What's New in Marketing - Issue 63, November 2007

http://www.wnim.com

Food for Thought from the ASA

Eating is the new smoking - at least according to the headlines. Even the most lethargic coach potato would find it hard to miss the numerous warnings about the negative effects of bad diets and obesity on our health. As consumers struggle to wade their way through a myriad of healthy eating recipes and exercise plans, marketers are also facing a stricter regime.

Despite the current headlines, concern about the future health of the nation isn't new. In 2003, the Government Chief Medical Officer said action was needed to help and support people - particularly children - to reshape their diet. Of course, there are many causes for obesity, but in its White Paper 'Choosing Health' the Government asked the then TV advertising regulator, Ofcom, to look at the possibility of strengthening the rules on food advertising to children on television.

Following a long period of consultation, Ofcom announced new restrictions on the advertising of food and drink products to children on television. The Broadcast Committee of Advertising Practice (BCAP) finalised the content of the rules which are enforced by the Advertising Standards Authority (ASA). With a nutrient profiling scheme developed by the Food Standards Agency (FSA), and similar, but different rules for radio and non-broadcast food advertisements, food marketers must navigate their way through an increasingly complex multi-regulatory environment.

Nutrient profiling

The new rules for TV advertising make reference to foods that are high in fat, sugar or salt - otherwise known as HFSS - according to the nutrient profiling scheme published by the Food Standards Agency. Nutrient profiling works by awarding points for the amount of energy, saturated fat, sugar and sodium in a product. The total 'high points' score determines how the product can be advertised. Foodstuffs with an overall score of four or more points and drinks with an overall score of one or more points are classified as 'less healthy'.

This scheme is in itself controversial; with industry concern that that the nutrient profiling model has serious flaws. Critics claim that the scheme classifies many nutritious products commonly eaten by children as 'unhealthy', for example cheese, raisins and some breakfast cereals.

Audience Indexing

Under the new rules, advertisers with HFSS products cannot advertise those foods or drinks around programmes of 'particular appeal' to children. Broadcasters use audience indexing tools to determine whether an individual programme falls into this category. If the proportion of children watching a TV programme is 20% greater than the actual proportion of children in society, the programme is classified as of 'particular appeal' to children. While a programme such as Coronation Street may have a fairly high child audience, it is not necessarily deemed to be of particular appeal to children.

Advertising Content

HFSS adverts can still be targeted at children, but not around programmes with particular appeal and new content rules apply to all such adverts. These rules include the requirement that no promotional offers, licensed characters or celebrities popular with children can be used in adverts for HFSS foods targeted directly at pre-school or primary school children and that no health or nutritional claims can be made.

Non-broadcast advertising

While concern about TV advertising has always been paramount, because of the perceived effectiveness of TV in comparison with other forms of promotion, new rules also apply to other advertising formats. Intended to have the same effect as the TV rules, the restrictions on non-broadcast advertising reflect the differences in the media to which they apply. Thus, rules for advertising in non-broadcast media apply to all food and drink products except for fresh fruit and vegetables and don't require advertisers to self-certificate their products under the nutrient profiling scheme. The content rules are similar to those for television adverts, and in summary, require that adverts should not:

• condone or encourage poor nutritional habits or an unhealthy lifestyle in children
• encourage excessive consumption of food or drink products
• use promotional offers in an irresponsible way
• use "high" pressure or "hard sell" techniques
• use licensed characters or celebrities popular with children if adverts are targeted directly at pre-school or primary school children
• give a misleading impression of the nutritional benefit of products.

Further bans?

If the headlines comparing eating with smoking are to be believed, could further advertising restrictions be on the way? Many brands are going further than the new rules require, and are promoting healthy eating messages and active lifestyles in their adverts. Yet press reports this summer carried calls from campaign groups for further restrictions on food adverts.

