Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus,americast.usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Tue, Sep 29 1992 Date: Tue, 29 Sep 92 04:35:07 EDT Message-ID: 09-29 0000 BONUS: Marketers are now pitching value USA TODAY Update Sept. 29, 1992 Source: USA TODAY:Gannett National Information Network Marketers have a new buzzword for the '90s, and it's spelled V-A-L-U-E. For more than a decade, marketers pitched everything from ice cream to autos as luxurious or extravagant or prestigious - or even expensive. But as the recession began, they began repackaging, repositioning and remarketing products to emphasize value. Now, value marketing - underscoring a product's virtues such as high quality, large quantity or durability while playing up its price - has gone from a groundswell to a tidal wave. WHAT DOES THIS MEAN TO MARKETERS? Much like family values, value marketing can mean many things to marketers. To some, value marketing means price cutting. To others, it means special deals, such as providing more of a product at the same price. And to others, it means a new image - one that convinces consumers they're receiving a good deal. No matter how nebulous value marketing may be, Madison Avenue seems intent on making it the prime message to consumers. WHAT CHANGES HAVE MARKETERS MADE? The upscale marketing tactics that dominated sales pitches in the '80s have virtually disappeared. Now, '80s pretentiousness is used as a foil. Note the magazine ad for Nissan's Maxima GXE: "Today, the idea of spending thousands more on a luxury sedan for the cachet of having a hood ornament appears hopelessly unjustified. No, these are the '90s, an era of renewed sensibility." HOW HAS THE ECONOMY PLAYED A PART? Marketers are discovering that the recession hasn't just curbed over indulgence. The sour economy has forged a new consumer competency - a new class of sophisticated, bargain-hunting shoppers who are careful of what, where and how they shop, says Brenda Rinholm of marketing consultants Kuczmarski & Associates. "It used to be fashionable to overindulge," says Rinholm. "Now it's fashionable to say you got a good deal." HOW ARE COMPANIES REVAMPING THEIR PITCHES? Mobil's Hefty division slashed prices as much as 20% and added 20% more plastic garbage bags per box. Hefty also trashed its 2-decade-old marketing effort centering on bag strength. The revamped motto: "Our new strength is value." Says Mobil's Bob Cauffman: "People are looking for value in the '90s, even in trash bags." WHAT ARE FAST-FOOD CHAINS DOING? McDonald's continues to push its Extra-Value meals, combinations of sandwiches, side orders and drinks that sell for less than the combined price of the individual items. Competitor Wendy's counters with a Super Value menu featuring 99-cent entrees and side orders. HOW ARE STOCK BROKERAGES REACTING? Stock-brokerage Shearson Lehman Hutton is abandoning its 2-year-old "You can get there from here" ad campaign. It's searching for a new agency to help it counter discount stock brokers by touting the advantages of full-service brokerages that charge higher fees. "The recession has changed things," says Shearson's Joe Plumeri, who says new ads will focus on services such as investment advice and financial planning. "People are asking, `Am I getting what I paid for, and is there value in it?' Companies are being challenged to delineate the value they offer vs. the price they charge." WHAT ABOUT STATUS ITEMS? Mercedes-Benz ads rarely used to mention price. But stung by a six-year slump in sales, Mercedes now prominently displays a $27,874 price in some print ads for its 400E. That price, however, is for a 36-month lease. The car's $56,150 suggested list price is buried in fine print. ARE AMERICAN CAR COMPANIES DOING THE SAME? Buick is pitching its top-of-the-line full-size Park Avenue as "America's best car value" at a suggested list price of $25,800. Buick's boast is backed by findings from IntelliChoice, an independent research firm that ranked the Park Avenue No. 1 on factors such as maintenance costs, fuel economy and depreciation. To underscore the point, one TV spot shows the Park Avenue next to an economy car. "Most people think it's a great value to own a small, inexpensive four-cylinder car," says Bob Burnside, Buick's national ad manager. "We're saying you don't have to buy that kind of car to get value for your dollar - you don't have to give up luxury, performance or size to get great value." WHAT'S A WAY TO CONVINCE SHOPPERS THEY'RE GETTING GOOD VALUE? Give them something for nothing. Or, in the case of Schering-Plough, maker of Coppertone suntan lotion, give them a 10-ounce bottle for the price of an 8-ounce bottle. Walk down any supermarket aisle and see how popular the strategy has become: Ultra Brite toothpaste offers 20% more free, Planter's Cheez Curls 20% more free, Mennen Super Speed Stick deodorant 25% more free and Glass Plus cleaner 45% more free. IS THIS A FRUITFUL TREND? The explosion of value marketing is good news for the handful of companies that have long emphasized their price-quality relationship. Personal-care giant Helene Curtis - whose No. 1 selling, 54-year-old Suave shampoo has always been pitched on value - will introduce a line of facial-care products next month. They'll be priced the same way as Suave shampoos, deodorants and lotions: 25% to 30% cheaper than their competitors. "People are searching for greater value in just about everything now - it's something that's here to stay," says marketing director Jon Achenbaum. WHO IS READY FOR THIS TREND? Not everyone is. Value marketing could backfire for companies that focus too closely on price and not enough on quality. A product's image could blur, as could profit margins. "Today, 75% of marketing efforts are on price promotion - the highest I've ever seen it," says consultant Al Reis of Trout & Reis. Says Allen McCusker of marketing consultant Canaan Parish: "Many marketers are cutting costs because they're more in a survival mode than a growth mode." DOES THIS TREND HAVE STAMINA? In the long run, the most effective value-marketing tactics may be those that strike a delicate balance between emphasizing high quality and low price and provide consumers with even greater incentives to buy. A prime example: Running-shoe maker Saucony. To avid runners, Saucony quality is a given. A recent review in Consumer Reports rated Saucony a best buy based on performance and price. Still, the tiny Bangor, Maine, firm - which has an annual marketing budget of $2 million, less than Nike spends on one celebrity endorsement contract - must compete in a cut throat industry ruled by fashion and fickle consumers. So Saucony developed its Extra Mile Club to reward repeat buyers with discounts, clothing and free shoes. HAS SAUCONY'S PROGRAM SUCCEEDED? The program has lured more than 12,500 customers. "It helps put consumers who are on the fence looking at other brands into a Saucony shoe, and it rewards them for staying loyal," says marketing chief Pat Hambrick. Bonus Editor: Kate Coughlin. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM