Cassies 2009 Cases. Brand/Case: President s Choice. Winner: Retail Silver. Client Credits: Loblaw Companies Ltd.

Transcription

1 Cassies 2009 Cases Brand/Case: President s Choice Winner: Retail Silver Client Credits: Loblaw Companies Ltd. Galen Weston, Chairman, Loblaw Companies Ltd. Craig Hutchison, Senior Vice President Marketing Guylaine Lessard, Senior Director Marketing Agency Credits: Bensimon Byrne Jack Bensimon, President Peter Byrne (retired - former Chief Creative Officer) David Rosenberg, Senior Vice President, Creative Director Kathy Byrne, Senior Producer & Co-Director Janice Boduch, VP Group Account Director Charlotte Osborne, Account Director Crossover Notes: All winning cases contain lessons that cross over from one case to another. David Rutherford has been identifying these as Crossover Notes since Cassies1997. The full set for Cassies 2009 can be downloaded from the Case Library section at Crossover Note 2. Crossover Note 9. Crossover Note 10. Crossover Note 16. Brand Truths. Turnarounds. Conventional Wisdom should it be challenged? When a campaign stumbles. To see creative, go to the Case Library Index and click on the additional links beside the case.

2 2 EXECUTIVE SUMMARY Business Results Period (Consecutive Months): Jan Dec 08, and Jan May 09 (17 months in total) Start of Advertising/Communication Effort: July 1, 2007 Base Period for Comparison: Jan - Dec 07, and Jan - May 08 a) Synopsis of Case The case of Loblaw and President s Choice is one of a huge Canadian retailer in the midst of one of the greatest turnarounds in Canadian retail history. For years, Loblaw dominated the grocery category. But by 2005 it had lost momentum and was struggling. This case will explain how Loblaw was able to use one of its own brands, President s Choice, to restore a Canadian institution to profitability. Crossover Note 9. The advertising features a spokesperson who just happens to be the chairman of the corporation and the grandson of the founder. Debate may rage within creative circles as to whether it constitutes award-winning creativity in advertising. But in the real world, where consumers vote with their wallets, the creativity is proven and the outcome is unmistakable: it was advertising featuring Galen Weston that brought customers back to the President s Choice brand and to the only stores that sell it. To witness a turnaround on this scale in such a short time (in the midst of a profound global recession, no less) confirms that huge rewards come from taking huge risks. Isn t that the definition of a Canadian Advertising Success Story? b) Summary of Business Results o MorepeopleareshoppingatLoblawbanners.SincethedebutoftheGalenTV campaign,therehasbeena12 pointincreaseinthepercentageofpeople shoppingloblawcompaniesstoresastheirprimarystore(from31%injune07 to43%injune09). o Sales of President s Choice were up 12.4% in CY 2008 and another 9.3% for 2009 YTD. This represents hundreds of millions of dollars. o More people are buying President s Choice more often. Regular purchasers increased from 41% in 07 to 51% in 09. o Net Loblaw earnings went from a loss of $219 million in 2006 to a gain of $545 million in SITUATION ANALYSIS a) Overall Assessment Twenty-five years ago the grocery landscape in Canada was very different. National brands held the balance of power in the retailer/supplier relationship, and retailers worked to squeeze tiny margins from the same brands that their competitors sold. As a result, the grocery retail environment was an entirely level playing field.

