Gorillas and gazelles: GNC lacks muscle behind segmentation strategy

By Kevin Byrne

I’m not a bodybuilder. At 6’3” and 175 pounds, I’m more gazelle than gorilla. My workouts involve runs along Lake Michigan more often than bench presses at the gym. However, while in the midst of marathon training, I do rely on protein shakes and amino acid powders to help with endurance and recovery.

The trouble is that GNC (General Nutrition Centers) doesn’t seem to understand the difference between the muscle heads and me. They know I’m a customer but they don’t try to determine why. They don’t seem to know what to do with me.

The online experience with the brand is the worst. I receive daily emails touting the latest and greatest in the world of vitamins and supplements designed to inflate me to Incredible Hulk proportions. Meanwhile, the Yahoo Mail banner ads, in a feeble attempt to be targeted, show more of the same. Along with the online confusion, the retail stores offer little guidance as to where different types of customers might find their preferred products.

GNC has the information; that’s the frustrating part. They offer a loyalty card and track online and offline purchases. The data is there, they just need to use it. With a little analysis, distinct groups would most likely start to emerge: the organic, yoga-types with their homeopathic remedies, the dieters looking for the newest fads in weight-loss, and maybe even the lean, mean marathoners.

By defining better segments, GNC could target their consumers with more efficiency and grace. They may even choose to use overlay demographics or at least ask a few questions about users’ interests and goals. Current customers would feel more included and be better informed of products designed to help them achieve their objectives. As word of this new approach spreads, GNC’s image may evolve to be more inclusive of individuals who might currently feel out of place at this type of store.

It’s all about segments. You’ve got to separate the gazelles from the gorillas and market accordingly. All customers are not the same, so don’t treat them that way.

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Kevin Byrne is a graduate student in Integrated Marketing Communications at Northwestern University's Medill School. He enjoys his constant carbo-loading while he trains for his fourth marathon. He can reached at KevinByrne2010@u.northwestern.edu.

McSegments

By Alejandra Leon

When Ray Kroc took over a restaurant business from the McDonald brothers, he realized that kids were his target market.

No sooner had Kroc acquired the company than Ronald McDonald the clown was brought in to attract children to his restaurants. His insight would result in the creation of a billion dollar empire.

Kroc’s genius is that he understood his audience and identified the two main segments that would drive his business: working- and middle-class children and their parents.

The company has come a long way since the days of Ray Kroc. The global fast food giant has grown immensely over the decades thanks in part to its unique targeting ability and innovative implementation tactics.

An example of this was the launch in 1979 of Happy Meal in the United States. The meal-plus-toy packaging was an instant hit that became an American icon and still accounts for a large percentage of all McDonald’s meals sold today.

Following an IMC approach, McDonald's has gotten to know its customers and has built its advertising strategy around it. The company knows that by targeting families, it’s tapping into one of the most attractive consumer groups. As marketing and brand strategist Martin Lindstrom states: “It gets into the parents' wallets via the kids' minds.”

Though very effective, McSegmentation has become the focus of controversy regarding the company’s targeting efforts. The fact that children play such an important role in the purchasing decision has raised many questions concerning the ethical repercussions and regulations of targeting and advertising to children.

There are several reasons why McDonald’s is the number one fast food restaurant in the world, and as stated above, a very important one has been its ability to understand its customers, segment them and reach the heart of its targets. Whether the company should or shouldn’t be allowed to continue pursuing children is still up for debate.

Should children be the main consumer target for companies?

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Alejandra Leon is a blogger at Vitamin IMC and a student in the Masters in Integrated Marketing Communications program at Northwestern University's Medill School. She isn't ashamed to admit that she finds comfort in a McNuggets meal to brighten a hard day. Alejandra can be reached at alejandraleon2010@u.northwestern.edu.

Breakfast of Champions: Beer vs Cereal

With commoditized products how does a marketer develop a message that creates a sustainable relationship and a competitive advantage? The answer lies in a hot topic we've discussed this quarter: developing an authentic message that resonates with core customers. Authenticity isn't a new concept, but is gaining attention and importance in marketing. Joseph Pine from Ted.com explains it like this: "Authenticity is becoming the new consumer sensibility. The buying criteria for consumers to decide who they're going to buy from."

To illustrate this, let's see beer and cereal go head-to-head. What do these challengers have in common besides being the 'breakfast of champions?' Both face the challenge of differentiating themselves in very crowded markets. In the fight for consumer attention and loyalty, who will win the authenticity title?