The Government, Ofcom and BCAP have all signalled their intention to review the effect of the changes to the rules and the FSA will review the nutrient profiling model next year. Meanwhile, the Advertising Standards Authority has yet to rule on an advertisement that has appeared since the new rules came into force. When it comes, that first ruling will provide advertisers with an indication of where the boundaries of acceptability lie for future adverts. The impact of the new slimmed-down advertising regime has yet to be fully digested.

About the author: Claire Forbes is Director of Communications at The Advertising Standards Authority

Communicating a 'healthy' message

If you have a product with a real health benefit, what is the best way of getting this message across? It is clear that consumers are looking out for healthier products, but it is much less clear what they want in terms of information and communication.

The situation is complicated by the increasing amount of 'background noise' - GDA, traffic lights and other standardised forms of health and nutrition information - which can make it harder for a clear, focused message to get across.

Much of the discussion around communicating a healthy message has been centred around health claims, particularly in the light of the new EU Regulation on Nutrition and Health Claims. The new regulation will create approved, standardised claims, which may help to increase consumer trust, and claims may become a more important element of communication than they have been. Manufacturers have of course up until now tended to be much more concerned than consumers about the exact wording of claims. But consumers are certainly interested in understanding the benefits of the product - what could be the outcome of consuming the product - and how this is framed will increasingly be influenced by the new regulation.

People 'decode' brand communication to extract messages that are relevant and interesting to them, and they take out messages about health in many different ways - often using aspects far beyond the nutritional information or the specific claim. For example, the look and feel of the packaging, the tone of voice of the copy, the imagery in the advertising, the transparency of the information provided. Some brands just 'look healthier' than others - and this factor may be a strong influence on people's perceptions and decisions. Innocent has succeeded in creating a brand that is perceived as extremely healthy, without making overt health the main communication platform. Even side by side with equally pure, natural juices and smoothies, it is usually considered to be 'healthier' because of its graphic style and down to earth tone of voice.

It's important to consider, therefore, what sort of 'look and feel' and tone of voice will be appropriate. What is right for a cholesterol-lowering yoghurt intended for people with a specific medical problem will be different from what is right for a natural wholegrain cereal for everyday use by all the family.

But there may be some general guidelines emerging that could help hone the specific health communication.

1. Communicate the benefit in a way that is relevant. For example, it may be better to say 'one of your five-a-day' rather than to give a long description of why antioxidants are important. It is often more important to make the benefit obvious than to explain exactly what the ingredients are.

2. It is increasingly important to support the health message by ensuring that the products are seen as natural, with 'real' ingredients, and do not contain ingredients believed to be unhealthy, such as artificial flavours and colours. Even products such as low fat chocolate mousse, where the low fat and good taste message has tended to over-ride all other considerations, will be scrutinized more and more. They will be expected to deliver against the more holistic view of health that is emerging strongly. Consumers are very wary of products that shout loudly about one health benefit, while failing to make it clear that there are some less attractive aspects of the product.

3. Use simple, clear language rather than vague and woolly terms. Straightforward information about the product and its benefits will be regarded as more trustworthy than 'weasel words' that imply rather than state. Introducing factual information on the back of the back in the form of 'did you know' or 'isn't it interesting' may be a much more acceptable way of getting across some scientific understanding than trying to present the product benefit in a too technical way.

4. When communicating a healthy product, it is of course usually vital that taste comes across strongly too. This is becoming true even in more specialist health areas such as allergy-free products, which have until now tended to look rather clinical and unappetising. With products that are natural or organic this is easier, as people are increasingly assuming that these taste better anyway. Referring to the provenance of the ingredients, the method of manufacture, the attention given to the recipe will certainly help to create expectations of good taste. But with products where the wholesome, nutritional image may tend to overpower positive taste associations, it is important that, both visually and in terms of language and tone of voice, the taste benefits are clear.

Increasingly, as health considerations become more and more important in our food choices, we may actually see health messages become less rather than more dominant, as consumers will come to expect these, and will learn to be expert de-coders of overt and more subtle messages. Messages about flavour, taste, convenience, local origin, and artisan manufacture may become the focus again, with health playing an essential but supporting role.

