Altoids Case
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1 Media Flight Plan: Altoids Case Like a mint? One observer wrote, if someone offers you a breath mint, accept it! We rarely give much thought about why we artificially change our mouth and body odors; the history is fascinating. More than one critic has warned that modern human life is bleached, sanitized and artificially controlled, all thanks to a ubiquitous consumer culture. They study us microscopically; they Google‐spy on every body odor and burp. They frighten us with every breath we take from birth to death. They shame us into worrying about every human body function, every human smell, and every human malady from bad breath to foot fungus. We’re even scolded because our puppy has “doggy breath.” Some critics of modern life suggest we are obsessed with personal hygiene. As willing participants in the consumer culture, we happily brush our teeth, floss, shower morning and night, and repeat daily. Seems reasonable. Or not? Should we adopt Steve Jobs’ hippie‐inspired, all organic, more progressive lifestyle? He called himself a “fruitarian” and reasoned that his commitment to vegan diets kept his breath and body sweeter than anyone around him. Not surprisingly, Jobs biographer, Walter Isaacson, reported that coworkers thought Jobs was “very, very wrong.” There’s a popular story about Napoleon and Josephine. He was obsessed with Josephine, a sex goddess versed in every art of love. Historian Kate Williams wrote that Napoleon bombarded her with love letters, once writing that he was, ‘desperate for her body.’ He further lamented, ‘Your image gives me no rest . .’ Perhaps most famously, returning from a campaign, he also wrote, ‘I am coming home. Don’t wash.’ Although we may find lack of hygiene abhorrent, the dilemma was not uncommon for the time. Driven by a culture of hyper‐hygiene, marketers remind us daily of our inadequacies. The © 2016 Deercreek Publishing 2 growing popularity and acceptance of breath and body enhancing potions and candies is clear evidence that modern civilization chooses illusion over harsh reality. However, evolution is both social and biological. Since the fourteenth and fifteenth centuries, breath sweeteners, perfumes, and scented herbs were popularized in Europe. Appealing to social fears, marketers have sold countless trillions in breath mints, perfumes, scented soaps, colognes, toothpastes, breath sweetening gums, and mouth rinses. Most all appeal to our desire to attract the opposite sex. Despite their eccentric nature, history suggests Napoleon, Josephine and Jobs represent the outliers. The vast majority of us prefer illusion, so we can “kiss your seemingly honey‐lips.” (Maeisha Durand, Author) Few know the Altoids brand is now 100 years old. Another aging brand, American Chicle, later rocked the confectionary category in the 1950s with a technological breakthrough. By injecting a substance called gluconate with special oils, Certs changed the rules. Marketers cleverly labeled Certs’ secret ingredient “Retsyn,” and took the market by storm, ‘making your breath as sweet as your smile’, ensuring that if ‘she kissed you once, she’ll kiss you again’. For the first time, long lasting oral freshness was combined with portability. Despite Altoids being developed long before Certs, marketing and advertising genius gave Certs a remarkable jump start. The Certs campaign launched a whole new category of personal products. Today, sales of breath mints and gums are in the hundreds of millions. Some of the most popular contemporary brands of breath freshening mints include Tic Tacs, Ice Breakers, Altoids, Life Savers, Certs, and BreathSavers. Altoids Mints Parent Company . the Wm. Wrigley Jr. Corp, purchased in 2008 by confectionery giant Mars for $23 billion. Last year, Wrigley’s annual U.S. revenue exceeded $600 million. Sales in China alone; $1.2 billion. The Wrigley division has operations in more than 50 countries worldwide and sells its products in about 180 countries. Wrigley chews up the competition as the world's #1 maker of chewing gum. Wrigley brands include: Extra, Orbit’s 5 brands, Altoids, Doublemint, Juicy Fruit, Life Savers, Skittles, Spearmint and Starburst. Altoids, Juicy Fruit, Spearmint and Doublemint have all been around for more than 100 years. © 2016 Deercreek Publishing 3 Challenges: Altoids in a Crowded Category There are well over 20 brands of breath mints or breath candies. If we include breath enhancing gums as competition, we have to more than double that. With so much competition, Altoids’ long history yields a bonus with above average brand awareness. Among teens and adults (18‐45), Altoids enjoys an estimated 35% brand awareness, but there’s a problem. Competitors like Ice Breakers are aggressively pursuing the younger segment of the market, with sales skewing significantly