Back To The Future

Here is what the Big Boys are saying about what's in store for 2009!


2009 Industry Outlook:
When times get tough, the tough go back-to-basics
By: Tom Pirovano, Director of Industry Insights, The Nielsen Company



When times get tough, the tough go back-to-basics. Expect a no-frills philosophy to kick into high gear in 2009, reflecting not just a consumer mindset, but one that is paramount to retailers and manufacturers alike, who are looking for growth in a downturn economy. From sustainable manufacturing techniques to innovative national brand offerings, the products and services likely to succeed in 2009 will be those that appeal to the sensible consumer looking for a rational benefit.

Based on industry trends, marketplace dynamics and the expert knowledge of Nielsen analysts, below is a preview into twenty of the trends—in no particular order—that are expected to shape the New Year.

“Going green” will be fueled more by cost-cutting than planet-saving intentions.
Families on a tighter budget will be less likely to pay extra for environmentally-sustainable “green” products, but they will improve the environment as a by-product of cost-cutting strategies. Expect consumers to continue saving money on gas by combining errands (lowering car emissions), and on purchasing less non-essential goods (producing less waste). Manufacturers will also incorporate more sustainable manufacturing techniques to save on costs by using more efficient product packaging—also good for the environment.

The adoption of Internet capability on phones shows no signs of slowing...

Cutting-edge wireless devices will expand.
With a near saturation of mobile subscriptions in the U.S and competitive price pressures, expect operators to attract new customers with cutting-edge devices and advanced data services to drive higher subscriber revenue. Mobile Internet subscriptions are up 32% year-over-year in the U.S., and the adoption of Internet capability on phones shows no signs of slowing. Look for an even greater push for services such as mobile Internet and mobile video, as well as an array of new “Swiss Army” style phone-as-media-devices to broaden the mobile consumer experience.

National brands will offer innovation to win back store brand business.
2008 saw unprecedented growth of private label sales. In the early part of the year, private label dollar growth was driven by higher pricing. As the economy continued to struggle, however, more and more consumers began replacing their branded products with private label equivalents. Winning back these shoppers will not be easy for branded manufacturers. Look for established brands to aggressively go after private label switchers with innovative packaging, unique flavors and additional health and wellness claims.

Cinema admissions will increase fueled by growing availability of 3D movies and theatres.
While many families are likely to keep a tight reign on their budgets in 2009, movie theatres might just be the exception. Why? Consumers appear to love 3D films. In fact, gross sales increased over 60% for films exhibited in 3D as compared to traditional film, and this increase is due to higher prices and higher attendance. With over a 1000 3D theatres already in the U.S. and with studios helping to fund the transition from 35MM to 3D, 2009 is looking particularly good. In fact, with as many as 11 major movie releases expected to hit the screens in 2009, including James Cameron's "Avatar", this is bound to have the cinemas seeing green.

Expect the growth of UPC-coded organics to decline...

Growth of organics will slow dramatically.
Unless organic marketers can do a more effective job of demonstrating better taste or concrete health benefits, expect the growth of UPC-coded organics to decline to less than +10% . For each of the past five years, products labeled “organic” show year-after-year growth of greater than 20%. In recent weeks, however, this dramatic growth rate has slowed to as low as +4% vs. year ago in recent weeks.

Old can be new for some last-generation gaming consoles.
Last-generation consoles (and even older consoles) are still being used, with varying degrees of economic and ad-related implications. The PS2—the best selling console of all time—still dominates as the most used, (29.7% of total usage minutes in September 2008). With a huge library of available games (many available at budget-friendly prices) the PS2 could still enjoy a strong holiday and consistent use in 2009 from owners who have not taken the leap to PS3. How quickly will these PS2 owners migrate to PS3? From an advertising perspective the answer will be important since the PS3 now has an ad network that serves dynamic ads into various games.