Budweiser has connected with consumers through several knock-out (KO) campaigns such as the Budweiser Frogs and "Waasuup!" Its current campaign for Bud Light attempts to use a single word, Drinkability, to represent the essence of the brand and differentiate it from other light beer. Do consumers, especially Bud's core consumers, feel the same way? A one-word slogan can be a powerful move if it is the essence of your brand and your core competency. However, if it's something that can be copied by competitors or is a feature inherent in all products in your category, then the power is diluted. Compounding the problem is an unclear message that leaves consumers confused instead of connected. Saying your beverage has Drinkability is like saying this brand of cars is driveable or that brand of pizza is edible. Additionally, while Drinkability is featured prominently on the landing page for Budlight.com, once inside the site there is an array of different messages. In terms of authenticity, Pine would probably call Bud's new campaign a "real fake."

Kellogg's new campaign for Rice Krispies uses real families and shows how the product is part of everyday moments and childhood memories. While a commercial is a created/simulated experience, the authenticity comes from consumers internalizing the message by relating to the experience and drawing on their own personal memories with Rice Krispies. RiceKrispies.com continues to reinforce the message. Visitors can read about memories from other people and share their own and download recipes that can be used to create new memories. Additionally, the site has games to play with children and tips on cooking with children. The campaign hits hard with a clear, authentic, and consistent message reinforced by a Web site that provides relevant, value-add features that help consumers connect with and experience the brand. KO!

And the authenticity title goes to: cereal!

--Marina Molenda

Want Word of Mouth? Bring the LUV

This weekend I flew to Washington, D.C. for a friend’s wedding. Since I hate missing out on any fun, especially with this group of gals, I booked the last Southwest Airlines flight leaving Dulles on Super Bowl Sunday. Despite the fun, I found myself getting to the airport earlier than expected. While Dulles is a pretty nice airport, the idea of watching the Arizona Cardinals take on the Pittsburgh Steelers from a barstool with my suitcase at my feet was not ideal.

So I walked to the ticket counter and asked if I could fly standby on an earlier flight. Like many airlines, Southwest charges a fee for this type of change on a full-restricted ticket*. (What can I say? I’m a poor grad school student.) Unfortunately the $112 change fee does not really work for my student loan budget. It was looking like I was on my way to watching the big game with fellow travelers at Harry’s Tap Room on Concourse B.

That is until the ticketing agent played around on the computer for a couple of minutes and proudly displayed what I would consider the equivalent of Willy Wonka’s Golden Ticket – a boarding pass for the next flight. According to this agent (whose name I didn’t get, but whose face I will always remember) the price for an earlier departure was not $112, but for me to tell all of my friends and family about Southwest Airlines. Fortunately for Southwest, look who’s a blogger!

For full disclosure, I’ve been a member of their frequent flyer program, Rapid Rewards, since 1999. So as a knowledgeable customer, I am honestly not surprised that Southwest would come through in this way. Heck, I get birthday cards from them every year! But as a student of integrated marketing communications I believe that Southwest really considers itself customer-centric not only because it structures its business and operating procedures on its core customers’ wants and needs, but also because it understands that when its customers receive good service they look forward to sharing it with others.

According to the Word of Mouth Marketing Association, word of mouth marketing is the act of consumers providing information to other consumers. The association says “good WOMM strategies involve finding ways to support satisfied customers and making it easier for them to talk to their friends.” In this age of social networking, blogs and free information widely dispersed on the internet, it is easy for customers to share information.

But, companies also need to remember that ANY touch point with the customer is a possible WOMM tool, not just Facebook applications and messages posted on Twitter. For Southwest it is also the personal relationships forged between the employee and customer that make up the integrated marketing communications mix. It’s the great customer service at the ticketing counter and the singing flight attendants that become part of the stories travelers tell their loved ones when describing their trips.

For me, Southwest will always be the first place I go to when booking a flight. All they need to do to get more of my business is to start flying in and out of Newark Liberty International Airport. It’s so much closer for my Jersey-based parents than LaGuardia or Islip.

--Lauren McCabe


*Author’s Note: Although Southwest’s advertising campaign touts its “No-Hidden Fees Zone” they clearly state on their materials that fees may be incurred on restricted tickets. (Just want to make sure I’m giving kudos on the full disclosure.)