Supermarket Advertising

Supermarket Advertising
Why are Supermarkets

not Super Marketers?
The New England Consulting Group

The New England Consulting Group
The New England Consulting Group (NECG) is the
premier strategy consulting firm for companies who are or
wish to be marketing driven.
NECG focuses on helping clients generate faster top line

growth through superior marketing and sales.
For more than 25 years, NECG has provided counsel to

leading grocery manufacturers and retailers and has been
on the forefront of change in the grocery industry.
Famous Presidential Words
4 The New England Consulting Group

NECGAdmin/FMI/SupermarketAdvertising
Famous Retailing Words
It’s the location
and price stupid!

So What’s Wrong?

The Missing Link
Superior Marketing
Can make people choose
One supermarket over another
Not once, but again and again
Even if it’s out of the way
Even if it costs more

The Competitive Squeeze
Warehouse Convenience
Clubs Stores
Dollar
Specialty
Stores
Stores
Drug
Wal-Mart Stores
New Store Formats
Number of Stores
143,571
Grocery
144,866
39,553
Drug
49,437
5,636
Mass Merch 6,399 1993 2001
9,133
Dollar Stores
3,652
1,212
Supercenters
148
904
Warehouse 661

New Store Formats
HH Penetration
100
Grocery 100
92
Mass Merch 95
62
Dollar Stores
52
63
Supercenters
52
52
Warehouse 50
1999 2002

New Store Formats
Shopping Frequency
73
Grocery 83
22
Mass Merch 26
12
Dollar Stores
10
21
Supercenters
15
10
Warehouse 9
1999 2002

New Stores
Grocery Square Grocery Average

Footage Growth Store Size
4.0% 50,000
40,000
3.0%
30,000
2.0%
20,000
1.0% 10,000
0.0% 0
1999 2000 2001 2002 1994 1995 1996 1997 1998 1999 2000

Fighting for Survival
Fighting for Fighting for

Store Traffic Share of Wallet

Protecting Margins
Gross/Operating Margin Trend
(% of Sales)
29% 5.0%
28% Gross Margin
27% Operating Margin
4.5%
26%
25%
24% 4.0%
23%
22%
3.5%
21%
20%
19% 3.0%
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

Levers of Growth
New Stores “Give me a place to stand and a

lever, and I will move the Earth.”
Lower Prices Archimedes
Unique Products
Shopping Experience
Personal Service
Superior Marketing

Levers of Growth
New Stores . . . The industry can’t sustain too many new
stores.
Lower Prices . . . Have to balance margins also.
Unique Products . . . Has become a level playing field with the

exception of private label.
Experience . . . Requires significant investment to

improve store shopping experience.
Personal Service . . . Too expensive to scale up.

Marketing . . . Possibly the strongest lever.

Report Card
Grocery Report Card
Assortment A Experience B+
Location A- CRM B
Price B+ Service C
Merchandising B+ Marketing C-

Role of Marketing/Advertising
Business Brand Marketing Advertising Advertising

Mission Vision Positioning Strategy Execution
Role of Role of Role of

Branding Marketing Advertising

Role of Advertising
Role of Advertising
Advertising
Advertising Objectives
Objectives
What are the objectives of

advertising?
♦ Drive store traffic?
♦ Build brand image?
♦ Expand shopping basket?
♦ Increase share of wallet?
♦ Build customer loyalty?
♦ Charge premium pricing?

Why Advertising?
FAST
FAST Great advertising works fast
Great advertising leaves a lasting

LASTING
LASTING impression
Return on advertising spending is

MEASURABLE
MEASURABLE measurable
VARIABLE Advertising is variable spending,

VARIABLE unlike building stores

What Should We Advertise
Low Product
Price Selection
Brand
Image
Shopping Convenient
Experience Location

Advertising Quality Assessment
New England Consulting Group’s Assessment of
Grocery Manufacturer and Retailer Advertising
30
Grocery Manufacturers
25 Grocery Retailers
20
% of Ads
15
10
0
1
10
ile
ile
ile
ile
ile
ile
ile
ile
ile
ile
ec
ec
ec
ec
ec
ec
ec
ec
ec
ec
D
D
Quality of advertising
What is an Advertising Strategy

An Advertising Strategy
Extends and elaborates a chain’s marketing strategy into
the arena of advertising.
Identifies the fundamental objectives of a supermarket’s

advertising.
Defines the net impression you expect to build in the minds

of consumers.
Identifies the basis upon which you expect consumers to

shop your stores in preference to the competitions’.

Why do You Need an
Advertising Strategy

Why You Need an
Provides continuity in advertising so that, over

time, the chain stands for something specific and
distinctive in consumers’ minds.

Why You Need an
Provides continuity in advertising so that, over time, the
chain stands for something specific and distinctive in
consumers’ minds.
Provides direction to agencies and creatives –

identifying the limits within which they should
exercise their creativity.
• Sufficiently concrete to represent real decisions about objectives.
• Sufficiently flexible to provide latitude for fresh and varied

executions.

Why You Need an
consumers’ minds.
Provides direction to agencies and creatives – identifying

the limits within which they should exercise their creativity.
Provides a common basis for evaluating the

merits of an advertising submission/ execution.

