This document summarizes the results of a survey on consumer brand loyalty at supermarkets. The survey found that over half of highly loyal consumers reduced or defected from brands between 2007 and 2008. The survey also asked readers how many brands they are currently loyal to at supermarkets. About 41% said they are loyal to 10 or more brands, while 27.7% said they are loyal to 5 or more brands. Some respondents noted limitations in the survey questions.

1.
E x c h a n g e o f I d e a s | November/December 2009 | $10.95
HUB
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M A G A Z I N E
A publication of Reveries.com and Cool News of the Day

2. HUB
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P I VOT P OINT
M A G A Z I N E
NOVEMBER/DECEMBER 2009
Truth, Lies &
Loyalty
L et’s just get this straight once and for all: There is
no such thing as brand loyalty.
Each of us likes certain brands and may even love
26
COVER STORY
them. We may buy them most of the time, or perhaps
even every time. But the idea that we have a true bond Happy @ Zappos
with any brand, like the kind of commitment we have Tony Hsieh whips up a happy culture and enviable
in real life with our friends and family, is a farce. loyalty for Zappos. An exclusive Q&A interview
This doesn’t mean we shouldn’t by Tim Manners.
Loyalty is try to create that kind of loyalty; most
what we of us tell ourselves that’s the end game
8
make it. and it’s always important to aim high.
What it does mean is that we
should take a harder look at how we go about creating
what we call loyalty. ROUNDTABLE
We need to admit that coupons, discounts, points
and prizes are just beanbags. We ought to spend more High Fidelity
time thinking about the stuff that really matters to
Creating loyalty is a multi-layered challenge.
people, and serve that up each and every day. A discussion featuring Richard McDonald of
That means products and services that really and Fender, Steve Rotterdam of DC Comics, Peter
truly solve problems and help people live happier lives. O’Reilly of the NFL, Joe Dobrow of Sprouts
Providing a helping hand when someone really needs Farmers Market and Spencer Hapoienu of
it, and smiling because we truly mean it. Insight Out of Chaos.
It’s not because the customer is always right (nobody’s
perfect). It’s because it’s up to us to make it right.
16
We may not get the same kind of loyalty we enjoy
with our family and friends, but we’ll have more fun,
and so will everyone else.
W h i T E PA P E R
Shopping for Value
Let’s give shoppers more value than they pay for.
Tim Manners
By Al Wittemen.
tim@hubmagazine.com

3. Editor-in-Chief
Tim Manners
Senior Editors
ALSO Peter F. Eder
Jane Harris
Managing Publisher
Joseph McMahon
4 COOL NEWS
Amoeba Music, Glazier’s Marketplace, Ford Lately, Jeffrey’s Meat Market,
Kroger Customers and Glass Asda.
Art Director
Julie Manners
Design Concept
Alexander Isley Inc.
6 R ESEARCH R EPORT
Crock of Loyalty | Is there any such thing as brand loyalty at the
supermarket? An executive summary of a Reveries.com survey.
Illustrator
John S. Dykes
Circulation Director
13
Bertha Rosenberg
W H I T E PA P E R
Think Big! | Embrace strategic planning as the great opportunity to build Brain Trust
loyalty that it is. By Jim Doucette. Active International
Arc Worldwide
Euro RSCG Discovery
20 R ESEARCH R EPORT Henry Rak Consulting Partners
Hoyt & Company
Precision, Prudence & Passion | A study of multichannel shoppers yields Insight Out of Chaos
valuable insights. By Masha Sajdeh and Nick Jones. Landor Associates
McGuinn.com
Marketing Drive
31 CASE STUDY
Real-Time Loyalty | Green Hills Market builds loyalty where the shopper,
product and store converge. By Richard Guha.
Mars Advertising
Triad Digital Media
TracyLocke
WomanWise
Hub Club
34 W H I T E PA P E R
Six Appeal | Marketing can help build strong shopper-strategies six ways.
By Chris Hoyt.
Prophet
RPM Connect
Friends
BVI Networks, Inc.
38 R ESEARCH R EPORT
Stand by Me | A year ago we were angry. Now we’d like some tender, loving
care. By Dori Molitor.
The Hub
David X. Manners Co.
107 Post Road East
Westport, CT 06880
42 W H I T E PA P E R
Citizenship Branding | Loyalty grows when brand values and strategy
align. By Scott Osman.
203-227-7060 ext. 227
hub@hubmagazine.com
n Brought to you by the editors of Reveries.
com and Cool News of the Day, The Hub
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magazine is dedicated to exploring insights,
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Leading with Loyalty | Brand rituals build loyalty and drive growth.
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4. COOL NE W S
Amoeba Music
“Big chains went under because they lost track of core
customers,” says Marc Weinstein of Amoeba Music.
Virgin Megastores, says Marc, “were almost like banks or
something . They didn’t showcase the product. It was always
just so sterile.”
Amoeba, which Marc co-founded in 1990, bills itself as the
world’s largest independent record store, with its flagship
located “in the heart of Hollywood on Sunset Boulevard.” It is
anything but sterile.
Offering “a massive collection of diverse new and used vinyl
LPs, CDs and DVDs,” Amoeba “also doubles as a popular live
performance venue, hosting the likes of Paul McCartney and
Elvis Costello.”
Marc says the real difference is that Amoeba has “so many
people who love music on both sides of the counter. We don’t
have a real corporate hierarchy. People really get the passion
when they come in the store. It’s an infectious feeling.”
He also attributes the store’s success to its multilayered
connection to the local culture.
“A lot of collectors come in and buy hundreds of records off
the wall, and lower-income families come in and buy VHS
tapes. All kinds of culture is being recycled,” he says.
Meanwhile, Marc is planning to launch a digital store early
next year. His idea is to “create the ultimate indie version of a
digital store with a lot of data and ways to look things up.”
[S o u r c e : Amy Kaufman, The Wrap, 8/20/09] Ford Lately
Ford Motor’s marketing chief, Jim Farley, thinks people are no
longer brand-loyal to cars because quality has become a commodity.
Glazier’s Marketplace “Brand loyalty has shrunk because of widespread improvements in
the products,” says Jim. “The ‘trust factor’ is more or less the same
for most cars.”
A single-store supermarket in Las Vegas is betting that a
distinct personality will win shopper loyalty. But Jim also thinks winning us back is more about the future than
the past. “I can’t tell you how many car clubs I have been to where
Perhaps most notably, Glazier’s Food Marketplace “will try to
they own old Mustangs and vintage T-Birds, but they drive Camrys,”
lure shoppers partly by moving front and center some of the
he says.
fresh food preparation normally done behind the scenes.”
At least for now: “So far this year, only about 20 percent of car shoppers
The store will also stock “a broader-than-average assortment
stayed with the same brand when they purchased a new vehicle,”
of items, such as mustards and seafood, a salad bar and a sit-
according to CNW Marketing Research. That’s quite different from the
down dining section with a player grand piano.”
1980s, when “nearly four in five Americans were repeat buyers.”
Glazier’s will also have classical music in the store, hoping
Some suggest that automakers invested too heavily in advertising that
it will “calm shoppers into taking their time and perhaps
promoted corporate brands rather than individual models (e.g., “Have
picking up a few more items.”
You Driven a Ford Lately?”). But Toyota found, for example, “that
The retailer has no plans “to join the pile of fliers stuffed into the rock-solid quality that made its Camry sedan the top-selling car in
mailboxes,” but does intend to “try some community-relations America did not lure many buyers to its full-size Tundra pickup.”
tactics, such as making a meeting room available to local groups.”
Jeremy Anwyl of Edmunds.com says the focus these days is on
“What we have attempted to do is take into account all “value,” and cites Hyundai as having done a particularly good
the things we found that we did or didn’t like about the job with that message. Hyundai and Kia, not coincidentally, have
supermarket,” says William Glazier, the store’s founder, who replaced Chrysler and Pontiac in the top ten of the best-selling cars
had previously built and sold four stores near Philadelphia. in America.
[S o u r c e : Tim O’Reiley, Las Vegas Business Press, 9/28/09] [S o u r c e : Bill Vlasic, The New York Times, 10/21/09]

