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Market Inspiration

Jun 28, 2010 12:00 PM, By Don Kreski

Research data for the natural foods market applies to our own as well.

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Research data in natural foods also applies to AV.

The key to making good decisions is starting with good information.

That’s an area where marketing managers in the natural and organic foods industry have a big advantage over those of us working in AV. They can use cash register scanner data to model buyer behavior, rather than relying on surveys, samples, and other means of estimating sales and market share. Because of the great data available, it’s much easier for them to tell which marketing activities do and do not work.

Realizing that, I recently spoke to Mike Addona, director of analytics and consulting at Schaumburg, Ill.-based market research company Spins, whose clients are producers of natural and organic foods.

According to Addona, the industry is in many ways very similar to ours: it’s made up mainly of smaller companies driven by people who take an unusual amount of pride in their products. They are strongly influenced by a larger, related, but mostly separate consumer-driven industry. It is a growth industry, with industry-wide revenue expected to increase by about 9 percent in 2010—roughly the same as current InfoComm estimates for professional AV.

Addona has several observations of interest to the AV industry.

Short- to midterm effects

“We find that a lot of the things marketers do in our industry—or any industry—just don’t work very well,” Addona says. For example, he recently completed a study of a client’s radio and billboard advertising campaign, analyzing the sales of the company’s products before, during, and after the advertising ran.

“The ads were clever, but it really wasn’t clear what they were trying to sell,” he explains. “Consequently, we did not see the sales gains we would normally expect.” Addona says that, judging from sales results, the most successful campaigns are simple, direct, and clear. Those that emphasize clever delivery over product benefits may get noticed but are less likely to generate sales.

According to Addona, good advertising can and does work, but the effect is generally short- to midterm. “The hope is always to create such a memorable message that you get a significantly large sustained effect, but it rarely happens,” he says. The Energizer Bunny, for example, had a long-term impact on buyers’ perceptions of the Energizer brand, but most brand-building efforts must run on an ongoing basis. Addona does suggest that smaller firms advertise in bursts; that is, try to gain a lot of attention in a shorter period, stop, then go back and run short, intensive marketing efforts again and again.

A good result from a very successful campaign, Addona says, would be in the neighborhood of a 10 percent sales gain, over and above the “baseline” growth the product might have achieved with only very basic marketing.

The vehicle that carries the marketing message is crucial. Addona says that natural foods marketers rarely advertise on television, on the radio, or in general-circulation magazines. There is a relatively small but specific clientele that buys these products, and so a shotgun approach is not going to be cost-effective. Instead, companies tend to place their messages in specific health-related magazines and websites, and include in their marketing mix targeted vehicles such as PR, newsletters, and email.

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