Why do You Need an
Advertising Strategy?
consumers’ minds.
Provides direction to agencies and creatives – identifying

the limits within which they should exercise their creativity.
Provides a common basis for evaluating the merits of an

advertising submission/execution.
Provides a history of decisions not open to

discussion each time new advertising is
presented.
Contents of a Best Practices
Advertising Objective
Target Audience
Rational Benefit(s)
Emotional Reward(s)
Permission to Believe
Competitive Frame
Brand Character
Focus of Sale
“If one does not know to which

port one is sailing, no wind is
favorable.”
Seneca

A supermarket’s advertising objective is the specific and
measurable action/behavior our advertising will affect in
the marketplace.
It should be as precise as possible, leaving nothing to the

imagination.
It must be measurable, in business results, market research

or both.
It must also be actionable, impacting not only behavior, but

also business results.

Target Audience
“Concentrate your fire!”
Admiral Nelson

Target Audience
The target audience is that precise group of purchasers
and/or consumers among whom your advertising should
have its greatest appeal/effect.
May be demographic (age, education, income, etc.) or

psychographic (image, lifestyle, attitudinal, etc.).
Should be specific and simple . . . don’t overburden the

creative task with extraneous information.
May include secondary purchase influencers - e.g., when

shopper is different from purchaser.

Rational Benefit(s)
“So, what’s in it for me?”
Focus Group
Respondent

Rational Benefit(s)
Rational benefits are those tangible benefits the consumer
will reap from shopping your stores.
List each benefit individually, do not group.
Rank benefits in order of priority.
Do not list every benefit available to the chain, only those

that are strategic/mandatory.

Emotional Reward(s)
“If it doesn’t put knots in your

stomach, love in your heart, a
smile on your face or tears in your
eyes, then it is not selling.”
Your Favorite
Consultants

Emotional Reward(s)
Emotional rewards are the psychic gratification consumers
receive as the result of shopping in your stores.
Also list each reward individually.
Ditto, rank order of priority.
If rational benefits are why consumers shop in your stores,

emotional rewards are why consumers feel good when they
do.

“I’m from Missouri, show me!”
Mark Twain

Permission to believe, or reason why, is the rationale we
provide consumers in our advertising, which makes our
benefit and reward promise(s) credible/logical.
If one exists, be clear in its definition.
If not, say so; do not be unrealistic.
Not every benefit/reward needs support.

Competitive Frame
“We have met the enemy and he is

us.”
POGO

POGO

Competitive Frame
A chain’s competitive frame defines the market segment(s)
in which the brand will compete and, within this market
segment(s), those competitors against which it will be
positioned.
It provides our target audience with a frame of reference.
It provides a benchmark against which to position our

stores.
It provides a base from which to claim/imply superiority.

Brand Character
“I never met a (supermarket) I

didn’t like.”
Mae West

Brand Character
A supermarket’s brand character is the sum of those
characteristics or personality traits that will help
differentiate your chain from those of your competition.
It can add an important element of distinctiveness,

especially in a competitive marketplace where real
differences are few.
It describes the personality we want to build for the brand.

(It is a personification of the chain.)
Once established, it does not change easily; it is long-term.

Focus of Sale
The focus of sale, or selling idea, is the principal basis
upon which we ask/expect consumers to shop our stores, in
the absolute and relative to competition’s.
It is the most important component of a strategy.

It is a succinct statement of the selling proposition; a
credible and provocative argument of substance about the
chain.
It need not/should not include all strategic components. It

should, instead, reflect a conscious decision to focus on the
key factors upon which the sale stands or falls.

Copy Strategy Format
Advertising Objective — A chain’s advertising objective is the specific and measurable
action/behavior our advertising will affect in the marketplace.
Target Audience — The target audience is that precise group of purchasers and/or
consumers among whom your advertising should have its greatest appeal/effect.
Rational Benefit(s) — Rational benefits are those tangible benefits the consumer will
reap from shopping your stores.
Emotional Reward(s) — Emotional rewards are the psychic gratification consumers
receive as the result of shopping in your stores.
Permission to Believe — Permission to believe, or reason why, is the rationale we
provide consumers in our advertising which makes our benefit and reward promise(s)
credible/logical.
Competitive Frame — A chain’s competitive frame defines the market segment(s) in
which the brand will compete and, within this market segment(s), those competitors
against which it will be positioned.
Brand Character — A brand’s character is the sum of those characteristics or
personality traits that will help differentiate our chain from those of our competition.
Focus of Sale — The focus of sale, or selling idea, is the principal basis upon which we
ask/expect consumers to shop our stores, in the absolute and relative to competition’s.

Good Copy Strategies
Simple — A minimum number of ideas, and

words.

Simple — A minimum number of ideas, and words.
Clear — The basis upon which consumers are

being asked to shop your stores in preference to
others must be clear.

Clear — The basis upon which consumers are being asked
to shop your stores in preference to others must be clear.
Specific — The focus of sale must be precise, not

vague.

