In 2011 we saw 25% of all global chocolate launches for chocolate products with a "seasonal" positioning, such as Christmas, Easter, or Halloween. And it seems that this year has seen a real hive of activity around new Easter chocolate products - research shows that there has been a spectacular 45% rise in the number of Easter products launched globally during 2012 compared to Easter 2011. Here's some egg-cellent examples...
Impulsive holiday chocolate buying
Thorntons range of 1p Easter eggs are being promoted via outdoor advertising, using the instant mobile checkout Simply Tap to allow users to buy the eggs.
Users can download Simply Tap from the Apple App Store or Android Market, which then allows them to take a photo of the desired product or scan the related QR code through the Simply Tap app and instantly purchase it with a single tap on their mobile phone.
Easter Celebrations
The much-loved Celebrations chocolates are now available in a luxury hollow egg filled with a large bag of luxury Celebration chocolates! Available in stores from today...
Easter Doughnuts
The American chain of Krispy Kreme doughnuts is throwing its hat, or rather its egg-shaped doughnuts, into the ring this Easter, with two glazed ovoid treats. Filled with frosting and topped with glaze, they're sugar bombs that even fans of Krispy Kreme's regular glazed doughnut might find a bit over the top. The two new doughnuts were created with inspiration from the Universal Pictures’ Easter-themed family movie HOP.
Hatching plans
With Easter just days away and covert chocolate buying about to go into overdrive, in Australia, Cadbury has turned to social media this year to market its eggs.
The new approach allows Cadbury to reach the growing number of consumers looking for product ideas and information online, as well as to target younger adults who are typically less involved with the brand than its traditional family market.
The three products to be heavily marketed online are Egg 'n' Spoon, Cadbury Creme Egg and Caramel Bunnies.
Cadbury expects to sell about 200 million Easter eggs this year in Australia. We're very excited about Egg 'n' Spoon which hits the UK soon.
And finally a little freebie we found online... Rock+Paper+Scissors are giving away free Easter bunnies. Just print, cut, and stick them together.
Here at Bloom we wish you a Happy Easter - and a lovely 4 day long weekend (if not more!)
Royals are some of the oldest brands. In the centuries before national tourist boards, royal courts were the primary advertisements for their kingdom. The tone of the court influenced the realm’s style, behaviour and the economy. Thus the Spanish Habsburgs’ love for horses fuelled a swift trade in the majestic beasts, while the Bourbon’s passion for fashion created a silk industry in France without equal on the Continent.
Although they are no longer the sole representatives of brand Britain, the Windsor family undoubtedly still makes a valuable contribution to our economy. In particular the frenzy surrounding William and Catherine has helped give a boost to British brands and Britain as a brand.
In light of this we’d like to do a quick brand health check on the British royal family. For the most part they are helping steer our economy out of a turbulent patch. However there are a few concerns when it comes to the long-term future of brand Windsor, which cannot be divorced from brand Britain.
Will and Kate excelled themselves in Canada, but it was in Hollywood that they really made an impact. There they filled a gap in the market, bringing gravitas and tradition to a land of manufactured glamour. It was incredible that two twenty-somethings could make some of the world’s most powerful celebrities nervous.
The Duke and Duchess of Cambridge are promoting exactly the right image for Britain right now. In the past we’ve been known for our imperial prowess, industrial ingenuity or Brit pop sound. But these are no longer niches we can own. Instead Will and Kate have helped create a new image for Britain, one that is regal yet accessible and, most importantly, incredibly well suited to Britain’s fastest growing industry – luxury.
The roaring success of Burberry trenches and Mulberry Alexas is a testament to the unique international appeal of our luxury goods. They are understated with a distinctly British heritage, just like the royal couple. It’s an image that the rest of the royal family can’t quite equal. The Queen commands great respect, but she is not accessible in the same way. Whereas Kate may have worn McQueen to her wedding but you can steal her style by shopping at High St chains like Reiss, Whistles and L.K. Bennett. Herein lies the secret to growing Britain’s luxury brands. The fashion houses should maintain an air of inaccessibility while quietly pushing entry-level products. They are starting to do this but they need to emulate the size and scale of the Diors and Armanis of this world to reach their full potential as global brand powerhouses.