5. Jeffrey’s Meat Market Kroger Customers
“I’m a piece of antiquity, kept alive,” says Jeffrey “We don’t need to draw in others So, Kroger pays attention to small
Ruhalter of Jeffrey’s Meat Market. Jeffrey was who don’t shop with us because details, “such as sending a Jif peanut
born into the butchering business, 54 years ago. the biggest opportunity is with our butter coupon to a mom who buys
His early memories include being wheeled on a loyal customers,” says Kroger chief only Jif,” for example.
handcart “through hook-hung sides of beef.” He executive officer, David Dillon.
Kroger has also grown loyalty by
has very definite ideas about what it really means building “larger stores with more
David says Kroger realized this
to be a butcher, too. products at cheaper prices ... cleaner
almost ten years ago, and has been
“A butcher is a member of your family,” says on a path ever since “to put the aisles and short lines ... $4 generic
Jeffrey, “who makes sure that what goes into customer first, and permanently.” prescriptions, organic food selections
your children’s stomachs is fresh, healthy and Most famously, Kroger engaged with ... and a 3-cent reward for using a
precisely what they need to survive.” London-based dunnhumby to build a reusable shopping bag.”
database of 45 million shoppers.
He also thinks being a butcher means being part It has further tightened bonds by
of the community. And so he lectures, offers food Kroger’s loyalty program has avoided “launching breast cancer awareness
tours, writes recipe books, teaches classes and turning its “customer into someone campaigns using local women, and
hosts art shows. He once fed steaks to 100 people always looking for the next deal” by giving away its Deluxe ice cream to
at local hotel, for free. He’s also now starring “in creating “anticipation and excitement loyal Twitter followers.”
his own pending reality show on TV.” over savings, letting its customers
Ultimately, David says creating
experience great value,” says Chris
The show will chronicle Jeffrey’s days behind the loyalty is all about “the importance
Allen of the University of Cincinnati.
counter and also follow him as he ventures out of honesty and accepting feedback,”
into the neighborhood. “There’s no such thing The database has also taught saying, “You can’t grow if you don’t
as ‘just being a butcher’ anymore,” says Jeffrey. David Dillon “that even Kroger’s recognize the need for that ... We were
“Community. That’s what I mean.” best customers are still buying not as good as we thought we were.”
many items that the retailer sells
[Source: Alan Feuer, The New York Times, 8/20/09] [S o u r c e : Laura Baverman, Cincinnati
somewhere else.”
Enquirer, 10/8/09]
Glass Asda
The U.K.’s second-largest food retailer plans to open its first
“transparent” supermarket in South West Wales. The store will
have glass walls instead of the usual brick, “to expose areas of the
supermarket normally kept out of view.”
It’s part of a larger effort by Asda Group Ltd. to build shopper
loyalty. Andy Bond, Asda’s president and chief executive, also
plans to “try to gain customers’ loyalty by giving them more say
in how the stores are run.”
Beginning in January, 18,000 regular Asda shoppers will be given
access to products before they are launched in its stores.” Andy
says he wants to “lift the lid on how we do things, and enable our
customers to help make decisions that have an impact on what we
sell and how we sell it.”
Asda plans to “reward customers who come up with the
‘brightest idea’ that saves the business money. If a suggestion is
implemented ... a customer could be in line to receive a check for
... five percent of the first year’s savings.”
As Andy explains: “It’s about entering a new partnership, working
with customers rather than simply working on behalf of them.”
[S o u r c e : Lilly Vitorovich, The Wall Street Journal, 10/2/09]
Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com

6. RE SE ARCH REP ORT
is there any such thing as brand loyalty
at the supermarket?
Earlier this year, the CMO Council and the
Pointer Media Network came out with a study
reporting alarming erosion of consumer loyalty
to brands bought at the supermarket.
Crock of
How many brands have your loyalty
“For the average brand, 52 percent of highly at the supermarket today?
loyal consumers in 2007 either reduced loyalty
or completely defected from the brand in 2008,”
the study said. More than 25 13.9%
Wow — and this was before the recession
kicked in. So, we thought it would be interesting Ten or more 41.1%
to ask our readers — predominantly senior-level
marketers — if they thought brand loyalty was BS Five or more 27.7%
where supermarket brands were concerned.
The survey seemed to generate more than its One or more 15.3%
share of comments and controversy. Some of the
controversy surrounded the questions themselves, None 2.0%
particularly one where we were trying to get at
degrees of loyalty in various product categories.
The critics had a good point. We simply
How many brands had your loyalty
listed 20 popular categories and asked respondents
at the supermarket a year ago?
to select those in which they usually purchased
more than one brand. Some respondents noted
that an unchecked box might mean they didn’t More than 25 19.3%
shop the category, not that they were loyal to a
particular brand in it. Ten or more 42.1%
That said, out of the 20 categories, only
nine — ketchup, colas, deodorant, toothpaste, Five or more 25.7%
frozen dinners, laundry detergent, toilet paper,
canned vegetables, and yogurt — registered as One or more 11.9%
die-hard, single brand, “loyalty” categories by
more than 50 percent of respondents.
None 1.0%
Based on respondent comments, it’s possible
that ketchup and colas made the cut because Heinz
and Coca-Cola dominate their respective categories.
It is also possible that frozen dinners, canned How has your loyalty to private-label brands
vegetables and yogurt scored well because these changed over the past year, if at all?
categories might be less popular than some others.
Other respondents also took issue with our Increased 24.9%
definition of loyalty as “a brand that you buy at the
supermarket every time, without fail, and to which Stayed the same 59.2%
you have an emotional or rational attachment.”
Some said they didn’t buy the same brand
Decreased 15.9%
every time because favored brands weren’t always
available. Others said they were on a loyalty hiatus
from some brands because of the recession. Still
others said they were loyal to more than one
brand in a category and liked some variety.
6 THE HUB NOVEMBER/DECEMBER 2009
THE HUB NOVEMBER/DECEMBER 2009

