Just a bunch of goodies from Marketing Daily that deserve a second look, now that the weekend is here:
Premium Brands Face Dilemma As Generics Gain Ground
Financial Times
Beware the "ghost of Marlboro Friday," warns UBS analyst Alan Erskine. In a note to clients, he recalls when Philip Morris slashed the price of Marlboro cigarettes in a bid to fight back against generic cigarettes. The April 1993 decision backfired big time. Consumers questioned the premium value of the historic brand; PM's shares took a beating.
The dilemma PM faced is similar to the one facing the big brand owners now, Elizabeth Rigby reports. Shoppers have been happy to spend more on recognizable products such as Unilever's Dove shampoo and Procter & Gamble's Gillette razors when times were flush, but they are turning to generic brands as the economy turns south. Things will get worse before they get better, UBS' Erskine feels.
"Consumers down-trade in food, not through choice but through economic necessity," he writes. "And, as a consequence down-trading occurs much later in the economic cycle -- when unemployment peaks -- than with other consumables." Unfortunately, most analysts predict higher unemployment figures in the months ahead. - Read the whole story...
Kellogg Dropping Michael Phelps Over Bong Photo
Ad Age
Kellogg will let swimmer Michael Phelps' contract expire at the end of February and has also decided to not renew its Olympic Team sponsorship, which expired in December. "Michael's most recent behavior is not consistent with the image of Kellogg," the company said in a statement. A photograph of Phelps taking a hit from a bong has traveled wide and far in recent days.
Emily Bryson York reports that the photo of Phelps' behavior was a "second black eye for Kellogg," which signed him to an exclusive-for-cereal deal, keeping him off General Mills' Wheaties box. But three months later, Anderson Cooper raided Phelps' cabinets as part of a "60 Minutes" interview and found a box of GM's Honey Nut Cheerios.
Subway, which has a campaign featuring the athlete ready for the airwaves, declined to comment on the photo. Its work seems likely to be delayed, Bryson York says. - Read the whole story...
Saturn And Chrysler Dealers Face Uncertain Futures
Detroit Free Press, AP
Saturn dealers left a private breakfast meeting last week with General Motors executives in New Orleans saying they learned little more than before about the future of the troubled brand, Tim Higgins reports. GM executives have said the brand is not profitable and that something must be done to correct the situation quickly.
"Let's face it, if you tried to sell a Saturn franchise today, there are no buyers," says John Pohanka, chairman of a Maryland-based group that owns three Saturn dealerships.
Mark LaNeve, vp of GM North America, says the automaker has been talking extensively with its dealer body about various alternatives to improve the business model. He notes that the assets of Saturn -- the brand, its dealers and customers -- "are incredibly positive."
An Associated Press story in the Freep, meanwhile, reports that Chrysler vice chairman Jim Press prodded dealers to take more vehicles during a conference call Thursday. "You have two choices," Press told the group, according to Automotive News. "You can either help us or burn us all down." Chrysler spokesman Rick Deneau says the call was meant to be a private internal discussion between the company and dealers. - Read the whole story...
Patrón's Ultimat Vodka Debuts At $40 A Bottle
Wall Street Journal
Twenty years ago, Patrón almost single-handedly elevated the image of tequila in the U.S. with the launch of its costly flagship beverage, Patrón Silver. It's hoping to do the same for vodka as its new $40-a-bottle Ultimat brand goes up against Grey Goose (about $30) and Ketel One ($23) for the attentions of premium vodka drinkers. Produced in Poland, it will be sold in 750-milliliter cobalt-blue crystal bottles.
Ed Brown, Patrón Spirits' CEO, thinks Ultimat can be distinguished from other high-end vodkas through marketing and the product's unusual ingredients. Although vodkas are neutral in taste, Ultimat is purportedly the only one distilled from a mixture of potatoes, wheat and rye. "I really believe that certain companies are really good at certain things, and we're very good at ultra-premium spirits," Brown says.
Ultimat is hitting bars and stores as consumers are drinking more at home, rather than at bars and nightclubs, according to analysts and industry executives. That could prove a hurdle to Ultimat since liquor brands often are launched with promotions in bars, David Kesmodel writes. - Read the whole story...
All That Glitters Is Not Cash4Gold
Los Angeles Times
Two words jostled for prominence in my mind as soon as I saw Ed McMahon pitching for Cash4Gold.com, the metal refinery that offers money for jewelry, during the Super Bowl last Sunday: sad and sleazy. The sad, of course, is that Ed McMahon, whose commercial career has not heretofore been distinguished by the classiest of choices, seemed to have hit a new low following his highly publicized financial problems. The sleazy part seemed self-evident.
David Sarno reports that there's indeed more than met our eyes. "Cash4Gold's jewelry exchange doesn't always translate into big bucks for its customers, who have lodged hundreds of complaints with the Better Business Bureau and the Florida attorney general's office, saying the company shortchanged them," he writes.
The Florida attorney general's office says it is examining nearly 60 complaints about Cash4Gold, including some from people who were disappointed by the amount of money they received in exchange for their jewelry. An investigation conducted by "Inside Edition" sent the company 23 pieces of gold that a jewelry expert had valued at close to $1,000. Cash4Gold sent a check for $209.81, an amount at which the expert scoffed.
Cash4Gold CEO Jeff Aronson defends his company's track record, saying that 269 Better Business Bureau complaints in the last three years out of 700,000 customer transactions is commendable. "Tell me one company in the world that wouldn't die for that ratio," he says. - Read the whole story...
Right Guard Going To The Hoop For Xtreme Fast Break
NY Sports Journalism
Right Guard's Xtreme Fast Break deodorant will hit shelves in March with multi-media marketing including product placement, print, Internet and a storyline in the new season of "The Apprentice," Barry Janoff reports. NBA all-star Chris Paul will be the spokesman, as the brand steps back a bit from extreme sports. - Read the whole story...
Q&A With Dairy Queen's Chief Brand Officer, Michael Keller
Brandweek
Dairy Queen is rolling out a value menu called "Sweet Deals" this week, Keller tells Elaine Wong. The nine-item combination brings together offerings from DQ's frozen treats and fast-food menu list for $5 or less. It also is placing greater emphasis on its "collective brand experience." - Read the whole story...
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