Brand Will and Kate have done an incredible job of boosting the profile of Britain and providing a very lucrative model of behavior for British brands to follow when overseas. However there are a couple of lingering concerns. International commentators lack the same fondness for Charles that they have for his mother and son. The reception for Charles and Camilla was notably cooler two years ago when they toured Canada. One wonders whether there is a danger of range cannibalization? What will the opinion of Britain be when the Prince of Wales ascends the throne? Perhaps some damage control needs to be done to prepare for that event.
Furthermore beneath all the admiration for Kate’s sparkling smile and tasteful tailoring, there are rumblings over whether she will ever reveal more of her personality to the public. There are flashes of it but in front of the camera she appears to lack the emotional depth that we expect of brands nowadays. The tabloids have chosen to fill the vacuum with comparisons to Diana, which though complimentary are presumably upsetting.
Will and Kate have made an excellent start but in order for them to have true longevity as a brand, Kate must come out from under Diana’s shadow, define her position and take her place as a brand advocate for modern Britain.
Each day countless new products and services are launched, the majority of which fail. Look at a single brand in isolation and you will find the good (Virgin Atlantic), the bad (Virgin Brides) and the ugly (Virgin Cola) of brand extensions. Countless articles have been written about the best and worst examples so we thought we’d focus on brands that do more than extend, they disrupt, creating new categories in the process.
Brands require careful management. Stretch them too far and they can snap. But get it right and the rewards can be huge. Create a lucrative new category and you own it. By the time others have entered the race you’re already round the first bend.
Market leaders are often best placed to create new behaviors. The classic example is the Clinique three-step system. The line was created when Estée Lauder, the cosmetics mogul, read an article written by dermatologist, Dr. Orentreich, which stated that clean skin was the root of healthy skin. From this simple principle stemmed a revolutionary range of scent-free cosmetics that turned the simple act of washing your face into a skin care regime.
Today brands no longer need a dermatologist’s endorsement, they have become trusted ‘professionals’ in their own right. Consumers will allow new product launches to guide their behavior, particularly when a well-known brand enters a new field. The big brands have an advantage because both the retailer and consumer are more likely to trial a familiar name, even if it’s in an unfamiliar field, as long as the transition makes sense.
The potential for failure is huge which is why many companies invest millions at the front end to create, research and craft a product that’s truly compelling. There are a number of brands that have achieved it and rolled out brand extensions that broke the mould, to create a new experience that most consumers hadn’t even realized they were missing out on.
Old brand, new audience
The classic example is of course the Wii. Rather than incremental innovation, Nintendo put their core consumers to one side and gambled ‘the house’ on a ground-breaking product that brought the video game out of the teenage boy’s bedroom and into the lounge. Crucially they didn’t stop there, they kept innovating. The recently released Wii U fuses the popularity of the tablet computer with the interactivity of the original Wii to create a family-friendly device that fills niches the Xbox Kinect cannot.
Tapping into a trend, creating a movement
L’Oreal is an outstanding example of a brand that noticed small changes in consumer’s behavior and used it to carve out a whole new category. Scores of brands had dipped their toes into the men’s skin care arena but L’Oreal put the full weight of their organization into creating a comprehensive men’s skin care range. Like what Clinique did for women in the 60’s L’Oreal did for men in the 90’s, creating new habits and gradually extending consumer’s consumption into new areas. L’Oreal has since replicated this feat in China, experiencing 40% growth in the men’s skin care market in 2010. Making value essential
Waitrose also achieved a double whammy when they launched their Essentials range. Of course it was a response to inevitable changes in consumer behavior after the downturn, but it defied the traditional ‘value’ range model that The Big Four had had for years. Waitrose showed that value doesn’t have to mean trading down, it could mean ‘staple’. Accordingly their traditional clientele could afford to maintain their consumption levels, and new consumers could now ‘trade up’ and buy into the Waitrose ethos. Off the back of this success Waitrose has gained confidence to launch their ‘LOVE life’ range, which makes it easier for consumer to select the healthiest options. Watch a newspaper
Apple has used the emotional pull of its brand rather than functionality to drive consumption. Initially consumers weren’t sure they really needed an iPhone and iPad. The former didn’t seem to be particularly good at being a phone and the latter seemed to be an emasculated laptop. But the social cache of the brand created a snowball effect, changing the way we interact with the world around us, igniting the push towards mobile technology and redefining entertainment, as the latest iPad 2 ad demonstrates.
