Winning Strategies For Food and Drink Brand Loyalty: Effective Consumer Engagement, Communication and Innovation

Published by: Business Insights

Published: Dec. 1, 2006 - 180 Pages

Table of Contents

Executive Summary

Defining brand loyalty

Challenges to loyalty

Building loyalty

Case studies

Industry survey

Conclusions

Chapter 1 Defining brand loyalty

Summary

Introduction

Defining brand loyalty

The changing nature of loyalty

Less loyal

A relationship over time

Big brands have the advantage

Not just about hunger

Measuring loyalty

A range of approaches

Tracking what consumers do

Asking what consumers think and do

Adding in brand emotion

Linking to financial performance

Measuring for real benefit

Chapter 2 Challenges to loyalty

Summary

Introduction

Driven by desire

Consumer cynicism

Too much choice

Less time

Less attention

Less belief

Less structure

Nuisance ads

Premiumization and price shopping

Premiumization

Price shopping

Promotional activity and price competition

Private label

Substitution

Decision-making at the shelf

Chapter 3 Building loyalty

Summary

Introduction

Getting the basics right

Product innovation

Defining your market

Targeting

Outsourcing innovation

Inspiration

Mass DIY customization

Occasion-specific

Packaging

Not just the product

Marketing innovation

Portfolio management

Brand strategy

Authenticity

Brand as identifier

Part of the popular culture

Marketing to kids

Other marketing actions

Communicating

Relationships

In the right place at the right time

Pricing and deals

Building Loyalty Checklist

Chapter 4 Case studies

Summary

Introduction

Case study 1: Procter & Gamble (P&G)

Company Overview

Goals & strategy

Initiatives contributing to loyalty

Consumer focus

Consumer insight

Word of mouth marketing

Innovation

Communicating

Learnings to take away from P&G’s approach

Case study 2: Innocent Drinks

Company Overview

Goals and strategy

Initiatives contributing to loyalty

Branding

Communications

Product innovation

Distribution

Learnings to take away from Innocent’s approach

Summary

Chapter 5 Industry survey

Summary

Introduction

Research methodology

Key Findings

Overview

Demographics of loyalty

Factors impacting loyalty

The rise of premium private label

Category differences

Strategies for improved brand loyalty

Survey summary

Chapter 6 Conclusions

Summary

Introduction

The future of brand loyalty

Key strategic recommendations

Focus

The fundamentals

Be more than just another product

Authenticity

Better targeting

Leveraging technology

Currency

Don’t count on it

Appendix 1.

Five-level Brand Leadership Model - January 20, 2006

Level 1 - Proprietary goods

Level 2 - Branded products

Level 3 - Positioned brands

Level 4 - Identity-building brands

Level 5 - Mythological brand

Index

List of Figures

Figure 1.1: High involvement purchase decisions weigh more heavily on consumers’ minds

Figure 1.2: Building loyalty at every encounter

Figure 1.3: Loyalty graphically represented

Figure 1.4: Increasing stakeholder value

Figure 2.5: Consumers are confronted with too many choices

Figure 2.6: Working hours stabilize, but “harriedness” grows

Figure 2.7: Local brands grow in popularity

Figure 2.8: Tremor’s Teen Panel

Figure 2.9: Relative purchasing powering selected European states

Figure 2.10: Growing income inequality in Europe

Figure 2.11: What constitutes a premium product?

Figure 2.12: Transparent offers most attractive

Figure 2.13: Increasing share of private label

Figure 2.14: In-store examples

Figure 3.15: Most common obstacles to innovation

Figure 3.16: Yoplait Essence Yogurt Drink and Purple Machine Superfood 100% Juice Smoothiefrom the Naked Juice Co.

Figure 3.17: H2O Pia Flavor Infusion Naturally Flavored Water Beverage and Campbell’sMicrowaveable Gravy

Figure 3.18: Promoting the umbrella brand

Figure 3.19: One model of brand leadership

Figure 3.20: American Pie

Figure 3.21: What makes it Fairtrade?