3 3 In an attempt to increase margins, Loblaw Companies began to experiment with private label. While consumers were not immediately drawn to the stores in search of these brands, over time they proved to be a win/win higher margins for Loblaw, great products that cost less than national brands for the consumer. Moreover, Loblaw was celebrated for learning how to flex its retail muscle to launch and grow its own brands by controlling the shelf space. President s Choice was an offspring of this approach. Launched 25 years ago, it introduced consumers to new tastes from around the world and, over time, became Canada s largest brand. It was rooted in both food and innovation and launched hundreds of new taste experiences every year growing to over 5000 food items. Eventually, the need for growth led to expansion beyond food into financial services (President s Choice Financial), mobile phone service, insurance, home products (kitchen, bed, bath, décor items), and even beer. At the same time, competitive private label brands re-focused their efforts on their food lines, improving their offerings significantly, and encroaching on PC s original territory. Additional pressure came from the rapid expansion of Wal-Mart (300+ stores) with 48 Supercentres offering a full grocery store. It is difficult to identify when Loblaw and President s Choice began to lose momentum. In 2003, research indicated that consumers were to some degree living in the past recalling positive memories and experiences of President s Choice in what they viewed as its heyday. Crossover Note 16. Loblaw share price fell. The severity of the problem became most apparent, however, in 2006, when Loblaw reported its first annual loss in 19 years. b) Resulting Business Objectives Facing a falling share price, new management was brought in to rebuild Loblaw, and restore President s Choice to its former glory. The immediate marketing priority was to re-establish momentum behind President s Choice in order to drive traffic to stores and reverse the sagging value of Loblaw Companies. c) Budget Range/Share of Voice Annual Media Budget: Over $5 million, National (E&F)

4 4 STRATEGY & INSIGHT a) Analysis & Insight One of the challenges facing the new management was the fact that despite its being Canada s largest grocer, Loblaw Companies lacked a common national storefront on which to focus marketing and communication dollars. In fact, the stores were spread out between 21 retail banners (Loblaws, Real Canadian Superstore, Fortinos, Zehrs, No Frills, Maxi, Provigo, to name a few). While consolidating into a few common banners was attractive in theory, it was not practical from a timing, infrastructure and financial point of view. The plan had to use what existed. Further, since consumers had become accustomed to new food experiences, the impact of a few new items would not be substantial. The turnaround would need a major marketing engine to drive the business. Given the scope of the problem, the approach had to be big enough to impact sales on a very large scale. The decision was made to focus on President s Choice, since because of its exclusivity to Loblaw banners it served as a proxy for the stores. Further, given its scope (over 5000 food items), any growth would affect the company s bottom line. b) Communication Strategy While President s Choice was universally known, it wasn t generating the kind of buzz that was required to re-engage consumers with the brand. We needed to find the spark that would re-ignite the passion consumers once held for the brand when it was the food leader. But the communication had to drive sales for both food and non-food categories. We quickly determined that messages around freshness or variety would not differentiate the brand, would not be newsworthy, or would come across as meaningless platitudes. Crossover Note 10. We needed to find something new and interesting that would inspire consumers the way it did back in the 80s. At that time, eating habits were very plain, and PC products captured the imagination by offering an affordable taste of the good life. It was consumers aspiration for better eating experiences that connected them to PC so strongly. But in 2007, what could connect with consumers equally strongly, and on a broader (not just food-related) basis? In six short months at the helm, Galen Weston Jr. had set a new mission for the company, which reflected a strong corporate social responsibility focus. Key pillars of this strategy included respect the environment, source with integrity, and reflect the nation s diversity. The strength of the PC brand had always been its authenticity Crossover Note 2 and, given the need to generate renewed buzz, the decision was made to focus on its social consciousness. Further, the brand had heritage in doing the right thing it had first introduced GREEN products 20 years ago and had been the first to bring healthier products to the mainstream with PC Organics and PC Blue Menu. Now was the time to build on this heritage.