Cash will be king.
As credit card companies continue to raise fees on retailers, there is more motivation than ever before to offer discounts for shoppers paying cash. Look for convenience stores to take the lead on cash discounts, as many already offer lower gas prices for cash purchases. As other retail channels offer cash discounts, the credit card companies may get enough pressure to reduce fees for retailers.

Reinventing established brands can be managed as a lower risk innovation strategy...

Marketers will think "renovation" as much as "innovation"
Nielsen has seen steady growth in testing of established brand restages and re-launches over time, and we expect this trend to continue into commercialization as marketing budgets are tighter. Reinventing established brands can be managed as a lower risk innovation strategy. However, making this strategy a success requires a delicate balance of providing continuity to current buyers while offering sufficient novelty to attract new triers.

Text messaging will broaden its audience beyond teens.
Today, Nielsen reports that more than half (57%) of the population texts on a regular basis and the average number of text-messages a typical subscriber sends per month is up 107% year over year (today, subscribers tend to send more text-messages than phone calls). The continued expansion of unlimited text-message packages and the increasing use of text-messaging for search and mobile marketing will help grow this medium overall and expand the universe of users ages 25 and older, who today still send fewer than a third as many text messages per month as their younger counterparts.

Savings from declining commodity prices will NOT be passed on to the consumer .
Over the past several years, grocery price increases have remained modest while other household expenses (gas, healthcare, college, utilities, housing) have all increased prices dramatically. In 2008, food manufacturers felt pressure from retailers to keep price increases to a minimum while production and shipping cost rose significantly. As the price of fuel and food ingredients decline, don’t look for retail price decreases anytime soon.

Ad spending will be tight.
Nielsen reported significant ad spending declines in the first half of 2008 by eight of the top 10 advertisers—down roughly 6% during the same period in 2007. As companies continue to downsize and scrutinize spending, expect these declines to continue, especially within the automotive category and with Financial Services companies. However, product categories such Direct Response Product, which increased spending 20.48%, and Credit Card Services (+18.95%), should continue to spend on advertising.

Expect coupon redemptions to increase...

Coupon redemptions will rise.
As consumers look for more deals, expect coupon redemptions to increase. While coupon activity is actually flat versus year ago, this is positive news as it is the first time in many years that redemptions didn’t fall. As more manufacturers and retailers make it easier for consumers to gain access to coupons via email, mobile phones and in-store methods, consumers will take advantage of this cost-cutting strategy.

Cooking from scratch will make a comeback.
Sales of cooking and baking supplies are on the rise as shoppers are buying more flour, shortening, oils, and even canning supplies. Although the motivation may be cost savings, many families will find that cooking from scratch may be a step up in both taste and nutrition.

Brand prestige will be driven less by premium price.
Expect to see fewer premium-priced new products introduced into the market in 2009. However, focusing on low price may under-deliver on expectations. Marketers should look to emphasize a brand’s value proposition in new and unique ways by linking the value message to the consumer benefit.

Look for less meat to be cut in the store...

Fresh meat will shift from the butcher to the shelf.
As more retailers look for ways to cut costs, look for less meat to be cut in the store, and more UPC-coded meat to be packaged centrally and sold on the shelf. For the past few years, we’ve seen the transition from random weight to pre-packaged, UPC-coded meat. Retailers will need to decide whether they want to compete on price or rely on their butchers and deli counters to create differentiation and customization.

Online activities will continue to grow.
With less money to spend, consumers will undoubtedly be spending more time at home. Nielsen witnessed significant year-over-year (ending September ’08) growth in online activities with increases in time spent daily on videos (+46%), blogs (+20%) and e-commerce sites (+17%). Expect this trend to continue, as well as increases in newer in-home entertainment options such as video vending.

Vitamins may be the one HBC category that will show steady growth...

Vitamins sales will outpace other categories.
While health and wellness trends may come and go, vitamins may be the one HBC category that will show steady growth in 2009. For most of 2008, the vitamin category was the only HBC category to grow unit sales by more than 2%. As the U.S. population gets older and time-stressed families supplement less than desirable eating habits, vitamins will continue to grow unit volume, though competitive pricing may keep dollar growth lower.