Clear — The basis upon which consumers are being asked to
shop your stores in preference to others must be clear.
Specific — The focus of sale must be precise, not vague.
Preemptive — The strategy must provide a

competitive answer to the question “Why should I
shop this chain rather than some other?”; it must
not be easily adopted by others.

Clear — The basis upon which consumers are being asked to
shop your stores in preference to others must be clear.

Preemptive — The strategy must provide a competitive
answer to the question “Why should I shop this chain rather
than some other?”; it must not be easily adopted by others.
Strategic — The strategy must be devoid of

executional elements – deals only with content, not
with execution.

Clear — The basis upon which consumers are being asked
to shop your stores in preference to others must be clear.
Preemptive — The strategy must provide a competitive
answer to the question “Why should I shop this chain
rather than some other?”; it must not be easily adopted by
others.
Strategic — The strategy must be devoid of executional
elements – deals only with content, not with execution.
Consumer — The strategy’s content draws
directly from consumers’ needs and wants; the
chain must then deliver what the strategy
promises.
How Do You Get There From
Here?

Execution Organizer
Store Mentions
Store Visuals
On-screen “Characters”
Scene Changes
New News
Super “Supers”
Build Emotional Bond
End With the Brand


Supermarket Advertising

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Supermarket Advertising

Why are Supermarkets

The New England Consulting Group

NECG focuses on helping clients generate faster top line

For more than 25 years, NECG has provided counsel to

4 The New England Consulting Group

5 The New England Consulting Group

6 The New England Consulting Group

Can make people choose

One supermarket over another

Not once, but again and again

Even if it’s out of the way

Even if it costs more

7 The New England Consulting Group

9 The New England Consulting Group

10 The New England Consulting Group

11 The New England Consulting Group

Grocery Square Grocery Average

12 The New England Consulting Group

Fighting for Fighting for

13 The New England Consulting Group

14 The New England Consulting Group

 New Stores “Give me a place to stand and a

15 The New England Consulting Group

 Lower Prices . . . Have to balance margins also.

 Unique Products . . . Has become a level playing field with the

 Experience . . . Requires significant investment to

 Personal Service . . . Too expensive to scale up.

16 The New England Consulting Group

Grocery Report Card

17 The New England Consulting Group

Business Brand Marketing Advertising Advertising

Role of Role of Role of

18 The New England Consulting Group

What are the objectives of

19 The New England Consulting Group

Great advertising leaves a lasting

Return on advertising spending is

VARIABLE Advertising is variable spending,

20 The New England Consulting Group

21 The New England Consulting Group

23 The New England Consulting Group

 Identifies the fundamental objectives of a supermarket’s

 Defines the net impression you expect to build in the minds

 Identifies the basis upon which you expect consumers to

24 The New England Consulting Group

25 The New England Consulting Group

 Provides continuity in advertising so that, over

26 The New England Consulting Group

 Provides direction to agencies and creatives –

• Sufficiently flexible to provide latitude for fresh and varied

27 The New England Consulting Group

 Provides direction to agencies and creatives – identifying

 Provides a common basis for evaluating the

28 The New England Consulting Group

 Provides direction to agencies and creatives – identifying

 Provides a common basis for evaluating the merits of an

 Provides a history of decisions not open to

“If one does not know to which

31 The New England Consulting Group

 It should be as precise as possible, leaving nothing to the

 It must be measurable, in business results, market research

New Stores “Give me a place to stand and a

Lower Prices . . . Have to balance margins also.

Unique Products . . . Has become a level playing field with the

Experience . . . Requires significant investment to

Personal Service . . . Too expensive to scale up.

What are the objectives of

Identifies the fundamental objectives of a supermarket’s

Defines the net impression you expect to build in the minds

Identifies the basis upon which you expect consumers to

Provides continuity in advertising so that, over

Provides direction to agencies and creatives –

Provides direction to agencies and creatives – identifying

Provides a common basis for evaluating the

Provides direction to agencies and creatives – identifying

Provides a common basis for evaluating the merits of an

Provides a history of decisions not open to

It should be as precise as possible, leaving nothing to the

It must be measurable, in business results, market research

It must also be actionable, impacting not only behavior, but

May be demographic (age, education, income, etc.) or

Should be specific and simple . . . don’t overburden the

May include secondary purchase influencers - e.g., when

List each benefit individually, do not group.

Rank benefits in order of priority.

Do not list every benefit available to the chain, only those

Also list each reward individually.

Ditto, rank order of priority.

If rational benefits are why consumers shop in your stores,

If one exists, be clear in its definition.

If not, say so; do not be unrealistic.

Not every benefit/reward needs support.

It provides our target audience with a frame of reference.

It provides a benchmark against which to position our

It provides a base from which to claim/imply superiority.

It can add an important element of distinctiveness,

It describes the personality we want to build for the brand.

Once established, it does not change easily; it is long-term.

It is the most important component of a strategy.

It need not/should not include all strategic components. It

Simple — A minimum number of ideas, and

Clear — The basis upon which consumers are

Specific — The focus of sale must be precise, not

Specific — The focus of sale must be precise, not vague.

Preemptive — The strategy must provide a

Specific — The focus of sale must be precise, not vague.

Strategic — The strategy must be devoid of