7. Loyalty
In which of the following categories do you usually
An open-ended question, in which we
asked respondents to name the brands to which
they were most loyal, was notable for intense
“loyalty” across a large number of brands. As
one respondent put it, “Loyalty, not monogamy.”
So, perhaps the prevailing definition of
“loyalty” is different in marketing than it is
in ordinary life, where loyalty usually means
purchase more than one brand? Pick as many as apply.
long-term emotional devotion beyond reason,
sometimes at odds with one’s own best interests.
Bread 68.3% Maybe marketers (and shoppers) have their
own definition of loyalty that’s a step or two
Breakfast Cereal 68.3% removed from its traditional meaning. Could
be that’s a result of so many years of marketers
Ice Cream 67.8% defining “loyalty” as discount programs whose real
objectives, ironically, can be to promote disloyalty.
Potato Chips 62.4% In fact, although a solid majority (67 percent)
of respondents said they use a loyalty or retailer
Beer 61.9% charge card at their favorite supermarket, a nearly
equal number (64 percent) said that their
Pasta 61.9% supermarket’s loyalty or charge-card program
did not make them more loyal.
Cookies 60.9% Meanwhile, our survey also found remarkable
stability in levels of loyalty with 41 percent saying
Bottled Water 59.4% they were loyal to “ten or more brands” today,
versus 42 percent a year ago.
Chicken 58.4% And despite conventional wisdom that private-
label brands have enjoyed a sales bonanza during
Paper Towel 53.5% the recession, 59 percent of our respondents said
their loyalty to private-label brands had “stayed
Fruit Juice 52.5% the same” over the past year. Respondents also
said they were more loyal to brands (54 percent)
Yogurt 47.0% than to the supermarkets where they buy them
(46 percent).
Toilet Paper 45.0% Finally, to the bottom-line question of whether
brand-loyalty is BS, a whopping 86 percent said,
Canned Vegetables 44.6% “no.” But don’t get the idea that just because we’re
“loyal” to your brand means we’re going to buy it.
Laundry 44.1% Respondent pRofile
A total of 203 survey respondents included
Frozen Dinners 42.6%
brand marketers (24%), consulting firms (19%),
and agencies (16%). Twenty percent worked
Toothpaste 33.2%
in packaged goods firms, 13% in media/
entertainment and seven percent in retail. A
Deodorant 31.7%
majority were senior-level executives with 72%
reporting more than ten years of experience in
Colas 29.7%
marketing.
Ketchup 26.7% Survey Results:
http://hubmagazine.com/survey/loyalty_bs
NOVEMBER/DECEMBER 2009 THE HUB 7
NOVEMBER/DECEMBER 2009 THE HUB

8. ROUNDTABL E
Creating loyalty
is a multi-layered challenge.
High Fidelity
how do you build selling and the care and feeding of advertising or customer service
the customer along the way. to build something that’s bigger
loyalty in the store? than your four walls. I think loyalty
Peter O’Reilly: We’ve tried to
programs help, and I’m a strong
Richard McDonald: We look take advantage of our retail
believer in them. They keep some
at retailers more as business opportunities by giving our
customers shopping because they’ve
partners than just outlets for our fans the type of selection and
built up some points, but that’s more
products. It’s really about long-term personalization opportunities at
affinity than true loyalty.
relationship building and it can’t retail that allows them to customize
be a one-size-fits-all approach. their apparel and products and then I try to use words and language to
A We equip the salesperson to connect that with the game. generate a deeper connection. If
R oundtAble communicate our message, or else
F eAtuRing they won’t talk about us.
Richard McDonald This includes product descriptions, Customer service needs to rock as
Fender Musical
Instruments
photography, packaging, web tools,
videos, staff training, cool and
hard as our guitars and amps.
innovative promotion ideas — and R IC H A R D MC D oNA L D
Steve Rotterdam the more turnkey it is, the better.
DC Comics Brands need to take responsibility
to empower retailers with the tools We’ve also expanded our product you can create a certain tone with
Peter O’Reilly
National Football they need. line to hit our female, youth and the language that you use, you’ll
League Steve Rotterdam: Retail is where urban fan base with product get customers who recognize it
our brand comes alive. This is lines that are fresh and unique. because it resonates with them.
Joe Dobrow It’s about making sure that the They will perceive that there are
where the over-the-counter debates
Sprouts Farmers intensity and meaningfulness of some real people behind that store
happen over what’s exciting and
Market the NFL and individual teams and they are their kind of people.
what’s really rocking people’s
connect with fans at retail. And then you’re in business.
Spencer Hapoienu interests. It is a place where you
Insight Out of Chaos can have conversations amongst There is such a social dynamic Spencer Hapoienu: Retailers have
peers who have similar interests. around our game, around bringing a big advantage over every other
With very, very rare exception, our people together both at home and industry because they have the
retailers are also fans themselves. at the stadium, that we need to opportunity to talk to the customer
When a comic or graphic novel sells make sure that our retail and our on a regular basis, one-to-one. They
well it’s because the retailers have licensing portfolio taps into those can build a behavioral transaction
expressed their confidence in what elements of our brand essence. database that can tell them what
we are doing to support the books. their customers respond to, what
Joe Dobrow: The question is
It’s really a business built on hand their customers like and don’t like.
whether you can use programs,
8 THE HUB NOVEMBER/DECEMBER 2009