The key to the success of these disruptive brand extensions was two fold. Firstly the brand owners were listening carefully yet broadly, spotting new opportunities outside of their daily focus. Secondly, once they spotted an opportunity, they didn’t enter the fray half-heartedly but put considerable effort into designing and promoting a product that would meet these needs. It’s vital that brands don’t falter at the finish line, especially when they’re trying to convince consumers of a product choice and experience they’re unfamiliar with. It’s a difficult task, but if carefully crafted it can be hugely rewarding.
A few weeks ago we looked at 4 different strategies for brands entering emerging markets. This week we’d like to continue that theme with a look at how brands have adapted to become accepted.
When discussing emerging markets we usually spend a lot of time talking about ourselves. How is growth in the East going to affect Western jobs? How will our economy benefit from exports to Brazil? But we’d like to consider the reverse of the coin – what do consumers in emerging markets think of the West? A cursory bit of research reveals that opinions are mixed. The West has defied the Chinese government (Google), come under scrutiny for dubious practices (Apple’s Foxconn factory) and, at its worst, deceits that have enraged both the developed and developing world (Nestle powdered milk scandal).
But the picture isn’t all doom and gloom. Luxury brands are doing a steady trade in emerging markets with BMW announcing this week that it is going to build a new plant in Brazil and is expanding its presence in other emerging markets.
However the luxury market is already quite developed in BRIC countries and the target market is relatively small. The real opportunity for western brands lies in winning over the growing middle class.
Although the dynamics of every category are different, we’ve identified a number of ways that food & drinks brands can gain greater momentum in emerging markets.
Many luxury brands appeal to emerging markets through provenance of design, culture and status. In contrast western food and drinks brands are generally better off playing down their roots. The following are a number of strategies that brands can use to win over consumers in emerging markets:
Adjust the product
Some brands are so iconic they can’t help but be associated with the land of their birth. McDonald’s is one such example, but they’re not afraid to adapt. You won’t find any beef burgers in India and in China you can order your McDonald’s to be delivered by a man with a backpack on a bike.
Adjust the proposition & positioning
Maggi has achieved success in India by tailoring its offering to meet consumer needs. In Europe it’s primarily used as a seasoning, akin to Knorr. With the Indian palate being so different, this strategy was never going to translate directly. Instead Maggi launched into the Indian market as a range of instant noodles, becoming hugely popular and creating a brand that it is now worth over $4billion.
As in the West, Maggi still positions itself as a helper in the kitchen, but it has focused its proposition on simple solutions (noodles, soups, pasta) that take the worry out of meal times. It has also tailored this message to the Indian idiom with ads that feature local celebrities and it has dropped the foodie cues that feature in western markets. Maggi took advantage of the fact that, unlike MacDonald’s, it had the flexibility to really behave like a native in order to win market share.
Reinvent the positioning
Although Horlicks has been in India since before the market was labeled ‘emerging’ it still provides an excellent example of how brands can undergo a quite radical transformation in order to succeed in new markets.
Although marketed in the UK as a sleep aid, Horlicks positioned itself in India as the ‘Great Family Nourisher’, a nutritional supplement akin to Activia or Actimel. This position was better suited to India’s dietary needs and has stood the test of time. Horlicks now owns over 50% share of the health food & drink market in India. Additionally the occasion extends beyond bedtime - Horlicks is served regularly at cafes, both hot and cold, as well as being sold in biscuit and energy bar form.
