New Ways to Sell the Brand Knowledge
are an enormously important segment because they are disproportionately powerful in terms of being trend setters and early adopters, said Keith Niedermeier, Wharton visiting professor of marketing and panel moderator. they are an attractive market because of the lifetime value they offer. Capturing teens and establishing brand loyalty can launch decades of positive yields in the future. It is an incredibly lucrative market, but definitely not for the faint of heart. Nowhere in marketing does marketing research have a shorter shelf life than when talking about the teen segment.
But w Louboutin hile the teen market is indeed fickle, it is also increasingly sophisticated and challenging, noted the panelists, who included Michael Marquis, group product director, Clean Clear Skin Care Business, Johnson Johnson; Stacey Paddock, senior product manager, Frito Lay; Lisa Reiner, vice president, retail management, at The Beanstalk Group, responsible for development and management of the mary kateandashley brand; and Melissa Lavigne of The Intelligence Group, a leading research, consulting and trend analysis company that specializes in Generation X (those born after the Baby Boom in the 1960s and 1970s), Generation Y (those born from the late 1970s to the early 1990s) and Tweens (a relatively new term used to describe anyone who is a pre teen from 10 on up).
According to J Marquis, from ages 12 to 19, teens a desire to be spoken to like adults. And from their [own] perspective, they are under more pressure than adults. They are worried about getting good grades, making the sports team, getting into college whatever it might be. They look at themselves as adults, as being mature. If you are putting yourself into their mindset, you have to tap into that desire to be spoken to as a sophisticated user.
When marketing to teens, Frito Lay Paddock suggested that companies have to understand key business drivers, and second, match communication efforts with the target audience. Said Louboutin Paddock: had to think about what important to teenagers? Fashion, email, instant messaging, video games, movies. In looking at all of those platforms, we decided to focus on music. Music is the best fit for Doritos, and in 2005, we offered five million free downloads through Doritos bags. Our ROI was enormous, and it was an incredible success.
Once established, it important to stay true to the marketing message around teens, said the Beanstalk Group Reiner. For example, with the mary kateandashley brand and lifestyle products, have kept the brand promise: To be aspirational, accessible and age appropriate. We stuck to this marketing strategy around the globe, and the global population of tween girls has proved that the (brand promise) transcended barriers, although we were warned that it would not.
When it comes to macro trends, The Intelligence Group Lavigne sees many that have important implications for marketing to teenagers. First, teens have multiple personalities and enjoy expressing different aspects of who they are: gifted athlete, scholar, member of a band. the 1980s, teens were fragmented, very specific. Now, with the Gen Ys, it cool to have different aspects of your personality as something that identifies who you are.
Second, today teens are defined by groups. X was all about me; Gen Y is about groups or being a part of a group of friends, said Lavigne. This teen dimension has been fueled in part by the increasing levels of communication available to teens, from instant messaging to cell phones to text messaging. are a lot of ways to be in touch. And teens today are all about the new social currency, she said. can be replicated or knocked off, and there are so many of them today that it is difficult for kids to identify themselves through what they own. When marketing, it important to integrate experiences like trips they take to South America with their families. Their experiences can be off. They real.
The panel participants acknowledged the significant subsets in the teen market. For example, female teenagers, global teens, and even 19 year old boys were identified by Paddock as specific target groups for Doritos during one campaign. Paddock gave one example to show how targeting teens can be tricky. When an advertisement that featured male teens looking up girls skirts proved offensive, it was pulled the first day. really thought this was the way to talk to 19 year old boys, but the problem was that we focused on 4% of the population and basically offended the other 96%, she said. Recent advertising efforts that offer music downloads for teens have proven much more effective.
But when it comes to marketing to teens, it difficult to identify the so called edge. The biggest marketing challenge, said Lavigne, understanding that for every 100 things teens experiment with, one or two things will trickle down. The early adopter is sometimes called a trend setter, but they don really care about the trend. They are so immersed in video or technology that they just know what the cool things to look for actually are. And then you have the influence Louboutin rs; they are looking to the early adopters, but they are not going to figure it out on their own. They are leading edge, but they don look too far head. In marketing, these are the ones you want to get a hold of, because they will spread the word about products and trends.