9. It’s an enormous advantage that When our consumers
most retailers don’t tap into. But
I think that’s starting to change are having a conversation,
because those companies are we’ve done 80 percent of our job.
having so much success in a very
difficult marketplace. S T E v E Ro T T E R DA M
More and more companies are
taking advantage of retailers that O’Reilly: Across the history of information or offers to people, so
have data on what their customers the NFL, great technology has that they will have an affinity for
do, and are using that to be much made the fan experience better or our stores.
more relevant. more convenient. This September
Now, Sprouts is a little bit
we launched our new Red Zone
unusual because we have an over-
how can technology Channel, which allows fans to
representation of senior citizens
watch every touchdown of every
promote loyalty? among our shopper base. So, we’ve
game on Sunday afternoons.
got a lot of customers who don’t
McDonald: Fender is unique in Our NFL Mobile Live product with want an in-store kiosk or a mobile
the sense that we’re creating tools Sprint enables streaming of NFL app. For them, ironically, what’s
for musicians to make music. Network games and provides every generating some loyalty is that my
We’re known for our vintage tube stat and every play of every game. store is not techno-heavy.
amplifier technology that’s still the We also continue to look at in-
Hapoienu: As the ability to store,
choice of most professionals. It’s stadium enhancements — whether
analyze and interpret large volumes
a lot of the same technology that that’s ordering food or seeing replays
of data has accelerated, it has become
we developed in the ’50s and ’60s, —we make sure that our most loyal
easier to use technology to talk to
but at the same time the needs of fans that go to our games have an
customers on a one-to-one basis.
the contemporary artist may be incredible experience.
completely different. You can produce printed materials
We also have a very sizeable
that talk to customers one-to-one,
As a result, we’ve had to evolve database, compiled across all of
and you can reach the customer
technologically within the company our different touch points. We use
in the store with vehicles on a
from a product development that to connect to fans on a one-
targeted basis. You can use the
standpoint and offer digital products to-one basis and customize our
internet, email and Twitter.
to meet the needs of new players. communication by favorite team.
So, sustaining loyalty is about We’ve got so many fans whose There’s another opportunity to
evolving with technology to fill a favorite team is not their local build loyalty by putting new
latent need that musicians have to team. So, our database and other technology into products. For
create something new. forms of online communication example, Nike put a chip in its
help keep them connected. sneakers and then attached that to
Rotterdam: Technology has
an iPod. That’s a huge advantage
changed the dynamic. It is no Dobrow: I’m a lifelong believer in
when you integrate technology into
longer a situation where you can database marketing. In the past,
the product and then tie that back
expect your consumer to find you. you had a lot of little mom-and-pop
to everything else you’re doing.
Consumers expect you to meet stores and they knew who their
them where they are. customers were. And that was
Those brands and channels that really the relationship on which how can social media
ignore the tools miss out on commerce was built. influence loyalty?
opportunities for growth and to Today, we use technology to
McDonald: Fender is all over social
build loyalty. They are losing that identify and get to know our
media. We are directly linked to
core customer who will continually customers. The trick, of course, is
Facebook, Twitter, MySpace and
come back to your brand even when that you don’t want to cross the
YouTube. We also have a very
it’s not convenient or financially line of privacy. But we do want
active community section on
conducive for them to do so. to be able to serve up relevant
Fender.com. We’ll post a question
NOVEMBER/DECEMBER 2009 THE HUB 9

10. If we go deep into areas that are Once you know who your customers
are and how they divide themselves
authentic to our brand, we’ll have the up in various segments, you can
most success with building fan loyalty. create affinity groups through
social media that really provide
PE T E R o ’ R E I L Ly that segment with interesting
information or opportunities. Then
it becomes a platform to build
on our social media networks as The other thing — and this is not retention and sell more product,
if we were sitting with each other, something you traditionally see but in an indirect way.
and I might ask you: What’s your from a sport league — is that we’re
favorite guitar? really digging into the youth space how about loyalty
and focusing on our next generation
We’ll get thousands of people,
of fans. For example, we’ve created
among employees?
literally, in hours — and that creates
a virtual world, NFL Rush Zone, McDonald: Everything that we
loyalty. If you measure loyalty
which is a great home for NFL kids do as employees at Fender is for
through engagement and retention
to connect, to chat with their the customer because that’s the
of our customers — which is a great
friends across the country. only thing that matters. It’s not
way to grow your business — social
media is a great way to do that. Dobrow: With social media, you for your boss or the CEO; it’s for
can’t look like you’re marketing — the customer. That is emphasized
Rotterdam: We include Comic-Con
and you can’t look like you’re trying from the top to the bottom every
and other fan conventions in our
to look like you’re not marketing. day here; it is a mantra of the
definition of social media. Such
What you have to do is consider company. When you do that, then
events are not just opportunities to
what this technology has done: It’s your mission is pure and people
bring our talent and fans together,
brought us back to an old way of appreciate it.
but also serve as forums in which to
doing business where humanity The other thing that works for
break news that radiates out to fan
and transparency, sincerity and me is that I hire my customers. I
press and mainstream media.
honesty actually matter. hire people who dig this brand,
Our daily blogs are also key
But when you think about the understand it, love it and know
elements of our communications
language used in social media: you what the experience is like for
strategy. They, in turn, feed
follow somebody on Twitter, you the dealer, distributor or the
information into our Facebook and
link with someone on LinkedIn, or consumer. We bring those people
Twitter efforts.
you friend someone on Facebook in and it gets into our tribal gene
This ensures that our message — that’s not deeply felt stuff. pool. Customer service needs to
gets out to those who might not rock as hard as our guitars and
True followers of the Grateful Dead
partake of blogs or conventions, amps. That’s our culture.
followed them around from venue
but are still plugged into their
to venue. That was loyalty! That’s Rotterdam: One of the first
own social network communities.
not what we’re talking about here. questions I was asked when I met
When our consumers are having a
The challenge is to figure out how our sales team here had nothing
conversation, we’ve done 80 percent
to bring substance to it to get that to do with where I’d been or what
of our job.
longer-term affinity, or loyalty. my plans were. The question was:
O’Reilly: Delivering information in So, what are you reading? I rattled
Hapoienu: Twitter is going to
real time, whether that’s through off titles of comics I read regularly
be a huge opportunity for a lot
Twitter feeds to communicate the and I distinctly remember one
of businesses to drive people to
“inside” information our fans want guy saying to me, “Okay, that’s
their products based on a sense
on what’s happening at the league acceptable. Pedestrian, but
of urgency. If you can create an
and with our clubs, is critical. acceptable.”
affinity with a group of customers
We’re really staying on top of how
because you know what they buy, Turns out I wasn’t reading enough
our fans want to connect with the
you can create an environment independent stuff. But I am now.
game and the league.
that people are drawn to. With comic-based literature, you
10 THE HUB NOVEMBER/DECEMBER 2009

