Six signs your industry needs to start – or re - Artemis Strategy Group

Six signs your industry needs to start – or re - Artemis Strategy Group

Six signs your industry needs to start – or re-start – a campaign Co-presented by Artemis Strategy Group and Statler Nagle LLC May 26, 2015 Artemis ...

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Six signs your industry needs to start – or re-start – a campaign Co-presented by Artemis Strategy Group and Statler Nagle LLC May 26, 2015

Artemis Strategy Group

We specialize in Motivation Research that enables our clients to make sense of what their audiences think and feel, and how both directly drive their choices and behavior.

We work with a wide range of commercial, not-for-profit and public sector clients to help them develop compelling messaging, positioning and communications strategy.

Market Elevation at the Category Level •  We help industries, working collaboratively, overcome barriers to a stronger market position. •  We do this by reviving or repositioning their value among industry members, customers, clients, consumers, social advocacy groups and policymakers. •  The result? Measurable ROI.

STATLER NAGLE ELEVATE MARKETS, ACCELERATE RESULTS 4

5

Got Industry Marketing? What is industry marketing? 6

Why do industry groups undertake marketing programs? Simply put: to manage industry/category circumstances: –  Both market opportunities and market threats Positive triggers include:

Negative triggers include:

• 

• 

New competitive threats to market stability

• 

New regulatory mandates that threaten the industry operations, or product use

• 

Changing consumer or customer preferences and attitudes toward a category of products

• 

A public relations crisis that threatens an industry’s social license to operate

• 

Category fatigue; consumer boredom

• 

• 

New geographies opening for business due to trade and regulatory changes New applications for established products because of shifting government mandates or consumer preferences New product sub-categories identified at the intersection of niche gaps and refined products

7

Why would a member company support an industry campaign? They work – and while some funders have sought to end these programs, they have sustained because they work. •  They drive volume •  They are efficient •  They build the category •  They blunt competitive spending •  They give brands a step up, and then step out of the way

8

These are important questions :

1. Is your industry’s business being disrupted?

2. What’s the nature of your challenge or opportunity?

3. Is your challenge or opportunity: a)  About communication b)  About business performance c)  All of the above

4. Are you solving for the right problem?

5. Are you prepared for your audience to ignore the facts?

6. How long will you commit, and how will you know it’s working? 9

1. Is your industry’s business being disrupted? Disrupted  either  for  good  or  ill…     10

Successful campaigns are formed when everyone knows what’s at stake Got Milk? 1975-­‐1995  Per  Capita  Consump4on

 

Source: USDA

11

2. What’s the nature of your challenge or opportunity? Social,  economic  or  poli7cal  license  to  operate   12

The “licenses to operate” framework Social License No industry can survive long-term without a threshold amount of goodwill among the general public  

Political License No industry can survive medium term without at least a lack of animosity among legislators and regulators

Economic License No industry can survive even short-term without a reasonably level playing field relative to competitor alternatives with respect to: • Operating costs • Access to raw materials • Access to markets • Operational regulations

13

ROI

Got slogan? Is your challenge or opportunity: a)  About communication b)  About business performance c)  All of the above

Clever  slogans  won’t  solve  business  problems.   14

Advertising is the visible part of most industry marketing programs

Got milk? The incredible edible egg. Cotton: the fabric of our lives. Pork. The other white meat. Plastics make it possible. Beef – it’s what’s for dinner. 15

Advertising is the visible part of most industry marketing programs

But their success depends on a number of things you don’t see. Consumer Communication Customer Marketing & Communications Facilitated Customer Experimentation Industry Business Development Initiatives Products, Process & Marketing R&D Market Intelligence & Research 16

Advertising is the visible part of most industry marketing programs

Find and address the barriers to business growth, not just the messaging opportunities.

17

National Pork Board •  Advertising & Public Relations

$27,247,260

44%

•  Non-Communications Marketing & Administration

$31,575,800

50%

$ 3,477,000

6%

–  “Freedom to operate” •  Sustainability, •  Animal welfare •  Local business climate advocacy –  Producer methods education & training –  Retail & foodservice programs –  International market development, education & issues

•  Research & Development –  Producer Profitability •  Animal and Process R&D –  Nutrition –  Disease Management

Total Budget:

$62,300,060

Estimated rate-of-return: $15.50 for every check-off dollar invested during from 1999 – 2005.