About the author: Dorothy MacKenzie is Chairman of Dragon

Chilly times: re-evaluating marketing in the frozen food industry

The food industry has had its ups and downs over the last few years. Food scares, press coverage about junk food and obesity, government initiatives, and changes in school meals, to name a few, have all lead consumers to re-evaluate what they feed their families. But of more importance to marketers, the challenges of recent years have highlighted that the offer of convenience alone no longer appeals to today's consumer as it has in the past. It is taste, health and quality that are now of paramount importance and food manufacturers have responded accordingly.

Until recently, there has been a slowdown in the frozen food market in general. This lull was a result of several factors, most notably the media's increasing obsession with food and the rising profile of the UK's obesity problem. Coupled with this has been a growing awareness among consumers of the provenance of their food. Frozen food manufacturers have faced the additional challenge of the consumer perception that frozen food is of lower quality, and less tasty than chilled food. And yet despite this, or arguably because of it, the industry has evolved more in the past three years than it ever has. The result has been some of the most groundbreaking food marketing campaigns of recent times.

Increased awareness of food issues has forced marketers to listen to the changing needs of consumers and keep on top of these demands as the market continues to evolve. And what is the consumer saying to the industry? They demand an honesty and quality from food manufacturers which marketers have previously been able to overlook in favour of bigger, brighter, shinier campaigns.

But dialogue is one thing, business is another. The real job of a brand leader is to build the market, and to grow the market. While positive steps have been made by food manufacturers to communicate with consumers about what exactly they are buying, there is still some debate as to where the responsibility for healthy food lies. The British media often places responsibility for what the public choose to consume in the hands of food manufacturers. On the other hand, there is a general feeling from some areas of the political arena, and indeed some food manufacturers, that the onus should be on consumers to work it out for themselves.

McCain have adopted a holistic approach across the whole company. The 'It's All Good' philosophy shows that positive changes are taking place in all areas of the business. On the factory floor, changes have been made to ensure products are prepared using with 100% sunflower oil, investment has gone into 'greener' double-decker lorries thereby reducing the number of deliveries, and three wind turbines have been installed to power the largest chip factory in the UK. From a marketing perspective McCain developed the 'It's all Good' campaign, central to which is re-educating consumers. This reflected the company's philosophy that it needed to proactively reassure consumers that McCain products are real food, simply prepared.

But how did this movement affect the wider industry? A key part of the debate became clear labelling of nutritional values, and guideline daily amounts of those nutrients, on products. Customers demanded more information, marketers listened and responded.

As we emerge from this period of turbulence, changes in the frozen food category in particular have paved the way for more premium meal solutions to be developed and a new kind of marketing to preside. Innovation and product development in the food industry has meant marketers can offer a combination of taste, health and convenience, and value has been added back into the market through clear communication, quality of products and new product development.

And there's still so much more to be done. There are great opportunities for the frozen food market as people with busy lives look for increasingly convenient solutions, making McCain a destination category. The solution for frozen food marketers is not to ignore the changes that continue to take place in the industry, but to listen to customers and respond to the challenge.

About the author: Simon Eyles is Marketing Director of McCain Foods

Food moves up-market

While once own label ranges were perceived as the poor relative of branded products, today they are giving brands a real run for their money, offering a wide range of upmarket products that make the most of key consumer trends and desires.

The current decade has witnessed the ongoing development of a number of private label premium ranges in the food and drink market. Indeed, the likes of Tesco's 'Finest', Sainsbury's 'Taste the Difference' and Asda's 'Extra Special', are now very much part of the mainstream in the UK.

These ranges have expanded overall own label share by attracting new consumers who were previously wedded to brands and were not attracted by earlier low price and lower quality alternatives. In fact, Tesco Finest is bought by over half of its customers, while Sainsbury's 2006 annual report indicates that 50% of customers buy from both the premium Taste the Difference range and its Basics economy range.