11. have to have that level of personal
The question is whether you can
engagement if you hope to have
any credibility with your fans, build something that’s bigger
creators and staff. than your four walls.
O’Reilly: Commissioner Goodell is JoE D oBRoW
building an innovation culture at
the NFL, and giving everybody a
voice. more relevant relationships with aligned with your business. For a
customers, whether that’s in the company like Fender, that’s going to
The whole organization is part
store, on the web or on the phone. be music education, especially with
of a team — from the folks on the
the arts under siege in the schools.
business side to those out on the If you’re a salesperson at retail
field — the NFL is one unit with and your company has given you Little Kids Rock is one of our
one mission. It’s an organization tools so that you know who your philanthropic programs. We have
with incredible loyalty among its top customers are, to recognize the Fender Foundation that gives
employees, and that culture of and acknowledge them, that’s a grants to everything you can
innovation that the Commissioner great way to build loyalty.Anything imagine that results in people
established is one of the core that makes the employee feel giving the gift of music.
reasons that it remains so strong. more satisfied and gratified about
How do I keep a 60-year-old brand
their role makes them much more
Dobrow: Shopper expectations about relevant to a group of young,
interested in staying with that
employees are now so low that even emerging guitarists who, in
company.
a little bit of a customer service spark defining themselves, are going to
can make a huge difference. Of It also creates more energy for the dismantle everything their parents
course, it cuts the other way, too; a store owners because they’ve got thought was cool? The only way I
little bit of a customer service more control over the business, can do that is through loyalty. And
problem can be devastating. and have more confidence to do the only way I can get loyalty is
more merchandising, to expand, through honest, sincere, authentic
I like to spend time training the
and to remodel. It’s about giving engagement with my customers,
cashiers before a store opens
the employees tools to make them the people who use our products
because that’s my marketing
better at what they do as it relates and depend on them for a living.
department! I want those cashiers
to the customer.
to know what kinds of questions Rotterdam: Our characters have a
customers might ask about our long history of being utilized for
marketing programs, and to interact how does social good causes. Dating back to World
with those customers so they can responsibility create War II, Superman, Batman and
give — and get — feedback.
loyalty? Wonder Woman enlisted kids to
get their parents to support various
Employees are just a unique kind
McDonald: When we talk about bond efforts. We’ve also put them
of consumer who happen to see
social responsibility, we’re talking and the rest of the Justice League
the company from inside and out.
about the responsibility of being to work on behalf of many social,
They are blogging and Tweeting
honest in our communications, civic, health and fitness related
when they’re not at work so their
the brand promise we make and organizations.
perspective can be a source for
building tremendous consumer how we keep the brand promise. As a company, we’re supportive
loyalty. That kind of responsibility returns of an initiative called the Comic
in loyalty. So, if you treat your Book Legal Defense Fund, which
Hapoienu: Developing strong
customers like you treat your addresses various issues related
relationships with customers
friends and you treat your family to censorship in our industry.
energizes employees and makes
(hopefully you do that well), And, where we can, we will also
them more comfortable with
you’re making it. support cause-related efforts of
the products they are selling.
Now, if you have a cause that’s local retailers, especially those
It galvanizes them to be more
pure, it should be something that’s concerning literacy.
creative and find ways to create
NOVEMBER/DECEMBER 2009 THE HUB 11

12. T HOUGHT L E ADER S
At the end of the day, our costumed after selection and quality; value;
heroes are champions of good. and the shopping experience. But
These are characters whom parents a table can stand on three legs,
and grandparents can feel good and while social responsibility
- talking to their kids about, and provides stability, it’s not yet
that builds loyalty as well. critical for building loyalty.
RICHARD MCDONALD is For example, up until recently,
svp of global marketing for O’Reilly: About two and a half
99% of the bags we gave out at
Fender Musical Instruments years ago, we looked at everything
Sprouts were plastic. Now we
Corporation, responsible for that we’re doing in the corporate
marketing, advertising, product offer paper bags that cost four
social responsibility space. We
development, artist relations, times as much, but it was the right
were doing a lot of things well,
product education, promotions thing to do. No one came up to us
but that audit led us to going deep
and events. afterward and said, “Thank God
in areas where we knew we could
you made the switch. Now I’m
have the most impact, and that
STEVE ROTTERDAM is svp of sales not going to shop anywhere else!”
and marketing for DC Comics,
were very authentic to who we are
But over the long haul, it will help
running both the direct and as a major sports brand.
build loyalty.
book trade sales departments,
That has led us to a major
supervising marketing and Hapoienu: Too often the ideas
publicity while also overseeing
commitment to youth-health and
smack of transparent marketing
advertising-sales and custom fitness under our NFL Play 60
publishing.
PETER O’REILLY is vp, fan Developing strong relationships with
strategy and marketing for the
National Football League, and customers energizes employees.
also leads the NFL’s corporate
SPE NC E R H A P oI E N u
social responsibility initiatives.
He previously was a director
of marketing for the National
Basketball Association.
campaign. The goal is to encourage on the coattails of a charity.
kids to get at least 60 minutes of Developing ideas that are either
JOE DOBROW is vp, chief marketer
physical activity every day. borne from the DNA of the
and “tofu” peddler at Sprouts
Farmers Market, a 40-store,
retail brand or the culture of the
We’ve gotten tremendous traction
Phoenix-based chain of natural customers are the most effective.
— nationally, across 32 clubs and
foods stores. He previously
with employees, as well — because Saks is running a program to sell
led marketing at Whole Foods,
Balducci’s and Flexcar.
it is so authentic to who we are as coats by providing 25 percent off a
a brand. new coat if the customer brings in
an old coat that Saks can donate to
It is something that our athletes
SPENCER HAPOIENU is president the appropriate local charity.
live every day, and it has given us
and co-founder of Insight Out
a major impact with kids, families While that promotes coat sales
of Chaos, a database and direct
and schools. So, whenever we at Saks, it is possible that many
marketing company. He can be
reached at spencer@iooc.com or think about social responsibility, customers might not think of
(212) 935-0044. it needs to be so core to our donating an old coat and now
overall mission and part of our would. Or, they might not have
business. If we go deep into areas thought about buying a new coat
that are authentic to our brand, and now would.
we’ll have the most success with
Either way, charities will get the
building fan loyalty.
benefit of coat donations and
Dobrow: Social responsibility is Saks and its customers have
the fourth leg of a table on which done something for the local
consumers make buying decisions, community. n
12 THE HUB NOVEMBER/DECEMBER 2009