When Hershey Lenny talks about to win, the playing field he competes on is the $65 billion snack world, where every year nearly 38% of all sales falls into the category of confection or candy. Lenny credits the steady connectivity that Hershey has with its customers for making it the number one sales leader within the candy category, with 29% of the total candy business. are an iconic brand, he noted, displaying pictures of Hershey Chocolate Bars, Hershey Kisses and Reese Peanut Butter Cups, to name a few. have 14 $100 million brands.
When Lenny arrived at Hershey in 2001, he quickly realized that the chocolate giant was just okay a lukewarm endorsement based on his assessment that the numbers didn add up right. had sales growth and compound growth rate of 4%, net income of 2% and earnings per share of 5% There are a couple of things happening here. One, when sales are growing faster than net income, the company is not getting leverage through the business system. And when EPS is growing faster than net income, this isn a sustainable business model going forward. So for us, our strategic priorities were clear.
First, Lenny worked to reset the company cost basis in order to capture the money needed to reinvest in the business and invest in brand building. Overhead was reduced, underutilized factories were closed and non profitable businesses were sold. But the key growth opportunity was accelerate innovation. We have some of the best brands in confectionaries, some of the best brands in the cold snack market. Yet our product track record was hit or miss. We weren investing from a customer standpoint in terms of being innovative with our retail trade.
The good news, as Lenny saw it, was that Hershey was from a position of strength. We are a market leader. We are an iconic brand. We had to look first at winning more consumers.
Consider the company new marketing approach with Reese peanut butter cups and Heshey Kisses. Objective? Leverage the brands. While others looked at Reese and saw only a chocolate covered peanut butter cup, Lenny saw billion dollar platform, a significant opportunity to broaden the appeal and satisfy multiple needs with the Reese franchise. Here you had one of the largest brands in the confectionary category, clearly the largest brand at Hershey, and yet we weren capitalizing on the opportunity to expand the equity.
Enter White Chocolate Reese Reese Pieces, Reese Bites and, coming soon, Reese with Fudge and Reese with Caramel. Peanut Butter Cup makes a lot of sense in the United States, but fill it with marshmallow or hazel nuts in the Far East or Western Europe, and now you start thinking about creating a global platform for Reese as opposed to expanding it in the United States.
Next, consider Kisses, the Hershey chocolate kiss created by company founder Milton Hershey over 100 years ago that has grown into a $400 million brand. here is an interesting statistic, which is either a problem or an opportunity, and we saw it as an opportunity, said Lenny, who pointed out that 60% of the Kisses business is seasonal, centered around special holidays. Why not make Kisses the candy of choice year round? Towards that goal, the company has now come out with dark chocolate and mint flavored Kisses as well as peanut butter and caramel filled Kisses. And most recently, there are Kissables, single serve snack packs of candy coated Hershey Kisses readily available for pick up in local convenience stores. orders are exceeding our expectations, said Lenny.
Lenny also offered a few lessons under the rubric of the Odds might be applicable in what you do from a career business standpoint. First, learn from the past; don live in it. was the first CEO from outside the company in its 108 year history. It was a shock for both of us. Second, understand the true sources of your company competitive advantage. Within Hershey, Lenny cited brand franchise, confectionary expertise and superior selling capability. you forced me to pick one of the three, I say superior brand franchising. We knew our big brands had room to grow and we capitalized on them.
Third, rely on insight driven consumer marketing and insight driven customer marketing. Fourth, a Louboutin foot in the familiar. It makes a lot of sense for Hershey to go into the cookie business in a certain segment. It does not make a lot of sense for Hershey to go so far that we can leverage our source of competitive advantage. There an old expression, can go a long way staying close to home. I think that applies to brands.
Fifth, when it comes to leadership and people, the middle one third. There one third who are with you, one third who are against you, and one third who are in the middle. The goal is to marginalize the middle third. Hopefully you can move them up to the one third that likes you, to where they are understanding and supportive of your agenda, or they go down. And sixth, that neither brands nor leaders are industry neutral. Brands either create energy with consumers or they sap energy; leaders do likewise.