jesse Toprak, senior analyst, "Mark Fields is the natural choice for the COO post for Ford as he is an excellent strategist with a deep understanding of all facets of the company," adding that since the bulk of Ford's growth will come from outside of the North American market in the next decade, Fields is the right COO. "The European market can particularly benefit from Field's carefully calculated progressive management style." A new study by Detroit-based Phoenix Marketing International lauds Ford for its consistency in marketing messages, which has been instrumental in improving the brand's perception levels among consumers. Ford had, during the late Nineties and through the mid-2000's, ambled along with middling perception at best, driven mostly by trucks. But its car resurgence and consistent messaging have given it a stronger position vis à vis Toyota, per Phoenix and based on a poll over 5,600 in-market consumers. The firm's senior analyst, Kevin Severance, says Ford and Toyota's high rankings in the study have to do with the brands having adhered to a focused, active messaging strategy. He said Ford benefits both from its role in American automotive history and from consumers’ regard for how it weathered the economic downturn. He notes that it has also been helped by aggressive social media campaigns supporting vehicles like Fiesta, Fusion, and Focus. The most recent such effort was the "Random Acts of Fusion" program with a web-based program that uses celebrity Ryan Seacrest. Meanwhile, with Fields' new position, the following operating units will report to him: The Americas; Europe, Middle East and Africa; and Asia Pacific, Product Development; Manufacturing, and Labor Affairs, and a lot of other functional divisions. Other changes: Joe Hinrichs, currently group vp and president of Asia Pacific and Africa, will be executive vice president and president of The Americas; Stephen Odell will be executive vice president and president of Europe, Middle East and Africa. David Schoch is named group vice president and president of Asia Pacific; Schoch is currently chairman and CEO, Ford of China. John Lawler has been elected Ford Motor Company vice president and named chairman and CEO of Ford Motor China; Lawler is currently CFO, Ford Asia Pacific Africa.
U.S. retail sales of snack bars more than doubled over the past decade, continuing strong growth throughout the recession, according to a new report from Rabobank's Food & Agribusiness Research and Advisory group. Snack bars realized an enviable compound annual growth rate (CAGR) of 6.4%, and will reach a projected $6 billion this year. That far outpaced savory snacks (chips and pretzel sales had a 3.5% CAGR, to reach $34 billion in 2012), as well as the 2.4% CAGR of overall packaged foods. Growth-drivers include snack bars’ broad, multi-purpose appeal and their on-the-go convenience; the shift to snacks replacing as well as supplementing meals (snacks now account for about one-third of adults’ daily calories, according to the U.S. Department of Agriculture); and broad retail distribution (gas stations and delis, as well as mainstream retail food channels) that encourages impulse purchases. “Snack bars are one of the few bright spots in today's U.S. processed food market,” says Rabobank analyst Nicholas Fereday, author of the report. “By capitalizing on consumer trends and evolving demographics, snack bars have found broad appeal among a large consumer base that ranges from athletes to couch potatoes, from working mothers to professionals on the go. Even so, not every brand is a winner.” Winning Brands Within the snack bar market (which spans breakfast, energy and nutrition, fruit, granola/muesli, and other bars), energy and nutrition bars account for more than one-third of sales, and had an impressive 9% CAGR between 2007 and 2012. Most of that energy/nutrition bar growth has been driven by a single marketer, Clif Bar & Company, according to Fereday. “Clif's socially conscious credentials, hip image and emphasis on taste and quality ingredients have made their Clif, Luna and Mojo brands a hit with consumers and a market leader since 2008,” he says. Twenty-year-old Clif Bar rarely advertises in mainstream media, preferring to rely on sports sponsorships, social media and word-of-mouth to secure its lead in the energy bar segment. Clif, along with Kellogg and General Mills, have seven of the top 10 snack-bar brands and a combined share of nearly 60% of the total category. Kellogg, the leading overall category brand, has successfully expanded breakfast brands Kashi, Rice Krispies, Nutri-grain and Special K across multiple snack-bar formats. General Mills owns about a quarter of the market, and its high-profile campaign around improved nutritional content has driven strong growth for its Nature Valley, Betty Crocker, Fiber One and Larabar brands, confirms Rabobank. Snack-bar extensions of candy brands have been less successful, however, suggesting that consumers perceive a disconnect between names associated with candy and the wholesome, active associations around snack bars, Fereday points out. Growth Potential Still ‘Huge’ Although snack bars have been around since the late 1980s, when the PowerBar took off, there’s still plenty of room for growth, according to Rabobank. Consumer demand for convenient-but-healthier food options shows no signs of waning, and will drive the energy/nutrition and breakfast-bar classes, in particular, points out the report. In addition, like Kellogg and General Mills, other companies have brands in categories that have potential for extension into the snack-bar category; and snack bars (like potato chips) are an excellent platform from which to launch new varieties. Further, Fereday sees a significant opportunity for snack-bar makers to partner with the foodservice industry and QSRs in particular, as these chains seek to open up new day parts to drive sales.