13. WHI T E PAPER
Embrace strategic planning as the
great opportunity to build loyalty that it is.
Think Big! By Jim Doucette they yield actionable plans, according to the McKinsey
Quarterly. At the heart of this dissatisfaction:
H e n r y r a k c o n S u l t i n g Pa r t n e r S
B
n The approach to investment prioritization is
uilding strong consumer loyalty to not systematic.
your brand represents the Holy Grail n Growth targets are not driven by consumer or
for marketers. Strong consumer loyalty category realities.
gives the marketer the ability to do n Growth strategies are overly reliant on white space,
all sorts of things that we marketers — and our acquisition, etc., versus “controllables.”
firm’s shareholders — love! Strong loyalty enables n Growth options are not systematically quantified,
making comparisons across franchises and operating
a brand to grow through line extensions and
groups difficult, if not impossible, to make.
new innovation, to price against weaker
n The financial plan is often disconnected from the
competitors, and employ other strategies that strategic plan, leaving the most carefully crafted
deliver ever-higher levels of volume and profit. strategies starved for implementation resources.
When should we start down the path to this land It is easy to see the path that leads to such
of brand nirvana? Well, in a word … now! Now is dissatisfying strategic plans. A good strategic
the time of year when many marketers are creating planning process should be a dynamic, creative
their strategic business plans, which is the essential discussion about discovering the possibilities to grow
starting point for creating a stronger consumer consumer loyalty and take your brand to new heights.
proposition and, ultimately, more loyal consumers. However, when you are embroiled in a business,
The bold executives among us will plot a course it is hard to get “out-of-the-business” and challenge
for dramatically accelerated growth. That is certainly conventional thinking. Further, the breadth and
the intent of the “strat plan.” Too often, however, depth of consumer insight needed to drive the strat
strategic planning becomes a derivative exercise. The plan is often not present. How can you make sure
last strategic plan is dusted off and developing the not to fall into this trap? There are two fundamental
new plan essentially becomes a process of making steps for creating a successful strategic plan and,
incremental changes to the prior one. consequently, strengthening consumer loyalty to your
The results of strategic planning processes are brand: 1) Understand consumer behavior and the
certainly not adequate. Fewer than 50 percent of senior drivers of behavior in a precise, detailed way and use
executives are satisfied with their current strategic the behavioral foundation to organize everything else
planning processes and fewer than 25 percent think you know about the consumer (i.e., needs, attitudes,
NOVEMBER/DECEMBER 2009 THE HUB 13

14. etc.) and 2) Build a plan upon this behaviorally-based between the core business, new innovation and
foundation. acquisitions/divestitures across the portfolio.
A comprehensive understanding of consumer
behavior starts with an in-depth analysis of A GRowth Action plAn
consumer usage and purchase patterns. There are Before we get to balancing activities across the
two very powerful analyses that allow marketers to portfolio, it’s time to create growth action-plans at the
understand, validate, and leverage these behaviors brand level in six areas:
empirically: A usage domain that analyzes the largest Marketing Strategy. Two critical questions need to
viable set of competitive/substitutable products; and a be answered: What is the right strategic positioning
purchase structure that defines the drivers of purchase for my brand and how should the positioning be
behavior in close-in, specific, product categories. communicated to my brand’s target consumers?
Each one provides distinct and vital insight into If the consumer behavior analysis determined
how consumers behave. The combination of usage that your brand’s actual competitive frame is broader
and purchase behavior gives you the foundation to than previously imagined, your new strategic brand
develop much clearer strategic decisions to make your positioning should reflect this broader competitive
brand the one that best meets consumers’ needs. set. The strategic brand positioning should be very
When integrated with targeting, need state, specific with regard to competitive frame, target,
product performance, brand benefit and brand-equity benefits, reasons-to-believe and brand personality.
information, you have the insights to create a framework A well-defined positioning easily lends itself to
for accelerating the growth of your business. The a copy strategy that is the linchpin to making sure
framework should define a future in which your brand is your brand’s messaging is synchronized across all
more differentiated versus your competitors and creates marketing, public relations and selling touchpoints.
stronger loyalty with a wider consumer base. Even marketing and sales programs that sometimes
Where should your brand compete to establish have more of a short-term, tactical objective (such as
a competitive advantage? Your brand’s strategic many consumer promotions and in-store promotions)
positioning should answer that key question. For should be linked to the strategic positioning to
example, does the brand compete in soup or simple reinforce the brand’s new message.
meals; OTC medicines or pain management; isotonics Getting the positioning right, and consistently
or refreshment beverages? reinforcing the positioning through the entire brand’s
Furthermore, do you have a strategic brand messaging, is a key to strengthening loyalty. And,
positioning that is clearly articulated and precisely once you have the right positioning, stay with it! A good
defined? Is it understood and embraced by the entire positioning should last for years: Tide’s In — Dirt’s
business unit and your business partners? Does the Out; and It’s Not Delivery, It’s DiGiorno — are examples
positioning enable your brand to stand apart from of positionings that grew those brands for many years.
your competition in a highly relevant way? Spending Strategy. A precise positioning also
Answering those critical questions with a yields efficient growth for established brands because
consumer behavior-based approach is the key starting you can calculate the profit-maximizing point of
point for strategic planning. In addition to providing marketing spending — across advertising, consumer
clear direction for each brand, defining the strategic promotion and trade (or customer) promotion —
brand positioning ultimately allows you to define the against your brand’s new competitive frame.
roles for each brand in your portfolio. In cases where the competitive frame for your brand
Against the newly defined competitive frame, is much larger than previously imagined, the brand
you will be able to evaluate each brand’s ability to likely should be spending more on marketing to reach
grow revenue and deliver on margin requirements by the broader audience with your new, more relevant
assessing the brand’s competitive effectiveness and message and build consumer loyalty to your brand.
the attractiveness of its core categories. The Goldfish brand has increased its marketing
You are then able to calculate the expected future spending behind its tasty, fun and wholesome treat
value of each brand. The results are role definitions for positioning, which allows the brand to source volume
each brand in your portfolio in a way that is rigorous, far beyond the kids’ crackers category. With the ‘mom
quantitative and rooted in consumer’s actual behavior. appeal’ of being a baked (not fried) snack and its fun-
Once consumer behavior is well-understood, for-kids message of the “snack that smiles back,” the
the second key is to balance strategies and activities brand has enjoyed rapid growth in recent years.
14 THE HUB NOVEMBER/DECEMBER 2009

