Hitting Their Target
October 1, 2004
Hitting Their Target
by Lynn Petrak
From industry-funded ad campaigns to new product rollouts, demographics are a growing influence on marketing decisions.
Note to consumers: You really are what you eat. Or to be more specific, it’s both who you are and what you eat that are being scrutinized.
The use of demographics in marketing is nothing new. From the earliest print, radio and television commercials, advertisers courted certain segments of the public most likely to buy their products. It has always made sense to develop and merchandise products to those likely to consume them.
What has evolved, however, is the sophistication of using demographics for marketing purposes. Qualitative and quantitative market research is now a required tool for marketers, as they keep constant — if not daily — tabs on their buying public. Increasingly splintered media channels, from cable television to popular Internet sites to narrower niche publications, have also allowed marketers to more directly address well-defined consumer segments.
What’s more, demographics are impacting more than ad buys; the entire business mix is now driven in some part by the various publics that make up the broad consumer population. Research and development of new products is almost always subject to a review of a specific audience, be it children, health-conscious adults, Hispanic families or on-the-go young males. So, too, is packaging, designed to attract a customer’s eye in a matter of seconds. Meanwhile, communications programs that span advertising, marketing, public relations, education and promotions are also geared more specifically to certain people, locations, occasions and times.
Dairy industry leaders have witnessed — and in many cases, helped spur — the trend toward utilizing demographics to a potentially profitable advantage. They agree that today’s competitive environment for foods and beverages truly demands such a tailored, if aggressive, approach.
“We have noticed the shift in marketing from the ‘all things for all people’ to specific niche marketing of products that meet changing consumer lifestyles,” says Mary Kay O’Connor, director of education for the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA), noting the dairy market in particular has matured in its approach in recent times. “Products that typically were sold years ago as commodity products, like milk and yogurt, are now highly segmented, undergo constant new product development and are effectively sold today as branded products.”
Industry-funded associations that have started their own demographically driven programs concur it has been a successful strategy and one that has been also been effectively embraced by many processors and manufacturers. “I would say we use demographics and consumption data to understand who we need to go after when we are looking from a broader perspective at selling milk, cheese and yogurt,” says Grant Prentice, executive vice president of marketing and business development for Dairy Management Inc, (DMI), Rosemont, Ill., which has focused on certain segments of the population for its advertising, promotional and education projects.
The notion behind such tactics is really very simple, according to Tom Nagle, director of marketing for the International Dairy Foods Association (IDFA), Washington, D.C., which has overseen one of the industry’s longest-running and most recognizable campaigns under the Milk Processor Education Program (Milk PEP) banner. “What comes first is the consumer,” he explains. “It’s not about formulations or technology — which are important, of course — but it is understanding what consumers want and need and how to deliver it to them.”
Big Programs for Little Ones
Perhaps the largest emphasis for marketing programs based on the profile of buyers is the youth market. Like advertising in general, trying to capture kid’s attention and their influence on parents’ pocketbooks is not a new concept.
That said, dairy producers are savvy enough to know that children’s influence is more important than ever to final sales, particularly with so many other splashy products vying for their short attention spans. “Younger consumers, under the age of 14, are the major consumers of dairy products, and their decline has led to pressure on sales and further strategies to niche market in other demographic areas,” says O’Connor.
As with overall dairy marketing programs, there is greater sophistication in the tack that marketers are taking to appeal to kids. Within the broad children’s market, demographics have become even narrower, with specifically targeted sub-groups like babies, toddlers, grade schoolers, “tweens,” teenagers and young adults.
During the course of its “got milk?” campaign, for example, IDFA’s marketers noted the program could benefit from a more targeted focus. “We began to expand as we understood the market. We went through a process of looking at each segment of the consumer population and understanding what their issues were. As a result, we had different ads for different targets,” says Nagle, adding that IDFA worked closely with DMI to aim their efforts at respective target groups. “We prioritized them. We looked at the share of volume for each segment.”
After that evaluation, the groups broke down the markets into children ages 0 to 6, 6 to 12 and 13 to 18. “DMI was to fund the milk messaging for kids 0 to 12, and we would handle teens, moms and adult women,” says Nagle.
From that strategy emerged several tailored programs, including a $10 million advertising campaign developed with DMI aimed at children ages 6 to 12.
The younger demographic is being attracted in a variety of ways by DMI, which uses a gatekeeper approach to its messaging, whether through direct advertising or consumer education programs for cheese, milk and other dairy products. “Consumption of dairy products skews toward larger households with kids. A mom and a kid in a family household are at the center of anything we do and have been for years,” says Prentice, adding that what has changed is the impact that kids’ choices are having on sales. “Clearly, they have become more sophisticated consumers. They are allowed to make their own choices in a number of different situations. So as a dairy product, you have to be as interesting, appealing and delicious as any other product.”