5 5 The decision was made to focus on the key pillars of Corporate Social Responsibility (CSR) for most of the year. By featuring specific President s Choice products as proof points we would establish the corporate philosophy (to reconnect with consumers) and sell tons of product. Pillar Environment Source with Integrity Communities/Health Diversity Product Green Bag, 2X Laundry Detergent, Phosphate-Free Dishwasher Detergent, Organics/Baby Food, Water Filter Apple Crisp, Local Produce, Free From Chicken Blue Menu Lean Burger Naan Bread, 1000 Tastes of Canada By focusing for the majority of the year on products that exemplified Loblaw s commitment to the world around them, we would earn the license to be a little more lighthearted during the holiday season and feature great-tasting products. With this strategy, we expected to boost sales of the items featured. But the big win would come from drawing more people to Loblaw banners and getting them to buy more PC more often. CREATIVE EXECUTION The creative approach may seem unconventional in terms of what is typically considered creative by award show juries. In this case, however, the approach had to address consumers wariness of a social responsibility message. The greatest downside would be if consumers dismissed the message as a greenwash. We had to underscore the importance of the message and make ordinary consumers who were already very familiar with the brand stop and look at it with fresh eyes and newfound affection. If that weren t daunting enough, we had to be confident that the messages didn t come across as preachy or guilt-inducing. The delivery would have to inspire a desire to make small changes for the greater good or the impact could backfire. The creative solution was to feature the new chairman of Loblaw Companies Galen Weston (Jr.). Within months of starting his post as Chairman, Galen had laid out the company s social responsibility strategy. Given how passionate he was about these issues, it would not be difficult for him to come across credibly. And that s when the real debate began. The PC brand had a long history of using a spokesperson (Dave Nichol, then-president, had put the brand on the map with his pitchman ads of the 80s and early 90s). But the decision to make Galen the spokesperson was not one that could be made lightly as there were major risks associated with this choice.

6 6 Beyond the inevitable comparisons to the success of the folksy Dave Nichol ads, there was the enormous personal risk associated with featuring Galen given his personal connection to the entire corporation. He was not a hired gun, but the son of the Loblawcontrolling Weston family. Failure on any level would have huge personal consequences for Galen himself, the Weston family name, the corporation, and its shareholders. It was a huge risk/huge reward decision. Despite having no previous experience as a TV spokesperson, Galen was a natural in terms of performance he came across as informative, knowledgeable and genuine not a pitchman. He was someone people liked and wanted to listen to. Initially, he was not known at all to the average consumer; he simply came across as the person in charge with a genuine desire to make things better. In a corporation the size of Loblaw, the decision to use Galen as spokesperson was of particular significance. In the end, given the severity of the business problem and the need for credibility, the solution demanded no less than the Chairman s commitment and personal involvement. MEDIA EXECUTION This consisted of short bursts (approx. three weeks) every few months from July 2007 to the present. During this period the campaign received 46 weeks of support across 17 different products. Media included TV (for each flight), and radio or newspaper, on-line and in-store support. The following outlines when the various TV ads aired. The campaign was national in scope. Total budget falls into the over $5 million category annually.

7 7 TV CREATIVE CSR Pillar: Environment Water Filter Galen: This little blue box has done a lot of good. To recycle something plastic, we just toss it in. Galen : But not all plastic lands in the box. Galen: Today, there s more than seventeen thousand pieces of plastic litter floating in every square kilometre of ocean. Galen: This is our President s Choice Water Filter. It s a great alternative to overusing plastic bottles. In just one year, your family could save over two hundred and fifty dollars. Galen: and over fifteen hundred of these. Galen: So here s to thinking outside the blue box. VO: The PC Water Filter. VO: President s Choice. Worth switching supermarkets for.

8 8 TV CREATIVE CSR Pillar: Source with Integrity Produce Galen: You know, The folks who bring you President s Choice buy more Canadian produce than anyone else in the country. We re proud to be the very best customer of the Canadian farmer. Galen: For our economy, for our farmers, for just plain great eating, nothing beats fresh Canadian fruit and vegetables grown close to home. VO: President s Choice. Worth switching supermarkets for.

9 9 TV CREATIVE CSR Pillar: Communities/Health: Organics/Baby Food Galen:Hi.I mgalenweston.andthis istheclass of2025. Galen:They reenjoying asbesttheycan President schoiceorganicsbabyfood. Galen:Likeallourhundredsofcertifiedorganic products Galen:It screatedusingsustainablefarming methods Galen: andnochemicalpesticides.andnow President schoiceorganicsbabyfoodcostsno morethanregularbabyfood. Galen:Soyouthinkthiswholeorganicsthingis goingtocatchon? VO:President schoiceorganics.worthswitching supermarketsfor.