Contribute to the community
Thinking beyond the brand itself, western corporations have also earned respect in emerging markets by embarking upon sustainability initiatives. Unilever has gained a lot of kudos for its program to alleviate poverty in Ghana and Tanzania by planting allanblackia trees whose oil can be used in their spreads. This genuine impulse to improve the lives of locals generates positive press and stimulates the emerging middle classes in these markets to invest in these products as well as others that feature under the, increasingly prominent, Unilever banner.
To win in emerging markets food and drinks brands can adapt, immerse and, if all else fails, extend the hand of friendship.
This week we’re initiating a new thread that will explore branding trends in emerging markets, with a focus on how western brands in particular are making the transition.
Brazil, Russia, India and China (BRIC) are the fastest growing markets closely followed by Turkey, Mexico, Nigeria and Indonesia. The emerging middle class in these markets present the largest opportunity. Consisting of over two billion people, they are currently spending about $6.9 trillion annually, set to rise to $20 trillion in the next decade.
Furthermore there is clear potential for a first mover advantage, as was true when the West experienced its boom in consumerism in the early 20th century. McKinsey has found that the market leaders of 17 different product categories in the United States in 1925 remained either number or one or two for the rest of the century.
So brand owners need to act fast and strategically to gain a return that justifies the considerable capital investment required to get these brands off the ground. There are numerous obstacles when moving abroad, in particular local competition, which we’ll be exploring in more detail in the coming weeks. However there are two key factors that brand owners must take into account when moving into emerging markets:
Degree of localisation – Globalisation has meant that consumer tastes are increasingly homogenised but brand owners must still take into account local variations.
How accessible and affordable the product is – The emerging middle class has a lower percentage of truly discretionary income, with 40% of their income being spent on food and transportation in China and India compared to 25% in the USA.
Taking into account these factors McKinsey has identified four strategies that can help companies serve middle class consumers in developing markets, helpfully mapped out onto the diagram below.
Strategy 1: Create a platform
This sector of the diagram comprises products that are in demand or relatively accessible and where the consumer needs are quite similar across the globe. This includes personal banking, mobile communications and pharmaceuticals.
The most important thing here is to be seen. Brands don’t have to change their strategy massively, they just need to have a strong presence. In India Vodafone has created new ads but used essentially the same brand strategy and strap line, managing to become the third largest mobile network in the process.
Strategy 2: Target niche
These tend to be products that are widely available in the developed world and premium in the developing world. Yet they’re still appealing to multinationals because these consumers are increasingly prosperous and their behaviour resembles that of consumers in the developed world, making the transition easier.
LG is an example of a brand that is fairly mass market but has started behaving more like a premium product in emerging markets. They have found that emerging middle class consumers are more willing to pay for better service than their counterparts in the developed world and therefore have launched a premium offering that gives consumers a full time contact person and a guaranteed response time of 6 hours as opposed to the usual 24.
Strategy 3: Shape or localize
This is a tempting sector with huge potential for growth in this highly accessible end of the market, but tastes are often very localised and so businesses must be clever in how they appeal to this segment.
For example PepsiCo has launched Kurkure, a snack brand that feels entirely local, though packaged and distributed by Frito-Lay. By appearing to be local Pepsi can win loyalty and then use its extensive range and expertise in snacking to outpace the competition.
Other strategies for penetrating this affordable yet localised market are to use celebrity endorsements or work with local partners.
Strategy 4: Reinventing the business model
Global brands that fall into this part of the diagram struggle as needs are very local and affordability is a challenge, therefore these brands require the most significant change. McKinsey recommends that multinationals approach this task by carefully gauging the level of spending likely to be unlocked and then re-evaluate their business model from start to finish in order to figure out how to make their products more accessible.
SABMiller for example realised that at their current price point they wouldn’t get enough demand in Africa. They retooled their factories for cheaper, locally sourced ingredients and used local distributors, cutting costs wherever possible to deliver a more affordable product that suited the market.
This is obviously just a top line summary of strategies that brands can use to capitalise on the emerging middle classes. Over the coming months we hope to elaborate on the opportunities and problems facing brands in emerging markets. Watch this space.
