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Retailers, consumers and prices

August 4th, 2009

RadioShack ditching Radio in favor of The Shack

Posted by: Nicole Maestri

RadioShack is giving itself a new, shorter nickname - The Shack.

rsh

The gadget retailer is introducing a new ad campaign and intends to refer to itself as The Shack - something it says customers have already been doing.

“Our customers, associates and even the investor community have long referred to RadioShack as ‘THE SHACK,’ so we decided to embrace that fact and share it with the world,” said Lee Applbaum, RadioShack’s Chief Marketing Officer, in a statement.

While consumers often think to go to RadioShack to buy cables or batteries, the retailer said it is “critically important” that customers also think to go to it for mobile products.

“You will see a real focus on mobility and wireless products from leading brands in our new advertising,” Applbaum said.

The branding change brings to mind a switch made by former rival Circuit City.  Circuit City began calling its stores “The City” not long before it filed for bankruptcy protection and then liquidated it stores.

(Photo: Reuters)

May 1st, 2009

Starbucks strikes back

Posted by: Lisa Baertlein

sbuxbewareStarbucks wants you to know that it is not the home of $4 coffee, and it’s launching a multimillion-dollar ad campaign to make sure you get the message that its brew is not an expensive luxury.

“Starbucks coffee does not cost $4,” Chief Executive Howard Schultz said this week when he announced the new ad blitz. The ad at left will run on Sunday in the New York Times.

In an email promoting its new campaign, Starbucks said: “Everybody is looking for value, but value doesn’t just mean what’s cheapest; it’s about what’s best for consumers, their families, their communities and the world around them.”

When the company was growing like gangbusters, it relied mostly on word of mouth advertising. ”But during that time … they became, kind of jokingly, the home of $4 beverages,” said William Blair & Co analyst Sharon Zackfia.

The reality is that most Starbucks rivals — with the exception of McDonald’s — have the same pricing, Zackfia said.

Starbucks drip coffee starts at around $1 and stays well below $4, while its specialty coffee drinks like mochas, lattes and Frappuccino blended drinks can top $4.

torpedoes-coffee

Chains like McDonald’s — which is wrapping up its U.S. buildout of in-restaurant McCafe counters –Quiznos and others have used Starbucks $4 coffee reputation to their advantage. 

Last year, McDonald’s operators in Seattle covered the city that gave rise to Stabucks with billboards reading “four bucks is dumb” and “large is the new grande.”

(Art courtesy of Starbucks, Quiznos)

March 25th, 2009

Pothole filling that’s finger-lickin’ good

Posted by: Brad Dorfman

kfc11KFC wants to fill potholes in your city. 
 
But there is a catch: instead of streets full of tire chewing craters, your streets will be filled with KFC logos, at least temporarily.
 
To promote its freshly prepared fried chicken, KFC is sponsoring “fresh”ly [sic] “filled up” potholes in up to five major cities in the United States.
 
KFC has sent offers to mayors nationwide asking them to describe the bad shape their city’s streets are in. Four of those cities will be chosen and KFC will pay for materials and labor to have potholes filled in those cities. KFC already began filling potholes this week in its hometown of Louisville, Kentucky.
 
A spokesman for KFC would not say how much it will cost to fill the potholes. But the offer comes as cash-strapped cities are looking for ways to save costs.
 
“Budgets are tight for cities across the country, and finding funding for needed road repairs is a continuing challenge,”  Louisville Mayor Jerry Abramson said in a news release.
 
Some of the filled potholes will also be stenciled with a logo that says they were “re-freshed by KFC.” The spokesman said the stenciling will be done with nonpermanent spray chalk, so they will eventually go away.
 
And what’s a little logo here or there if it means a smooth ride?

(KFC photo)

March 12th, 2009

Jack is Back!

Posted by: Lisa Baertlein

By Shivani Singh

jackcomaJack Box, hamburger chain Jack in the Box’s snowman-faced mascot, is alive and kicking.  

Last month, the mascot was hit by a bus in an advertising spot aired during the Super Bowl. The campaign continued online for a month, with a cliff-hanger that left fast-food fans wondering whether Jack would survive. 
  
jack-logoFollowing some intrigue involving corporate underlings, Jack woke up last week to take back the reins of the company and launch its new logo that blows up the word ‘Jack,’ which is how most customers refer to the fast-food chain. 
 