18

Cotton Incorporated •  Advertising & Public Relations

$20,856,000

31%

•  Non-Communications Marketing & Administration

$25,693,000

38%

$20,451,000

31%

–  Global Supply Chain Marketing –  Cotton Management Systems –  Strategic Alliances –  Importer Support Programs –  Strategic Planning and Program Metrics •  Research & Development –  Product Development & Implementation –  Agricultural & Environmental Research –  Fiber Quality Research Total Budget: $67,000,000 After 40 years of Cotton Incorporated marketing and research across every link on the cotton supply chain, cotton has moved from a 35% market share to 61% of apparel and home textiles.

19

Are you solving for the right problem? And  is  your  answer  based  on  facts  or  opinion?     20

Research And Analytics Identify, Confirm & Inform Successful Programs Information about the nature and size of the market threat or opportunity – and about what customers want, need and value – is essential to the success of any marketing or advertising effort. Let’s look at how the beverage can manufacturers looked at research •  Consumer research •  Customer research •  Business analytics

21

For beverage can makers, we distilled eight dimensions of category growth potential •  Incremental Volume •  Customer Permission •  New Product Development Rates •  Speed to Outcome •  Ease of Entry •  Cost and Margin Opportunities •  Consumer Permission •  Retailer Profitability Statler Nagle, Marketing Strategy Advisors: Strategic Aluminum Packaging Initiative Recap

22

Are you prepared for your audience to ignore the facts? Because  they  oBen  do…   23

Facts ≠ better sales A long history of celebrity ads about the functional benefits of drinking milk were not driving sufficient sales impact.

24

Breakthrough science provides new facts about an important benefit: milk helps control weight. But we still needed to find a better way to turn facts into behavior change... •  MilkPEP undertook a quest to find the “higher order” benefits – that is, the emotional connections that would effectively motivate target audiences to drink more milk

25

White Milk Weight Loss Positioning Based on the emotional path to personal values that drive behavior change. VALUES: Confidence & Self Esteem I feel good about myself and successful and optimistic in my interactions with others.

EMOTIONS: Happiness & Pride Being healthy and fit on the inside shows on the outside. I like the way I look. I feel attractive.

BENEFITS: Nourishment, Health & Weight Control Complete nutrition that is good for my body and helps me maintain weight or lose fat while keeping muscle.

ATTRIBUTES: A Natural Source Essential Nutrients Dairy provides naturally occurring nutrients, including the right balance of calcium & protein.

26

The new version tells the facts and the motivating emotional truth. Revenue per dollar spent increased from $4.43 to $8.03 White Milk (1000s of gallons) 50,000  

43,222  

40,000   30,000   20,000  

18,109  

10,000   0   2004  

2005  

First consecutive sales rebound in 17 years. 27

How long will you commit – and how will you know it’s working? Are  your  expecta7ons  realis7c?     28

Building marketing programs takes time… and money •  We typically recommend a minimum program commitment of three years –  Time for program research and program development –  Time for value chain partners to engage –  Time for marketing programs to gain traction and build cumulative impact

29

Measurements that Matter Metric  

Goal(s)  Expression  

Source  

Frequency  

Ex:  Synd.  POS  data  

Annual  

Synd.  POS  data  

Post  events  

Program  and  partner   data  

Semi-­‐Annual  

Partner  repor4ng,   program  data  

Semi-­‐Annual  

Program  data/      

Semi-­‐Annual  

Synd.  Data  or  Survey  

Annual  

Program  tracking,  other   repor4ng  sources  

1/4ly  

Survey  

Annual  

DIRECT  BUSINESS  GOALS   Unit  sale  (via  all  channels  as  appropriate)  

Incremental  unit  volume,  slowing  declining   trend   Total  units  and  per  capita  us  

