New owner of Pringles needs to bring brand into 21st century

By Bruce Horovitz, USA Today

April 5th, 2011

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Pringles is broken, but fixable.

That’s the consensus of brand gurus and marketing experts, who say the brand sold by Procter & Gamble to Diamond Foods for $1.5 billion on Tuesday, needs a complete image overhaul.

“You can be polite and call it a classic brand, but the consumer sees Pringles as being old,” says Robert Passikoff, founder of the Brand Keys consulting firm. The company’s brand index gathered from consumer surveys finds that consumer perception of Pringles has been flat for five years. But the image of Kettle chips, owned by Diamond Foods, has been fastest-improving in the chip category. So has Kettle’s sales.

Since Diamond acquired Kettle potato chips in 2010, the brand has posted double-digit sales growth. Pringles, which is a $1 billion-plus brand, saw its sales slide slightly in the past 52 weeks, reports SymphonyIRI Group. Now, with the Pringles purchase, Diamond virtually triples the size of its snack business.

Snacking is huge. It’s a multibillion-dollar category, and major foodmakers and big restaurant chains all are clamoring for any piece of it. It’s why McDonald’s Snack Wraps are so successful, and why Starbucks and Dunkin’ Donuts just rolled out new snacks.

For P&G, the sale is about exiting the food business and focusing on home-cleaning and personal-beauty products. But for Diamond, it’s all about swallowing more snacks.

Consumption of salty and savory snacks ranks among the top 10 fastest-growing food trends and will increase by 16% by 2018, research specialist NPD Group projects.

But change won’t come easily for the 45-year-old brand, originally created for — but never used by — the U.S. Army. P&G has managed the brand in “a very traditional way” despite the fact that the perfectly shaped chips in a canister are a very non-traditional snack food, says brand consultant Martin Lindstrom. Now, he says, Diamond Foods needs to think way outside the canister. Some suggestions:

•Think entertainment. Pringles, which folks buy for fun, should integrate “fun,” youth-targeted computer games into its packaging design, says Lindstrom.

•Fix the recipe. “They need to come clean about what Pringles are made from — or fix the ingredients,” says brand consultant Jonathan Salem Baskin. “This stuff isn’t even potatoes.”

Actually, it’s about 42% dried potatoes that’s cooked from baked dough — not from potato slices.

•Add functional benefits. While it would be dumb to claim that Pringles are good for you, the new owners should consider adding positive “functional” benefits that, perhaps, give more energy, says Lindstrom.

•Tweak social media. While Pringles has a Facebook page and Twitter account, it needs to up the social ante, Passikoff says. “It needs to really resonate on a social platform.”

•Extend the brand. Slap chocolate coating on them. Squirt cheese filling between them. Maybe even sweeten them up into a cookie line, says Lindstrom.

•Update the marketing. Diamond needs to find more “emotional” ways to position the brand, says Passikoff. “They need to look at the category and the competition and understand there are big changes in how young consumers snack.”

•Improve the texture. Everyone knows what a Pringles chip feels like in the mouth, Lindstrom says. Diamond should offer alternatives with more snap.

•Kill the character. The familiar mustache man on Pringles cans must be replaced, perhaps via a social media vote, Lindstrom suggests.

Digital strategies influence consumer spending

Wednesday, 30 March 2011, 11:42

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A digital marketing approach and its associated channels are critical for overcoming the declining effectiveness of mass marketing, according to Gartner.

Although marketers have been using digital channels as part of their campaign management strategies for more than 10 years, most are using them for traditional push, mass-marketed, interruption-type execution of campaigns rather than a two-way engagement approach.

"Mass marketing is no longer a long-term strategy. Mass-marketing campaigns have a 2% response rate and are on the decline, whereas by 2015, digital strategies, such as social and mobile marketing, will influence at least 80% of consumers' discretionary spending," says Adam Sarner, research director at Gartner. "Marketers still need to shift their traditional campaign management strategy around executing campaigns to a customer and move toward a digital marketing, two-way engagement approach."

Gartner analysts say that this evolving customer-focused strategy harnesses digital techniques and channels that will increase engagement, response and conversion rates.

"The internet was built on the idea of users collaborating. Once the internet was commercialised, collaboration was overshadowed by transactional commerce and push-type marketing techniques that focused on one-directional hard sells," says Sarner. "Today, activity on the internet has shifted back to its roots in interaction and participation.
"The hard sell isn't working in this new environment, and successful campaign management strategies have shifted from interruptive push, toward two-way conversations and addressing mutually beneficial approaches to customers' wants and needs, which a digital marketing approach can provide."

The online environment continues to expand, and marketing organisations have more opportunities to be effective. By 2014, 6,7-billion devices will be connected to the Internet. Mobile marketing in the US reached $877,2-million in 2010, up 138% from the $368-million spent in 2009. The developing social CRM application market reached $600-million in 2010, and it is expected to reach $1-billion by 2013.

"For marketers and campaign management to use digital channels effectively, these channels can't be just a port for traditional campaign methods," says Sarner. "Although most marketers are using more than one digital channel, their approach is often no different from a spam model, where success is driven by high volumes and attempting to make a profit from nearly everyone who accepts the offer. Just using digital channels is not the answer."
Gartner's operational definition of digital marketing includes addressable branding/advertising, contextual, marketing, social marketing and transactional marketing. Digital marketing extends the marketing process through channels such as the Web, e-mail, video, mobile applications and social applications, point-of-sale terminals, interactive television, digital signage and kiosks.

"Digital marketing represents a shift in strategy and approach, not just in channels," says Sarner. "Although traditional campaign management thinking involves executing campaigns directly to the customer, successful digital marketing must act more as a mutually beneficial journey aimed at satisfying customers' wants and needs. This is a customer-focused strategy approach that will profoundly shift traditional campaign management strategy."

However, Sarner insists that campaign management and digital marketing do need each other. Although digital marketing represents an opportunity for two-way engagement, digital channels, access to a customer view and precise attribution metrics, campaign management represents multiple processes and channels, online and offline integration, and a complete customer record. Going forward, marketers will need to consider campaign management as a way to orchestrate the complexity of a complete online and offline marketing strategy, while incorporating the evolving customer approach of digital marketing.