higher among younger adults 18‐24 and 18‐34 compared with Altoids’ more aged presence. Primary marketing objective: Brand Revival Recent sale figures for Altoids are eroding. In the past year, category sales totaled approximately $658 Million, with Altoids taking third place in sales at around $97 Million. Altoids is in danger of falling further behind as ad spend has been sporadic over the past few Altoids Ad Spend $(MM) 16 13.8 12 8 7.2 4 0 0.0 0.0 2012 2013 2014 2015 Est Source: Kantar Media Intelligence years: © 2016 Deercreek Publishing 4 Based on historical analysis of competitive data, Altoids has been outspent by top competitors. For example, Ice Breakers, the number two brand, is clearly attempting to make a move in the category. Their spending over the past few years has been in the $30‐50 MM per‐year range, far exceeding Altoids’ spend. Altoids brand manager has promised parent company, Wm. Wrigley Jr., to infuse new life in the brand and aggressively pursue their closest sales competitor, Ice Breakers. To make a noticeable gain against Ice Breakers and all the other competitors, he has proposed a major test. He wants to increase Altoids ad spending to $25 million for the coming calendar year. Marketing/Media Planning Challenge With a goal of increasing sales by 20 percent next year, Altoids marketing director is taking a big risk by doubling advertising expenditure highs, and betting he can earn it back in two years. He is aware of the extraordinary challenges in a market crowded with well‐known brands. In crafting a marketing mix, he knows that Altoids brand must perfect their niche marketing and positioning strategy to compete with well‐known competitors, all capable of continuing to steal market share from Altoids. With a doubling of ad expenditures, sales increases must come out of the hide of competent competitors. Rather than the classic four P’s, Altoids view of the marketing problem fits better with Robert Lauterborn’s four Cs. Lauterborn’s model is a more consumer‐oriented version of the classic four Ps that recognizes how lesser‐known brands can gain on competition by emphasizing niche marketing. The niche philosophy is much more consumer focused, and puts far less emphasis on the old idea of mass marketing. Lauterborn’s Four “C’s” “C” Corresponding “P” Description Consumer Product Consumer wants and needs . A company will only sell what the wants and consumer specifically wants to buy. So, marketers should study needs consumer wants and needs in order to attract them one by one with something he/she wants to purchase. Cost Price Price is only a part of the total cost to satisfy a want or a need. The total cost will consider for example the cost of time in acquiring a © 2016 Deercreek Publishing 5 good or a service, a cost of conscience by consuming that or even a cost of guilt "for not treating the kids". It reflects the total cost of ownership. Many factors affect Cost, including but not limited to the customer's cost to change or implement the new product or service and the customer's cost for not selecting a competitor's product or service. Communication Promotion While promotion is "manipulative" and from the seller, communication is "cooperative" and from the buyer with the aim to create a dialogue with the potential customers based on their needs and lifestyles. It represents a broader focus. Communications can include social media, advertising, public relations, personal selling, and viral marketing. Convenience Place In the era of Internet, catalogs, credit cards and phones, people no longer need to go anyplace to satisfy a want or a need and are not limited to a few places to satisfy them. Marketers should learn how the target market prefers to buy, how to be there when they are ready to buy, and make the brand ubiquitous to guarantee convenience in buying. With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors. (Source:Wikipedia, “Marketing Mix”, Italics added) As with any marketing model, the key to success is discovering the proper balance for all components in the mix. Altoids’ marketing team is confident that they have nailed the ‘consumer wants and needs’ part of the equation. Altoids enjoys a unique consumer niche with its icy flavor, its unique size and shape, it’s improved, handy tin package, and its excellent graphics. Research shows Altoids also enjoys a reputation for premium quality among consumers, and they agree Altoids provides a generous serving, is uniquely packaged, and is one of the most effective as a breath‐enhancers among its competitors. Pitching the Business Your advertising agency has been retained by Wrigley company to write a marketing/media plan that will serve as a proposal for Altoids marketing team. Your $25 million media plan will be the primary factor in determining whether or not Altoids continues with capital injection.