Figure 3.22: Top European Fairtrade markets

Figure 3.23: Ethical luxury

Figure 3.24: Example kids branded website with game

Figure 3.25: Tactics employed on kids’ websites

Figure 3.26: Creating a buzz

Figure 3.27: A flood of groceries through Amazon

Figure 4.28: The five phase Tremor Process

Figure 4.29: Amplifying the message

Figure 4.30: Connect & Develop successes

Figure 4.31: Beinggirl.com (UK)

Figure 4.32: Lesfilles.com (France)

Figure 4.33: Mr. Clean Bathroom Explorer

Figure 4.34: P&G’s Health Expressions

Figure 4.35: Innocent Product Range in 2006

Figure 4.36: The first Innocent ad

Figure 4.37: Grass-covered vans (at Fruitstock)

Figure 4.38: The Innocent blog

Figure 4.39: Smoothies for kids

Figure 4.40: Appealing to kids

Figure 5.41: Level of consumer loyalty towards mainstream food and drinks brands now and in thenext 5 years

Figure 5.42: Loyalty of different consumer groups to mainstream food and drinks brands

Figure 5.43: Increases in various factors and their impact on brand loyalty

Figure 5.44: Changes in the level of loyalty towards different types of brands over the next 5 years155

Figure 5.45: Levels of consumer loyalty to brands in food and drinks categories

Figure 5.46: Views on loyalty

Figure 5.47: Respondents’ definition of their marketing strategies towards their brands

Figure 5.48: Strategies to promote consumer loyalty

Figure 6.49: Duchy Originals trades on its heraldry

Figure 6.50: Putting it together

List of Tables

Table 1.1: Long-lived brands

Table 1.2: Behavioral & attitudinal approaches assessed

Table 2.3: Examples of evolving private label

Table 2.4: The value of eating out in foodservice channels (profit sector), by country (US$billions), 2004-2009

Table 3.5: Shift in thinking

Table 3.6: Number of annual in-home and out-of-home breakfast, lunch and dinner occasions, bycountry (billions), 2003-2008

Table 5.7: Most effective at retailing customer loyalty

Abstract

• 41.7%, of industry executives expect loyalty to ‘decrease’ or ‘significantly decrease’ over the next 5 years, slightly more than the 40.3% that currently rate loyalty towards food brands as ‘high’ or ‘very high’. Drinks generally enjoy greater loyalty, but there is still risk.
• Private label is the greatest threat to loyalty, followed by unplanned shopping as consumers are tempted away by lower priced private label alternatives and/ or are influenced to buy another brand (or private label) at the shelf front. Premiumization and price-shopping also threaten loyalty.
• The food and drinks sector is increasingly competing with the foodservice sector because of customers’ on-the-go lifestyles This is making it more difficult to clarify the benefits consumers want and where and when to reach them.
• True loyalty requires companies to think about creating desire and involving emotion. But consumers are increasingly disinterested in developing relationships with brands, because of the volumes of marketing and advertising to which they are exposed and cynicism about those messages.

• Anticipate and combat the key challenges to brand loyalty from consumer cynicism, advertising clutter, the private label threat, substitution, shelf side decision-making and premiumization to price led shopping.
• Develop more effective loyalty strategies based upon the in-depth case studies, best practice loyalty building strategies, analysis of product and marketing innovation and loyalty building checklist contained in this report.
• Ensure effective and accurate measurement of brand loyalty with the analysis of loyalty metrics and behavioral and attitudinal approaches provided by this report.
• Benchmark the opinions of nearly 200 leading food and drinks executives regarding current and future food and drinks brand loyalty with this report’s analysis of the results of a proprietary survey across the United States, Western Europe, Eastern Europe, Asia Pacific and South America.

• Authenticity. Consumers will reward trustworthy businesses with their loyalty, but they are increasingly cynical about companies and their motivations. It is crucial that a company is seen to be authentic, especially if it has an agenda that reflects consumer and marketplace trends.
• Private label. Private label is one of the fastest growing trends in retailing and a particularly ominous threat to brand loyalty, with consumers increasingly perceiving the private label brands to offer better value for similar quality. Private label products are also increasingly perceived to be innovative, where previously private label was accepted to be simply a follower of brands’ innovations.
• Changing consumer behavior. Growing polarization between those at the highest and lowest income levels is leading to premiumization and value lead pricing. However, even the affluent now substitute branded goods with cheaper alternatives. In addition consumers increasingly on-the-go lifestyles is affecting both the benefits they want and when and where these must be delivered.

• Can food and drink brands achieve the same kind of loyalty as brands in more aspirational consumer sectors?
• How can brand loyalty be measured most effectively?
• Why is brand loyalty becoming more difficult to maintain and build and what steps can be taken to generate greater customer loyalty?
• What is the threat from private label now and in the future?
• What are the key threats to brand loyalty?
• Which strategies are used by those most successfully securing brand loyalty in food and drinks and other sectors?
• How do senior industry executives view brand loyalty over the next five years?

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