This focus on a more up-market offering is very much on trend. Latest research from Mintel finds that in the UK three times as many consumers buy more premium and luxury food than two years ago. And whilst half of consumers' purchasing behaviour has remained the same, over a third have 'traded' up and consumers are twice as likely to say that they buy more premium foods than more economy foods.

When it comes to differentiating these premium products from standard private label offerings, the retailers focus on a few key tactics, emphasising evocative product descriptions, fine ingredients and upmarket packaging.

Descriptions help to differentiate

Language plays an important role in differentiating premium lines from standard own label products. Packaging language is concerned with enrichment, pleasure, and the care taken in sourcing special ingredients. For example, Sainsbury's Taste the Difference uses elaborate descriptions to help enhance the value of various prepared foods. Its Mussels Gratin introduced in January is made with plump rope-grown mussels, while the new Taste the Difference Roasted Celeriac and Maris Piper Mash is enriched with Cornish butter, and seasoned with sea salt and cracked black pepper.

Descriptions of premium private label ranges also often suggest that products are in some way artisanal rather than mass produced, with products often described as "hand made", "hand finished" and "hand cooked".

Luxury ingredients and provenance

As well as language, sourcing of ingredients and provenance are other key elements in helping retailers differentiate their premium offerings. In the UK more and more consumers are looking to find out as much about where their food comes from as possible. For example, Sainsbury's Taste the Difference Tomato and Chorizo Pasta Sauce introduced in February is made with Italian red wine, Taggiasca olives and chorizo Pamplona. Beyond that many retailers are now actually naming the farmers and producers they use as well as where the products originate from.

An obvious way to upgrade a dish is of course to use luxury ingredients that you would not necessarily find in the standard ranges. The Marks & Spencer Connoisseur range was widened in time for the last Christmas season with Canadian Snow Crab Claws, caught traditionally in pots in the cold, deep, North West Atlantic. Other lines in this range use ingredients such as lobster, langoustine and salmon.

Combining premium with ethical

And no range would be complete without taking into account the UK's rising interest in all things ethical. Ethical food and drink, such as Fairtrade products, organically grown fruit and veg, free range chickens or quality-assured meat often command higher prices in their own right. As such combining premium with ethical considerations is another selling point of some ranges. A more natural approach to food is also often used to differentiate the ranges, with artificial preservatives, flavourings and colourings often kept to a minimum.

Multiple retailers like Tesco and Sainsbury have been active with their own Fairtrade and organic ranges, with these distinct offerings already commanding a substantial premium. Nevertheless, Tesco combined Finest with Fairtrade in April 2007 with the introduction of a new chocolate assortment using milk, dark and white Fairtrade Belgian chocolate.

Packaging

A key factor in creating that premium feel is packaging. Packaging is very important for premium private label ranges, particularly in selling products where there is less scope for differentiation such as dry pasta and canned foods.

One common element of premium private label ranges is the prevalence of silver and gold in product packaging, with purple another colour widely used. The importance of a uniform livery in differentiating numerous cross-category premium lines from economy and mid-price offerings has been recognised by retailers, and use of these colours, which are associated with high value is now widespread.

Tesco uses a distinct black and silver livery for the Tesco Finest range, and similar packaging has been adopted by other retailers. UK multiple Morrison's offers The Best products in a black and silver livery accompanied by stylish product photos.

But the current backlash against excess packaging does not bode well for these ranges, where high quality packaging is a key part of the mix. Retailers may well look to simplify premium private label packaging; relying more on the genuinely premium nature of the product, rather than what it comes in, could enhance the range's reputation in the eyes of the consumer.

Looking to the future, the historic emphasis on low price for private labels is set to continue to become less important. Companies like Marks & Spencer helped set new benchmarks for private label quality and lessened the linkage in the consumer's mind between private label and low cost/no frills products. Mass market retailers have been quick to exploit the potential afforded by added value private label lines; and their drive forward shows little sign of abating.