The post-Super Bowl viral campaign targeted the company’s core audience of mostly 18- to 34-year-olds, who used YouTube, Facebook and Twitter to cook up millions of hits, Chief Marketing Officer Terri Graham told Reuters.  
 
The multichannel campaign was also supported by coupons. On Tuesday, the company gave a free soda and small fries to people who printed a coupon on the ‘Hang In there Jack’ site. Restaurants saw an increase in traffic on the days the coupons were offered, the company said. 

Fast-food companies have been quicker than other restaurant operators to embrace technology and social media. Rival Burger King made a splash earlier this year with its Facebook campaign that gave a free Whopper to users who dumped 10 friends.
 
The next phase of the Jack in the Box campaign is scheduled for March 16, when the company debuts a new website where users can sign up to get Jack do their dirty work — whether it’s calling in sick or breaking up with a girlfriend or boyfriend.

(Photos\Jack in the Box)

February 6th, 2009

Kellogg drops Phelps after photos

Posted by: Paul Thomasch

We won't be tempted by puns. Or any sort of lame wordplay.  We'll play this straight. Seriously. Here goes: After all the bad publicity caused by a photo of Michael Phelps apparently taking a bong hit, Kellogg has decided to dump the superswimmer.

Okay, now that's out of the way. Here's the basics from Reuters:

The world's largest cereal maker said on Thursday it would not extend a contract with Phelps, who charmed audiences in Beijing last year with a record-breaking, eight-gold medal haul, saying the photo of the swimmer was inconsistent with its public image.

Phelps, estimated to make millions of dollars annually from marketing deals, issued an apology this week after a British newspaper published a photograph purportedly showing him smoking marijuana during a student party at the University of South Carolina in November.

The move doesn't come as a complete surprise. Marketers often get nervous about this sort of thing, especially when forking out big bucks in this economy. Phelps has other deals worth millions of dollars with brands including Speedo swimwear, Omega watches, Visa Inc, Subway sandwiches and Hilton Hotels. Phelps's agency, Octagon, said earlier this week that it had been in touch with his sponsors and that none had indicated any intention of backing out of their deals.

What changed? What's the deal with Kellogg? The difference? One marketing executive tells AdWeek that it's all about the kids.

Kevin Adler, founder of Engage Marketing, a sports-marketing firm in Chicago, said Kellogg’s decision comes as no surprise. While others may not have gone public in their stance towards Phelps, it’s imperative that Kellogg do so because after all, the cereal maker is heavily perceived (as) a kids’ brand, he said.

“Athletes are brands. That’s the most important umbrella concept we have to understand is if you do something that runs contrary to your brand image, it will affect your ability to monetize that brand image. It really kind of is that simple,” said Adler.

Over at Gawker, they had a slightly different take.

Kellogg, in the most boneheaded move in the entire history of all celebrity endorsements ever, is dumping Michael Phelps over his pot photo. Has any brand ever been more out of touch with its customers?... Hello? This is the best possible recommendation one can make for breakfast cereal, the favored foodstuff of THC-induced munchies victims everywhere."

Ahhh, advertising.

Keep an eye on:

  • Bruce Springsteen in none to happy with the notion of a Ticketmaster-Live Nation merger (Bruce Springsteen)
  • U.S. magazine empire Conde Nast has replaced the publisher of The New Yorker, as the number of ad pages tumbled during the past year (Reuters)
  • Rockers, rappers and record executives gather in Los Angeles on Sunday for the annual Grammy Awards, but there is little to celebrate at the music industry's biggest night (Reuters)

(Photo: Reuters)

January 8th, 2009

Dump 10 Facebook ‘friends,’ win a Whopper

Posted by: Lisa Baertlein

JAPAN BURGER/If ever you needed a reason to clear the dead wood from your Facebook posse, here it is: Burger King will give you a free Whopper hamburger every time you cut 10 of your “fair-weather web friends.”

But beware. While Facebook lets you anonymously eliminate your “friends,” the Burger King application notifies them when you “sacrifice” them in your quest for free fast food.

The Whopper Sacrifice ad campaign, spotted by Adweek, sends a message alerting your former friend that the sentiment you carry for him or her is nothing compared with the sizzle of a Whopper.

According to the Whopper Sacrifice web site, more than 12,000 friends have been bitten the dust — all for a (roughly) $2 Whopper.

In an economy like this, is anyone safe?

(Photo/Reuters)