Monday, November 24, 2008

"Sticky" Food Prices

I just finished a Washington Post article ("The Frugal Gourmets," Nov. 21) that offered some interesting views into retail food sales. As you might expect, many shoppers are seeking value, rather than top-quality, when searching for food. With increased economic uncertainty, as indicated by a continued fall in stock market indices, many buyers are looking to save money on food purchases.

The article cites research showing that consumers are shifting away from restaurants toward grocery stores, preparing more of their own meals. However, they are finding that lots of grocery item prices are "sticky." That is, the prices were quick to move upward with increases in commodity (oil, grain, meat) prices. However, grocery prices have been slow to follow commodity prices back down.

What does a shift in consumption mean for you? Does it signal a shift away from high-valued fruit or vegetable crops? Does it make it even more important to hone in on those consumers that will continue to purchase such items? Does it allow you to maintain higher prices; thereby increasing your profits? Whatever the case, the situation points out the importance of knowing the customers and the markets in which you operate.

Tuesday, November 18, 2008

Obama and Facebook: Why so successful?

As Jeff talked about in his last post, Obama changed the face of campaigning forever. No matter your political affiliation, we can all learn from Obama's campaigning techniques. One of the places Obama has a huge presence is Facebook. If you're not familiar with Facebook, click here to read about what it is and how to set it up.

Facebook is a free service that allows people to create personal profiles about themselves and join groups that interest them. You can then read other people's profiles and add them to your friend list. As of 1:30pm today, Obama has 3,167,461 friends and McCain has 608,657. How can Obama possibly have 5 times more friends than McCain? Check out both of their pages. The McCain page reads more like an advertisement and doesn't seem to be very dynamic. Also, his page only seems to be updated with new info (videos, messages, etc) about once a month. Obama, on the other hand, has turned his page into a place where people can come to see new posts almost daily. There are posts on his page from a few days before the election asking people to change their Facebook picture to an Obama graphic to encourage people to vote. McCain's page is static. If you saw it 3 months ago and not again until today, not much will have changed. Obama took his page to a level where people could visit daily and read new articles, see new videos, and read notes from Obama.

How did Obama's page become so dynamic and important to his campaigning strategy? He hired one of the original founder's of Facebook, Chris Hughes, to maintain his new-media presence. In an article in the NY Times, Obama credits the Internet’s social networking tools as a “big part” of his primary season success. He has also said that "there’s no more powerful tool for grass roots organizing than the Internet.”

Is Facebook a good advertising tool for your business? Because Facebook is free to use, I believe that developing a page for your business wouldn't hurt. To get people to your page (and create a buzz about your business), you need to keep your page dynamic. You don't need a Chris Hughes on staff to do this. All you need to do is keep people interested!

Sunday, November 16, 2008

Election 2008: A Lesson in Marketing

A disclaimer... This entry is by no means intended to reflect or endorse any particular political views. But I think some business owners can learn a lot about how Barack Obama and John McCain handled their respective campaigns. So let's take a brief look at each from a marketing perspective.

First, think about the consistency and clarity of their messages. Can you name either of their slogans? Do you recall the main themes of each campaign? By next election, most of us will probably remember "Change" or some version of it. But, who will remember "Country First?" (How many of you knew that was John McCain's campaign slogan?) The phrases "Change" or "Change We Can Believe In" or "Change We Need" were everywhere; signs, bumper stickers, internet ads, t-shirts, hats, mugs, pins, and just about anything else you might imagine. This point underscores the importance of clear and consistent messages about your products or business. No matter who your audience is, or how they receive the message, be sure they get the same message that you're sending to all others.

Next, think about market segmentation and promotional tools. McCain used traditional communication tools such as TV, radio, and a webpage. When he used these, they were typically in the form of an ad or commercial. He did a great job at reaching those who tend to get news from those sources. Unfortunately for the campaign, that is growing to be a relatively small number of voters. Obama used these tools as well. However, he also used tools, such as text messaging, to reach different (i.e., younger) audiences with his message. Recall that he announced Joe Biden as his running mate via text message. Everyone who signed up for it, the public and the media, received word at the same time. He also bought ad space in some video games. Obama also has more than 3.1 million supporters on Facebook.

What this indicates to me is that the campaign was able to zero in on their audiences and get their message to them where they were. Can you do this in your business? Will the young mother interested in your CSA learn about it the same way that the retired attorney will? If you want to sell your agritourism product, such as a corn maze, do you advertise to church groups in the same way that you would to families looking for a weekend activity? Probably not. Look for ways to target your message to your different segments.

Finally, think about how you might segment the market. Both campaigns segmented by age, race, gender, education level, political affiliation, religion, and all of the other factors that we have heard so much about. Here again, the McCain campaign was able to hit these different segments by appearing at rallies in different locations and venues. Obama did the same thing. However, Obama took it to another level. When a donation or purchase was made on his website, he required the user to provide contact and demographic information. He was able to use this to cross-reference users to solicit more donations and develop more targeted marketing strategies. What do you know about your customers? Who is buying your product? Where are they buying your product? What other products might you be able to sell to them? You should know your customers' profiles and you should be able to use that information to garner more sales.

Regardless of your political persuasion, you should be able to concede that the way presidential candidates will be marketed in the future is forever changed because of the success of Barack Obama's campaign. A Google search will yield a lot more information than what I've provided here. My message to you is; look for marketing tips wherever you can find them. In my view, the 2008 presidential election provides some nice case studies in marketing.

I welcome your feedback...

Thursday, November 13, 2008

Smart Choices Program

When you hear 'new nutrition guidelines', what is the first thing that pops into your head? For me, I think 'new government regulations'. Surprisingly, the newest nutrition guidelines are being implemented voluntarily by many major food producers.

What exactly are these new nutrition guidelines? The Keystone Center, a non-profit organization specializing in creating solutions to public health problems, unveiled a voluntary front-of-package nutrition labeling system called the Smart Choices Program on Oct 27.

The Smart Choices Program includes a front-of-package symbol that identifies more nutritious choices within specific product categories. The label also provides calories per serving and servings per container. The goal of the program is to help consumers stay within their daily calorie needs.

Some of the major proponents of this new labeling system include Coca-Cola, ConAgra, General Mills, Kelloggs, Kraft, Pepsi, Unilever, and Walmart. How do you feel about this new label? Will this change America's eating habits? Is this just another piece of clutter to add to packaging? Would you want to voluntarily put this label on your product?

Smart Choices Program article