Channel  or  Retail  Case  Studies  

Incremental  unit  volume  from  event/  ac4vity   Event  vs.  Control/  Pre  

INDIRECT  BUSINESS  GOALS   Customer/Value  Chain    Par4cipa4on  

Ac4vity  &  Es4mated  Value  

Message  Adop4on,  Advocacy  &  Amplifica4on  –  by   “Others”  

No.  of  companies  and  category  penetra4on  

Funds  “Mul4plica4on”  

Partner  and  stakeholder  spending  within   strategic  plan  or  framework  

CONSUMER-­‐END  USER  GOALS     Usage  Rate/Occasions  

Change  vs.  benchmarks  

Targeted  Ac4on  of  support  or  implementa4on  

Change  vs  benchmark,  penetra4on  of   targeted  universe  

Consumer  adop4on/usage  as  a  func4on  of  exposure;   posi4ve  and  nega4ve  a_tudes  ,  and  benefit   Change  vs.  benchmark   agreement  

30

Campaign ROI Models Contain 3 Steps STEP  1:  ASSESS  INDUSTY  VOLUME  &  PROJECT  POTENTIAL  TO  ALTER  TRAJECTORY   Campaign impact under different scenarios

Impact  under   different  scenarios  

No campaign

BASE CASE

Takes xx months to bring loss to zero, then CAG leveling off at z%

MIDDLE CASE

Takes xx months to bring loss to zero, then growth doubles to y%

BEST CASE

Takes xx months to bring loss to zero, then accelerates to +x%

31

Campaign ROI Models Contain 3 Steps STEP  2:    ASSOCIATION/INDUSTRY  IMPACT  &  MEASUREMENT   CAMPAIGN SCENARIOS (MM) Cumulative Volume (units) Incremental

BASE CASE

MIDDLE CASE

BEST CASE

120,000

138,000

145,000

Projection of volume impact from campaign Per Capita (or other measure) __ (if no campaign __ )*

2019

Revenue ($MM) Profit ($MM)

Compare to ‘do nothing’ type of trajectory projection - translates to Dollar Revenue for P & L’s - from industry and confidential company work-up

Campaign Cost (6 yrs) $MM

- Campaign spending projection

Increm. Rev/Campaign $

- Key measure of industry campaigns As % of Revenue

Impact  under   different  scenarios  

- some lend themselves to per capita type measures

- Individual funder way of viewing industry measure

First Year Positive Contribution

- Important way of managing P&L expectations

NPV Turns Positive in …

- Important financial expectation management tool

Mfg IRR

- Provides key financial comparison vs. individual company capital projects

32

Campaign ROI Models Contain 3 Steps STEP  3:    INDIVIDUAL  FUNDER/PARTICIPANT  IMPACT   •  Customized P&L for internal use in evaluating individual company impact •  Includes inputs for market share, revenue, COGS, Spending, Cost of Capital, etc. •  Delivers Incremental P&L, Cash Flow, IRR, NPV and other ROI projections from investment in industry program under different scenarios. •  Delivers interactive scenarios across investment levels, time horizons and different cost structures. “Best Case”

No Campaign

Individual Funder Impact under different scenarios No Campaign

33

These are important questions :

1. Is your industry’s business being disrupted?

2. What’s the nature of your challenge or opportunity?

3. Is your challenge or opportunity: a)  About communication b)  About business performance c)  All of the above

4. Are you solving for the right problem?

5. Are you prepared for your audience to ignore the facts?

6. How long will you commit, and how will you know it’s working? 34

A CASE STUDY

35

Forest and Paper Products – an industry in a crisis •  Social Esteem diminishes; Americans love wood and paper, but –  –  –  – 

64% think the industry harms the environment 72% actively look for alternatives to paper and wood 81% want logging operations stopped or seriously curtailed Market campaigners target industry and its customers

•  Political Pressure hits critical mass –  –  –  – 

The Northwest is lost National and state forests are off-limits State Omnibus Forest Management Acts threaten remaining wood baskets Content mandates threaten most product lines

•  Economic Conditions worsen –  Environmental regulations become biggest cost –  Cheap imports (exempt from environmental regulations) flood market –  Pulp supply diminishes due to burdensome regulation and exorbitant taxation 36