Now that Sandy has been designated a “superstorm” (and who decided that, and why?) it seems that in the last four days, Northeasterners have cycled through five or more stages of grief, even though “severe cabin fever” or “fury at Con Edison” might not register on the classic Kubler-Ross model. In the ‘burbs, some of those affected started talking to their neighbors, borrowing tools, sharing food, and going to bed early -- positively reliving “Our Town” values. Some city residents who lost power used the time in a similarly early-20th-century way, playing board games, reading by candlelight and concocting Rube Goldberg-like cooking apparati. Post-upset, are we more or less likely to want to blanket ourselves again in technology? I should point out that the losses so far have been heartbreaking and devastating, and millions are still without power. There is more suffering to come, no doubt, and I don’t mean to minimize it by joking. But stories like how a downtown Thai restaurant managed to operate via automobile battery power (and extension cords out the window to the car parked at the curb) remind us of how remarkably resilient and ingenious we are. Once Sandy began packing a punch Monday night, it was all the more frustrating because it was so sudden: We had already endured much nothingness, waiting all day in the “bracing for Sandy” mode. To the naked eye, it was raining, lightly. So the violent winds, surges, sudden explosions and power outages that followed by nightfall seemed rabidly apocalyptic. I updated my status with: “Will the world end with a posting on Facebook?” I got lots of clever responses, including: “No, it will end with some good-looking young reporter doing a live remote and bloviating on the obvious.” Indeed, the wall-to-wall coverage, interrupted only by annoying, repetitive political commercials, was hard to take -- especially before anything had happened. I had watched a local CBS reporter scouring Red Hook for someone to interview. She finally found a resident idiot in a fleece hoodie wandering around, and asked him how he was preparing for the storm. “Just picking stuff off the floor,” he responded. That was helpful. Then Sandy got really scary. For my money, there is nothing more terrifying than the thought of rivers of sea water and sewage pouring into -- and blocking -- dark city tunnels. That’s the stuff of your basic disaster film, which in the case of Sandy, turned into a war movie and then something straight out of a sci-fi drama, with nature reclaiming itself. All that was missing was an alien invasion. The similarities to well-known images from futuristic thrillers like Spielberg’s “A.I.” and “The Day After Tomorrow” were also unsettling. Both films feature visuals of flooded New York landmarks, bobbing like the anthropological finds of ancient civilizations. When parts of the boardwalk and fixtures of the now-ironically named FunTown Pier in Seaside, N.J. ended up swept out to sea, including the upside-down iconic StarJet roller coaster, the graphics seemed to be art-directed by Spielberg himself for maximum poignance. At the same time, the current high-concept, dystopian NBC show “Revolution” seems to have nailed one possible post-Sandy scenario. It’s set in the future, when all the power sources using electricity have mysteriously shut down. The pilot showed the carcass of a car being used as a vegetable planter; the citizens have returned to a pre-industrial hunting-gathering life and are hardy, self-sufficient, agrarian citizens. It sounds idyllic for those who dream of living off the grid and off the land -- except for the roving bands of militia. (Given the severity of the reported gas shortages in New Jersey, might we expect to see roving bands of dads in khakis, working up to tattered Mad Max leather, holding up gas stations?) Image-wise, floods are powerful, and contradictory: they suggest global warming, in all of its modern, greedy, rapaciousness, and at the same time, conjure up the story of Noah’s Ark and the ancient, anti-science Bible. The best summation of Sandy so far comes from Governor Andrew Cuomo, who said yesterday at a press conference: “We have old infrastructures and old systems, but yet seem to get a 100-year flood every two years.” A weather system like Sandy is punishing, regardless, whether you believe in retribution or Al Gore. In a famous poem, Robert Frost questioned whether the world would end in fire or ice. In the case of Sandy, we were done in by a combination of water, wind, and trees. But perhaps what’s most upsetting about a flood is that it wipes away any mark we have made on the earth. We want to think that we can salvage our experiences somehow -- that they mean something, and that with all the advances in technology, that they will live on. We can certainly strengthen the power grid, and update the infrastructure, and it will help. But in the end, the sad truth is that any illusion we have of control is just that, an illusion. ”Sandy, I’m breaking up with you,” one of my clever Facebook friends said. If only it were that easy to quit her.