10 10 TV CREATIVE Holiday Dulce de Leche Cheesecake Galen:President schoiceintroducedouroriginalnew York StyleCheesecakein1986.Anditbecameaninstant classic. Galen:In2007,weintroducedDulceDeLeche.Another classic. Galen:Andthisyear,we vecombinedthetwo.newpc DulceDeLecheCheesecake. Galen:Instoresnowbutonlyfortheholidays. Galen:Andit llgofast.sogogetsome. Galen:Asinrightnow.Thissecond Seriously.Go. VO:NewPCDulcedeLecheCheesecake.Restaurant decadence,justfiveninety seven.

11 11 BUSINESS RESULTS 1. Significantly more people are shopping at Loblaw Banner stores now (2009) than before the campaign started (June 2007). Ongoing tracking shows that since the debut of the Galen campaign, the percentage of people who regularly shop a Loblaw Company store banner as their primary store was up 12 points (from 31% in June 2007 to 43% in May/June 2009). Source: Ipsos ASI Tracking 2. In 2008, sales of total President s Choice brand was up 12.4% (CY2008). Yearto-date sales for 2009 are trending well: +9.3% VYA. For such a large brand, this level of growth represents hundreds of millions of dollars. Given the economy in 2009, growth of close to 10% is incredible especially given that 29% of consumers plan to cut back on grocery spending. 1 Sales of advertised items were also strong. For example, the new Dulce De Leche cheesecake, which was one of the featured items in TV, generated $2.5 million in sales in the first two weeks. The PC Water Filter sales in 2009 increased 11 times over the previous year after the Galen TV spot aired. Despite these strong individual sales, the impact of those items alone is relatively small compared to the overall brand gains. 3. More people are buying President s Choice, more often. The number of people who buy PC regularly (at least once every two weeks) increased from 41% before the Galen advertising to 51% in May/June Source: Ipsos ASI Tracking 1 Source: Bensimon Byrne Consumerology Report, Spring 2009

12 12 4. The strong results for President s Choice have been critical in halting the slide in Loblaw value and have returned the company to profitability. Source: Ipsos ASI Tracking The new management team put in place a three to five year turnaround plan. While many of these initiatives are still a work in progress, the advertising is the most significant visible change with a direct impact on business results. With total sales volume for PC increasing by hundreds of millions of dollars each year, it s easy to see the brand s impact on Loblaw overall. CAUSE & EFFECT BETWEEN ADVERTISING AND RESULTS Research confirms that the Galen Weston ads made people want to buy PC, and they increased consumers interest in the brand. Further, Galen is extremely well-liked as a spokesperson (even in Quebec, where his attempt to speak French is noticed and appreciated). Motivation: Every ad tested drove motivation to buy at levels significantly above norm. Source: Ipsos ASI Tracking

13 13 Connection to the Brand: The ads helped people re-engage with the brand. Source: Ipsos ASI Tracking: Appeal of Galen Weston as Spokesperson: Over 80% 2 of respondents have a favorable opinion. These opinions were driven by the advertising - where he comes across as friendly, approachable, honest and genuine. The research confirms that consumers generally do not identify him with his family background, but rather with President s Choice. In Quebec, a recent survey conducted by Infopresse indicates that Galen Weston is the third most visible and popular businessman in Quebec 3. And the competition was tough; he was up against Jean Coutu, Pierre Karl Peladeau (both with deep roots in Quebec) and Richard Branson. Also despite 17 different executions, there are no signs of wear-out: recent executions continue to deliver on all key equity pillars. Further evidence of the campaign s integration into popular culture is the fact that it has twice been spoofed on This Hour Has 22 Minutes. 2 Source: Reputation Management Study, The Gandalf Group, May 08 (base of those who are familiar with him) 3 Ipsos Descarie study for Infopresse (conducted in May 09)