About the author: Carla Ogeia is GNPD Consultant at research company Mintel

Survey reveals that networking leads the way in digital age

The latest Marketing Trends Survey from The Chartered Institute of Marketing reveals a clear split between the up-take of digital tools that have a networking element and other digital marketing activities. Over half of the professional marketers taking part in the survey (55%) say that their organisations use business networking regularly*, while over a third (37%) claim to be regular social networkers.

In comparison, just 8% use viral marketing at least 'a fair amount', 7% use corporate blogs and product seeding, while podcasts and mobile marketing have been adopted by just 6%. These figures are broadly unchanged from the last survey conducted in the spring.

However, when it comes to their personal use, some of these digital communications are slightly more popular. While nearly half (49%) of marketers say they personally are regular* social networkers, 11% say they are regular bloggers, and 10% of marketers regularly use podcasts.

Online education is also regarded as useful by around two-thirds (63%) of marketers as it allows them to study at their own pace. Yet views are mixed as to whether the move towards online media means that marketers without online skills have little to offer the profession. While just over a third (35%) agreed with this statement, a not dissimilar 39% believe the opposite. 

Completed for The Institute by Ipsos MORI the survey also finds that marketers are feeling less optimistic about the future of the economy than this time last year. The number of those who feel that the economy will get worse in the next year has risen from 21% to 40%. There has also been a corresponding decline in positive opinion, and the percentage of those who believe that things will get better has fallen substantially from 26% to 14%. 

"Social marketing is clearly becoming very popular but our survey suggests that marketers remain cautious about using other forms of digital marketing, possibly reflecting their concern over the economy and, as a result, their marketing budgets," said David Thorp, director of research and information at The Chartered Institute of Marketing.

"Companies that continue to invest at sensible levels in marketing will be those that will thrive in all economic climates. Similarly, marketing professionals who have kept their skills up to date, particularly in the digital arena, will be the best placed to manage campaigns that will continue to deliver solid commercial results."

* Regular - those answering 'a great deal' or 'a fair amount'

• Source: The Chartered Institute of Marketing's Marketing Trends Survey Autumn 2007, conducted by Ipsos MORI.
• A total of 1,127 marketing professionals completed the online questionnaire which was hosted by the independent market research organisation, Ipsos MORI, between 3 and 25 September 2007. A broad cross section of organisations by sector, turnover and geographic location was achieved.
• A copy of the "key findings" document and supporting photographs are available on request.

The pay off from packaging

In 2000, Ian Ding and Paul Newberry set out to develop a fruit product that children would enjoy eating and would also encourage them to eat more healthily. Stream Foods was formed and the brand Fruit Bowl was developed as a label for the company's high fruit content snacks.

Long before the school dinner crisis was highlighted in the media, Ian and Paul, being parents themselves, recognised that there was a gap in the market to create a fruit brand. Credibility was key, as the brand had to be something that kids would choose. Good marketing was crucial to the success.

Ian explained: "We started Stream Foods without the financial backing of banks or financial institutions, as they could not see the possibilities of the brand. But it was our dream and so we re-mortgaged our homes and accepted help from friends and colleagues, because we were confident of success."

School Bars was the first extruded fruit product on the market. Because it was different, educating consumers was essential. It was important for the brand to communicate the health message clearly to parents, and to highlight that it help ensure their offspring reach that all-important five a day target.

Packaging proves fruitful

With all the money invested in research, development, producing and launching the products, Stream Foods was left with no budget for marketing and advertising.

Packaging was crucial as it was Ian and Paul's only tool to convey the brand values to the retailers and consumers. The initial design of School Bars was developed by a London agency that produced a simple design with strong fruit values. But when Watt Gilchrist's design company, Watt Design was appointed in 2002, they evolved the brand.

Some 'love' was added in the form of a heart shaped control-field, more refined typography alongside a more photo realistic illustration that really defines the products detail. The physical packaging remained essentially the same - a box containing five foil wrapped bars, one for each school day.