Consumers will watch more TV on their mobile phones.
Nielsen expects the use of mobile video to expand in 2009, but not simply by mobile video subscriptions, which today are still too expensive for many subscribers. An increasing number of mobile subscribers are accessing video content through their mobile Internet subscription. This trend will continue in 2009 as mobile data speeds and mobile Internet penetration increase, and as additional Web video options become available to mobile Internet users. Additionally, some subscribers may begin to access local television content on their phones in late 2009, through mobile digital television technology that would allow local stations to broadcast to certain digital-television–ready mobile handsets.

Next-generation gaming consoles will continue to gain traction.
Nielsen continues to see system migration from last-generation consoles (PS2, Xbox and Gamecube) to next-generation consoles (PS3, Xbox 360 and Wii) in terms of usage/gameplay, and this trend is expected to continue. There is variation among next-generation system usage, with attach rates (number of games owned), installed base (number of next-generation systems sold) and blockbuster game releases (Gears of War 2,Resistance 2, Fallout 3, Lips, Little Big Planet, Wii Music, Call of Duty: World at War, etc.) all factoring into the current and short-term usage dynamics. Currently the Xbox 360 enjoys the highest level of usage from next generation systems. But the usage picture could change based on the 2008 holiday sales season. Console cost-cutting measures, inventory levels at retail and potential consumer cost-consciousness may all have impacts on how and when next generation systems will be used .

Book sales will not increase.
Unfortunately, more time spent at home will not translate into increased bookworms. Technology-driven gadgets, gizmos and games will dominate spare-time activities. Expect U.S. book sales to remain essentially flat with a modest 1.5% unit growth rate. Look for a rise, however, in self-help books, as out-of-work consumers look to rediscover themselves.

Notation: Book sales data does not reflect 2008 retail holiday shopping trends.

Crack The Headline Code

Now here are some examples of what we spoke about in the previous article “Insider’s Secrets to Making Direct Mail Work.”

First is an opening that communicates your offer. This can be difficult because your offer has to be written in such a way as to draw in the reader so they want to learn more. In this example we will use a handyman service for homeowners. This could be the headline:

How To Eliminate The Honey-Do List!

Or maybe this headline:

Who Wants to Golf More?

These two headlines make a compelling offer without giving away the service. They feature the main benefit of the offer. The offer could also be stated as a “freebee” or an iron-clad guarantee.

To stress the premier feature of your offer you could highlight free delivery or a comparison of time versus money for the homeowner. Everyone is very conscious about their time these days.

So here is how to add weight to your headline:

How To Eliminate The Honey-Do List!

Then continue with… 1,756 men have thrown their Honey-Do list in the trash with just one call to our service.

Lastly, you need to target your market. Show them you know their pain. Let them know you are aware of who they are. That way you will compel them to continue reading your sales copy. As an example of targeting, you could buy or rent a list of Baby Boomers!

Baby Boomers: Throw Away Your Honey-Do List and Pick Up Your Golf Clubs! Never waste your valuable time again on petty chores. We’ve shown 1,756 Boomers how to squash the list and replace it with balls and tees.

So your goal is to accomplish these three things in your opening: Communicate your offer, stress the premier feature of your offer, and target your market.

Stay tuned for more copywriting tips coming soon.

The Marketer of Marketing,

Pete Swartz

Insider’s Secrets For Making Direct Mail Work

This is the first in a series of weekly articles dedicated to helping you take contol of your own marketing in the "New Economy" both on and off line.


Direct Marketing has components that are easy to teach and are based on principles of testing and retesting, such as placement of headlines, sub heads, and the use of a “Johnson Box” or two. However, there is a huge variable and that variable is your customer. How well you know your customer base and how in-tuned you are to the desires and needs of your customer are crucial.

To teach someone how to avoid writing an unsuccessful direct mail piece is much easier and more predictive of success than teaching someone how to write a guaranteed winner. Even professional direct mail copywriters who earn big bucks cannot guarantee all of their direct mail pieces will bring the desired response.