15. innovation Strategy. In addition to growing the base Several years ago, the Tylenol brand was
business, growth through innovation is part of the able to grow profits while maintaining volume by
lifeblood of any successful brand. The key question to understanding the brand’s true competitive frame and
answer is: How and why will the new product replace pricing within that competitive context.
consumers’ existing behavior with a new behavior? Selling Strategy. Even well executed, great
While creativity is important in any innovation marketing strategies cannot be fully realized unless
process, it should be directed after a thorough the consumer concept is taken all the way to the
understanding of the existing consumer behavior point-of-sale.
that must be changed, the benefits consumers seek At this point, you need to translate the brand’s
through this behavior, the attributes that support consumer strategies to category leadership platforms
the behavior, and the parts of their current behavior with shelving, assortment and promotion strategies
consumers are willing to change and not change. All that reflect consumer behavior and are tightly linked
of these facets should be understood by the consumer to marketing strategies.
behavior foundation you built at the beginning of the For example, by bundling the right items together,
strategic planning process. a promotion can address a larger set of consumer
Once the V8 brand clearly understood its unique needs, different users or different usage occasion,
vegetable nutrition benefit within the world of juice, so it will tend to be more incremental. For example,
it allowed the brand to expand into vegetable/fruit a pain relief promotion might include headache,
blends, such as V8 V-Fusion, as well as soup, with V8 body pain and muscle pain remedies, or powdered
Soup. Each new product contributed to the overall V8 soft drinks could be packaged in stick or multi-serve
trademark’s position of “another delicious way to get canister forms.
your vegetables.” In an era where many consumer purchase
Comparing the innovation opportunities you have decisions are made at the shelf, getting selling
defined with your company’s in-house development strategies right is often the critical link in driving
capabilities also can form the basis of an acquisition loyalty to your brand.
strategy. On the other hand, if segments of the business Portfolio Strategy. After brand-level strategic
no longer fit well with the brand’s competitive frame, plans are developed, it is time to integrate the brand
you may want to consider divesting those segments. plans into a portfolio plan. This is where the brand
Each strategy — smart innovation rooted in actual roles, which you determined earlier in the strategic
consumer behavior, strategic acquisitions, divestiture planning process, come into play.
of non-strategic assets — sharpens your brand’s Meshing brand roles with the brand-level core
relevance to the consumer and strengthens loyalty. business (marketing/selling/financial), innovation
Financial Strategy. The essential questions to and acquisition/divestiture plans should lead to the
answer at this stage are: What activities truly drive right blend of activities that are sequenced to deliver
profitable volume growth and what is the optimal accelerated top-line growth while delivering bottom-
pricing for my brand? line commitments.
A thorough brand “due-to” analysis will Strategic planning season is the time to step
identify the activities that truly drive growth for the back from the day-to-day activities of managing the
brand. This is an especially important step. In our business and assess your business in a holistic, yet in-
experience, activities that are within your control depth manner. This is the time to be bold and create a
often play a large role in determining the success of plan that strengthens consumer loyalty to your brand
your brand. and puts your business on a new, higher-growth
A clear and precise understanding of your brand’s trajectory. n
competitive frame identifies the competitors consumers
are likely to switch to and forms the basis for a brand
pricing strategy. For a more accurate measure of price
elasticity, consider brand (not item) elasticity within JIM DOUCETTE is a managing director
the context identified by the competitive frame. with Henry Rak Consulting Partners,
a growth strategy consulting firm.
Once the pricing architecture has been determined,
Jim can be reached at jdoucette@
the final step is to identify the “right” spend back that hrcpinsights.com or (203) 698-7712.
maximizes revenue and earnings while protecting
volume and equity, which in turn drives loyalty.
NOVEMBER/DECEMBER 2009 THE HUB 15

16. WHI T E PAPER
Shopping
for Value
By al Wittemen
tr a c y l o c k e
W
hen i think of loyalty, i don’t think of brands. i think of people. i think
bout what it is that a person does that makes him or her so special that it
a
makes me loyal. it’s the intellectual, spiritual and emotional connections
that make the difference. For me, loyalty is having lunch with my friend Tim
at the Little Kitchen in the Compo Shopping Center on Route 1 in Westport, Connecticut.
Mitch Albom had his So, we’re having lunch,
lunch with Morrie, which
had an impact on his life,
Let’s give shoppers more and as usual, I always get
around to asking Tim about
and my lunches with Tim
do the same for me. Our
value than they pay for. the next issue of the Hub.
It’s not like I shouldn’t
lunches are always about remember. But this time
making people think, smile, and realize that sometimes the issue is going to be about brand loyalty. And my
there’s a different way of thinking that can lead to a first thought was, “Hey, piece of cake.” Hell, that’s
These lunches are always about the truth. They
more creative solution. who I am and what I’ve done my entire life.
In fact, my career was built on making people
retailers and their collaborative relationship. In
always begin with what’s new with shoppers and loyal to brands. So, whether it’s Heinz ketchup,
Finlandia cheese or Swift beef, it’s all about creating
years past, when we talked about brand loyalty, our brand loyalty, and I know how to do that.
assumption was that whatever you wanted to do at But the truth is that there really is no such thing
retail could be done. as true brand loyalty anymore. Almost nobody buys
That’s not true today. We now also have to the same brand all the time. Even fewer people will
consider what can be done with the retailer, and that bother to find a different store if their favorite brand
affects what we can do to build brand loyalty. isn’t available. That’s the real acid test of brand loyalty
The second issue concerns the difference between and it’s a test few brands, if any, can pass every time.
what retailers and brands say, and what they do. Loyalty is bull when you apply it versus those
This dichotomy intrigues me. The reality is that some definitions, especially in consumer packaged-goods,
marketers develop plans based on who they are, how ever since the Great Recession. Never before have
they live and what they do, versus whom they are we seen life in general — not to mention ingrained
marketing to and what they can do for them. purchase behaviors — so disrupted.
Last but not least, when Tim and I have lunch, we’re And yet, everyone has an answer to the question,
always looking for who’s doing it best and the results “Which brand are you most loyal to?” Often, it’s a food
achieved, because it’s always about keeping it real. item. Some people are addicted to the taste of Tabasco
16 THE HUB NOVEMBER/DECEMBER 2009