When new lines are integrated into the range, it is important that products stay true to the brand philosophy as this essential always stays the same - high fruit values, immediate communication and consistency within its own portfolio. New products introduced into the Fruit Bowl branding such as Fruit Wraps and Drenchers keep to the same basic principles of communication, featuring the brand logo, flavour variant and product information.

Simple standout at point-of-purchase is key whilst selling the values of a healthy snacking alternative. To date, Watt Design has supported Stream Foods creating strong branding for all products, naming new lines and designing distinctive packaging. With still no budget for other marketing activities, the brand is heavily reliant on its image, and packaging must be the differentiation for Stream Foods.

Stream Foods has created a strong and growing brand on the strength of the product itself. With the help of a clear brand image that is well packaged, its founders, as well as major retailers, believe that it is a profitable brand. This demonstrates how, with little marketing spend, you can utilise the assets you have to maximise the potential of a product and create strong consumer demand.

About the author: Cliff Owen is Creative Director of Watt Design

Marketer of the Month

Faye Peters, Market Research Manager at travel food and beverage operator SSP's UK airport division, has recently been awarded a Chartered Institute of Marketing Professional Postgraduate Diploma in Marketing. Faye talks careers, confidence and going back to school.

I've been working at SSP Air UK as Market Research Manager for nine months. As a newly created role I've enjoyed being directly involved in the evolution of the position.

SSP UK Air operates 160 catering units across 21 UK airports, including well known brands such as Burger King, Pizza Hut, Yates's, Caffe Ritazza and Upper Crust. My main ongoing project is a customer satisfaction initiative that has been rolled out to all SSP's UK airport outlets called Driving Service. It's been a great project to be involved with and no two days are the same.

Prior to joining SSP, I completed a marketing degree at Lancaster uni and spent a year in a work placement at McDonald's. Upon graduation, I relocated to Manchester and spent 18 months working as a Marketing Executive at business printing company, Printing.com and the next 12 months at British Red Cross Commercial Training, again in a Marketing Executive role. At this point I was ready for a new challenge and decided that I would look to specialise in market research.

I started the postgraduate professional diploma in my first role after leaving uni. After having a year off studying I was ready for a new challenge and the diploma was the next step for me. Because I did a marketing degree I was exempt from the first three levels so went straight in at postgraduate level. Although saying all that, getting back into the studying frame of mind was still a challenge!

I found the content of the diploma quite broad in that it covered all aspects of marketing at a more strategic level. So it's great to gain a good understanding of how all parts of business and marketing link together. It highlights the importance of marketing information systems and how crucial it is for organisations to become market orientated with good quality data. I think this was definitely the most relevant aspect of the course for me in my current role and was a theme that ran through all four modules.

I took the course over a year at Salford University and attended night classes once a week. We studied two modules at once and sat exams at the end of each term. At first I was worried and a bit intimidated that the course would be full of marketing professionals with years of experience. However there was a real mix and lots of students my age who had been sponsored by their employers to complete the course.

I know there are a number of ways you can study for the diploma. I personally enjoyed this method of learning as it involved a lot of group work and discussions where students shared their own experiences. It expanded upon issues I had studied at university and made my learning more relevant as I was able to see how they related to the real working world. It also became a weekly social event!

I believe that adding the diploma bow to my arrow will have only a positive impact my future career. I have gained a holistic understanding of the marketing arena and this has shown me that I can apply myself to study as well as holding down a demanding a full time position. My extra knowledge has provided me with a greater confidence and look forward to putting the theory into practice.

I think The Chartered Institute of Marketing courses are a great idea for anyone working in marketing. It keeps your knowledge fresh in an ever-changing profession. I certainly found the content of the course I did relevant, challenging and worthwhile. I have now decided to pursue a qualification with the Market Research Society, where I hope to expand my current research knowledge and develop in my role. I'm hoping the hours will count towards the chartered CPD programme where I can work towards becoming a chartered marketer.

At the time when you're studying it seems like a never ending cycle of reading, revision and exams. But it's definitely worth it when you pass the exams - and it looks great on the CV.