An effective direct mail marketing piece, whether a post card, letter, or a brochure, must encompass the secret ingredients. Each must include the secret ingredients and each must be able to convince your customer to buy based on its own merits. To begin with your direct mail piece needs an opening headline or short paragraph that accomplishes at least one of these three things:

*Communicates your offer
*Stresses the premier feature of your offer
*Targets your reader

By beginning with these key elements you prepare your customer for your offer by grabbing their attention immediately and “warm them up” to your offer.

Look for more marketing nuggets in the days to come.

The Marketer of Marketing,
Pete Swartz

Marketing Campaign , Big or Small…?

I hope everyone is taking some time to reflect on 2008. It has been quite a year and hopefully there has been lessons learned.

I know I have taken away a whole new prospective on what it will take to market a business in the “New Economy”.

The world of marketing is changing right before our eyes. We are seeing the decline of newspaper media advertising and the explosion of Social Media/Web2.0 advertising.

What does this mean to you? Well as before you needed a well rounded marketing plan to be on top of your business and that included paper and ink. Well now you don’t need as much hard copy and you need to deliver your message virally.

If you know how to do this you have the advantage of the slight edge which will let you survive in the “New Economy”. Ignore these principles and you will go by the wayside.

So, it’s your choice! Join us at the Oakland County Chapter of Glazer-Kennedy Insider’s Circle and see what a New Economy Marketing Plan looks like. We will give you two complete campaigns, one small, one large that you can implement in your business immediately. Hint, neither one contains Detroit Freepress advertising!

So, see you there on January 28th at the Marriot Residence Inn, 2600 Livernois Rd., Troy at 6:30pm. We will provide dinner, beverage and dessert. Your first meeting is FREE!

See you there!

Think and Grow Rich

Here it is Saturday night and I am still thinking about this months meeting we had last Wednesday evening. Napoleon Hill was with us in that meeting in spirit.

We experienced his observations that all of the successful entrepreneurs he studied had one thing in common, they all had a mastermind group. Well we had a Hot Seat session at our meeting that turned into a great mastermind experience. Our Charter member, Dave Miller, got an absolute boatload of great ideas to enhance his automotive delivery software business.

On top of that, I spoke with him this morning and he has secured a joint venture with another software company to distribute his software. All from one Oakland County GKIC Chapter meeting.

If that wasn't enough content for one meeting, we had an extraordinary guest speaker, Lisa Lapides Sawicki. She bowled them over with her expertese and ideas on how to get publicity. Mainly on how to develop your angle and get your press release published. She is truly a professional. www.lapidespublicity.com

The cat is out of the bag! We have been working on a major enhancement to the Oakland County Chapter of Glazer-Kennedy Indider's Circle and we let it slip last Wednesday. The finished product will be unveiled at the December 17th meeting so don't miss that live event.

Keep in touch and please keep Marketing!

The Marketer of Marketing
Pete Swartz
www.oaklandcounty-gkic.com
989-312-1140

The New Economy

What are you going to do with your marketing plan as the New Economy unfolds?
Well as I see it, when everyone is pulling in their horns and slashing the marketing budget, you should be strategically target marketing to swoop in and coral their customers.
The method of choice for such a smooth move is direct response marketing. By strategic I mean calculated spending of marketing dollars so you know your ROI for each campaign.
You should use multiple medias and repeat your message on each one. The target customer is determined by segmenting your existing customer base and marketing to more of the same.
You need to grasp the concept of working on your business more and in your business less. Marketing is the real business you're in not what your shingle states.
To learn more about these strategies and how to implement them, you should join us at our local marketing meeting, October 22nd at the Courtyard Inn, 1525 E. Maple, Troy, MI at 6:30pm. Come check us out, it's free for first timer's and we'll even feed you.
Register now at www.oaklandcounty-gkic.com or call me direct at 989-312-1140.

The Marketer of Marketing
Pete Swartz

The Most Incredible Free Gift Ever..!