The State of Play in 1997 •  6 laws, 5 states and 1 country –  “Within 10 years this industry will move entirely off-shore”

•  You can’t get there from here – it’s all about the trees

37

A Typical Campaign: ForestEthics

38

The Thinking Tools to Guide Industry Strategy Manage Upside

Manage Downside

•  Refresh (perspectives)

•  Redefine (threat)

•  Reinforce (attitudes)

•  Refocus (debate)

•  Refine (choices)

•  Reframe (choice)

•  Repurpose (benefits)

•  Reformulate (product)

•  Renovate (products)

•  Remove (ketchup stain)

•  Restructure (delivery)

•  Restage (hero)

•  Reshape (markets)

•  Redirect (resources)

•  Realign (messages)

•  Redefine (opponent)

•  Repeat, repeat, repeat

•  Repeat, repeat repeat 39

Forest and Paper Industry Decision-making Map: Equity/Disequity Peace  of  mind  /     Well  being  

Personal Values

Equity   Neutral  

Personal   fulfillment  

Disequity  

Future   generaJons  

Emotional Consequences

Contribute   To  solu4on  

Quality  of  life  

Enjoy     nature/outdoors  

Sustain  life   Feel  healthy  

Physical Consequences

Wildlife  protected   Becer  economy  

Availability  of     wilderness  areas   Knowledge  and   insight   Less  land  fills  

Less  erosion  

Message Elements

Maintain     natural  balance   Forest     management  

Data  and     Informa4on   Recycle  

Becer  water/   air  quality  

Old  growth  

Provide  jobs  

Reforesta4on   Less  clear   cu_ng  

Fewer  effluents/   emissions   40

Message Strategy Model: Industry Stewardship

SELF

Peace of mind through personal fulfillment Greater enjoyment of the outdoors Higher quality of life Balanced stewardship through: •  Availability of wilderness areas •  Protection of wildlife Forest management practices •  Reforestation programs •  Recycling initiatives

FOREST & PAPER INDUSTRY 41

The Strategy REFRAME A different crime  

REFOCUS A new villain  

REALIGN An unlikely hero  

REDEFINE A different message  

REPURPOSE/RESTAGE A sensible version of justice

•  No management is bad management •  Non-commercial use of the forests is the real threat

•  Developers and urban sprawl

•  The forest and paper industry – conservation-minded scientists •  Information and Insight to improve decision-making

•  A new definition of Responsible Environmental Stewardship – “Responsible Use” replaces “Don’t Touch”

•  The Sustainable Forestry Initiative

42

Customer Expectations •  Enhanced Standard •  Independent Governance - with ENGO participation •  Third-Party Certification •  Consumer Communication Program •  On-product Label

43

SFI Standard Objectives 1.  Broaden the implementation of sustainable forestry 2.  Ensure long-term forest productivity 3.  Protect water quality 4.  Protect wildlife habitats 5.  Manage the visual impacts 6.  Protect Special Sites 7.  Promote efficient use of forest resources 8.  Broaden the practice of sustainable forestry through procurement programs 9.  Improve forestry research, science, and technology 10.  Provide sustainable forestry training and education 11.  Ensure legal compliance 12.  Provide opportunities for public participation 13.  Promote continual improvement 44

45

Campaign Outcomes The state of play six years later: • 

74 percent of Americans believe a managed forest is superior to an unmanaged forest

• 

68 percent believe the forest and paper products industry is a vital part of the solution relative to responsible forest stewardship –  73 percent say that about environmental groups

• 

57 percent believe our forests are “healthy, abundant and growing”

• 

89 percent feel the biggest threat to our forests are development and urban sprawl –  Logging is only the 5th largest threat

• 

No new anti-logging laws in any state or nationally since 2001 –  Many anti-timber laws and regulations repealed/pro timber laws passed

• 

Logging on federal and state lands resumed under controlled circumstances

• 

The forest and paper industry in America growing again

46

Thank you! Questions or Comments? Contact Tom or Jon •  Tom Nagle, Statler Nagle –  202.280.6762 (office) 202.841.0970 (cell) –  [email protected]

•  Jon DeWitt, Artemis Strategy Group –  540.407.0494 –  [email protected]

47