17. sauce, Heinz ketchup clutching their coupons,
or Diet Pepsi. Others and checking their
are hooked on personal circulars. Nobody looked
items, like Dove soap particularly happy.
or Head and Shoulders It’s not just at the
shampoo. supermarket. You could
So, this isn’t just pick almost any brand
another Hub issue about in America and it is at
loyalty, or another time risk. General Motors used
in space where we’re to be a brand everyone
going to talk about brand aspired to. The Gap used
loyalty. This is really a to sell what everyone
watershed moment where was wearing. We all
never has the concept of remember the Marlboro
brand loyalty been so important to achieve, and yet so Man. And who didn’t want an account at Merrill Lynch?
difficult to accomplish. Most people don’t even mention these brands in
There is no “normal” where loyalty is concerned polite company today, much less trust them enough to
dramatically changed shopping behavior.
today. There’s only a new book, yet to be written, on be loyal to them. This collapse in consumer trust has
I decided that the only way to attack brand
brand loyalty.
Whom do we trust anymore? We used to
loyalty in a fresh way, is to go back to the three things implicitly trust brands, but now it’s almost as though
Tim and I talked about at lunch: The truth about brands are guilty until proven innocent. A few have
shoppers and retailers; the reality that brands have held onto their equities — Walmart, McDonald’s, Nike
more price pain; and the fact that, despite all of this, and Apple, come to mind. But most others are slipping.
people still believe they are loyal to certain brands To restore trust, marketers have to think about
the cost-to-benefit ratio. The challenge is that it used
even though those loyalties may have shifted. re-framing value differently. They have to think about
A MAtteR of tRus t to be easy to identify the number-one attribute of
The truth about consumers and customers can be a brand, develop a positioning based on that, and
summed up by this quote from Kelton research: “This communicate it.
recession has accomplished what markets spend But today, it’s harder than just identifying
lifetimes trying to do: disrupt ingrained purchase an attribute; we have to create value and do so
behaviors and encourage change.” on a consumer’s and shopper’s terms. That’s not
We marketers used to make a living on creating necessarily what we think the attribute is, but it’s not
demand through increasing impulse purchases, for that complicated, either: It all comes down to value.
example. That’s not as easy anymore. One recent Shoppers will shop less unless we’re providing them
survey found that 74 percent of shoppers have with value. However, often that’s a category decision,
changed their shopping behavior and are making not a brand decision.
fewer impulse purchases, using more coupons and
buying more private label. RetAileRs ARe RespondinG
I saw this with my own eyes while doing in- The truth is that retailers, more than brands, are
store intercepts last Saturday. Most shoppers had responding to these shopper changes. Just look at
their heads down, reading their shopping lists, their ads. My most favorite thing on Sunday morning,
NOVEMBER/DECEMBER 2009 THE HUB 17

18. after going to church, is this classically, based on
pulling out the newspaper insights and research. It all
ads and analyzing what The Book of Loyalty looks perfect, except for one
retailers are doing. There’s thing. You don’t make your
Let’s write a new book on brand loyalty,
a difference today. based on three things: numbers.
Traditionally, retailers What to do? Try this:
lowered prices to clear 1. Prove our value every single day. If we want Go shopping for a week’s
inventory. You could almost brand loyalty, we need to give loyalty, and groceries for a family of four,
we need to give loyalty in terms of what
predict the ad, year after on a budget of $100. Dinner
the shopper wants in terms of value.
year. Today, they’re cutting for seven nights. This is no
prices because consumers 2. Meet the basic needs of your shopper. In joke: Most of America makes
are demanding it. They’re the past, we tried to create wants through just $45,000 a year. When
just not buying unless they impulse purchasing and demand creation. you look at what they’re
Today, people want what they need,
see the value and many spending on other things,
a week’s worth of groceries.
nothing more and nothing less.
retailers are providing it. that’s what they have left for
You know, I always 3. Communicate how our solutions solve
thought Kroger had too their problems within budget with better By Tuesday, you’re going
I think Kroger doesn’t have
much private label, but now packaging, displays and most of all, a to have a headache and
better, higher-value product.
you’re going to need pain
enough, even though they’ve relief, so that has to come
increased their private-label out of the $100. Would you
line by 15 percent. Kroger’s buy your own brand? Not
private label is selling and why wouldn’t it? A “Big K” a chance. You’re going to buy the value brand, the
Kroger-brand soda sells for about half the price of a private label.
name brand. The conventional way of building brand loyalty
There’s a big difference between 10 percent and isn’t working. If we want to get real about building
50 percent when it comes to prices. It is the difference our brands, we’ve got to get real about what shoppers
between thinking you have brand loyalty and living think not only about our brands, but the brands
in the real world. Some marketers, such as Procter & they’re buying. That private-label brand, to them, is
Gamble understand this. more important than ours; they’re more loyal to it
P&G had forever dismissed the idea of cutting because they see the value in it.
prices for its brands, whether it’s Tide or anything
else. But in September they announced price cuts cleARinG puRchAse huRdles
across 10 percent of their global line. They’re going I did a few store checks to help me think through
to increase promotions and emphasize value benefits, how loyalty has changed, and saw several purchase
and are introducing a value offering through a new barriers. The first one is quality and performance.
line called Tide Basics. Shoppers think the private-label brand is just as good
Unless your brand is making a difference in terms as ours. That’s what they think. When it comes to
of how that shopper and retailer defines value, it won’t cost, they cannot afford a branded product even if it
be around very long. It probably doesn’t even deserve did have a slight advantage. They have $100 to buy
to be on the shelf. seven meals for the week.
To bring this reality to life, suppose your brand is From a sentiment standpoint, they are seeing two
in the pain relief category. How can you build loyalty products on the shelf that, based on the appearance of
in a category where the fastest growing brand is the product and package, seem similar. But one brand
retailer’s private label? The retailer’s own pharmacist is charging $4-$5 more than the next. From a business
recommends the store brand as just as good and standpoint, shoppers do not like a brand that charges
lower priced. Whom do you trust more than your so much more for no apparent reason.
pharmacist? From an ethics standpoint, this kind of price gap
So, you come up with a new positioning, complete makes them angry. They see it as borderline illegal or
with advertising and digital campaigns. You go about immoral for a brand to charge a higher price with no
18 THE HUB NOVEMBER/DECEMBER 2009