The taste factor, as Prentice notes, is key and is one reason why industry encouragement of and manufacturer investment in new product development is a cornerstone of success. “It is the quality of the product experience that is going to drive their selection of that product. In our mind anyway, advertising and some of those marketing programs are important, but they are not nearly as important as making sure the choice the kid has is something he is interested in and it’s available to him when he or she wants,” he says.
As part of its work, DMI partners with producers and processors on optimizing products for kid appeal. In addition to sharing results of market research gleaned from research firms and its own studies, DMI interacts regularly with industry decision makers. “We do it on a one-on-one basis with a processor, manufacturer or foodservice company — we’ll go to them, present information and tell them about opportunities. Also, we share information in the context of forums and meetings where the industry comes together,” says Prentice, adding that public relations and communications programs with the nation’s media are also effective in spreading the word about successful strategies for reaching the youth market.
While most of DMI’s programs cover children up to age 12 and their parents and gatekeepers, IDFA’s efforts have been mainly directed at teenagers and parents. Since its launch to great fanfare a decade ago, the “got milk?” campaign has gotten more focused on these groups, in part due to the desire to emphasize the segments that are most in need of positive message and in part based on the sheer level of competition from juices, soft drinks, waters, isotonics and teas. “Over time, the milk-mustache campaign spending has been flat, while competitive spending has risen dramatically. The strategic response to the small share of spending for share of voice is to reduce the amount of targets,” Nagle says. “We do fewer things, but at levels we think are effective.”
No offense to certain demographic groups, says Nagle, but the campaign halted ads geared to young males and older adults. “We looked at the share of consumption they had and the degree of influence over others — we looked at the lifetime value of the segment,” he explains. “If you go after 50-year-olds, for example, they have a relatively low level of influence over consumption of others, even if their own consumption is going up. Also, if you look at the volume impact of keeping a 15-year-old versus a 50-year-old, you want 15.”
Now, in addition to targeting teens directly through celebrities that appeal to young adults, DMI has also re-emphasized mothers as influencers. “Moms are important in three ways: they are consumers of milk, they are important influencers of milk consumption not just on kids but the whole family and they are also gatekeepers — people are drinking what mom brings in to the house,” says Nagle.
The targeted efforts seem to be paying off, according to the all-important consumption data. “One of the things that was very gratifying to the board was when four or five years ago when we decided to focus more on teenagers and DMI decided to focus more on kids, we saw increases in per-capita consumption among toddlers, kids and teens,” Nagle says, citing the effectiveness of collaboration and focus.
As IDFA and DMI raised the profile of milk and its nutritional benefits, a parallel trend toward the development and promotion of flavored milks — particularly single-serve flavored milks geared for kids — was greatly impacting the way processors approached demographics and marketing. From the mid-1990s on, such products became a holy grail of sorts for dairy companies to distinguish their brands, generate excitement about milk and attract new young milk drinkers.
Phoenix-based Shamrock Farms, is one example of a processor that has scored big with flavored milks, particularly with youngsters. “Our primary position for our flavored milk line is the on-the-go individual looking for convenience, irrespective of their age. However, we have found success with school-age kids, specifically elementary and middle school, through channels such as a la carte and vending,” says Sandy Kelly, director of marketing, adding that youth and teens have been especially responsive to sports tie-ins, such as the featuring of the Arizona Diamondbacks and Luis Gonzalez in various promotions and packaging.
As with national milk marketers, Shamrock’s marketing team understood that parents were key decision makers. “Mom is a critical part of the equation in our approach to marketing our on-the-go milk. We have to make sure that we develop products that kids and teens will love and ask for, that are at the same time something that Mom feels good about.,” says Kelly. “Our single-serve milk line has been successful at striking this balance from both a product and packaging perspective.”
Flavored milks sold in eye-catching bottles with cute cartoon graphics and fun name brands may have been at the leading edge of items geared to kids in recent years, but they are hardly alone in the overall dairy market. The remarkable growth of yogurt products aimed at kids is testament to that fact, as is the rise of snacking cheeses developed with youngsters in mind, from new takes on traditional string cheese to individually wrapped novelty-shaped cheeses.
To Their Health
Demographic-driven marketing isn’t just kid stuff, of course. The dietary messages found in the latest programs from DMI and IDFA underscore the importance of another demographic: the health-conscious American. Whether it’s bolstering immunity, preventing chronic conditions, eating healthfully or losing weight, the goals of this segment of the population are taken into account across the product development and marketing mix.
DMI, for its part, is focusing on a new “3-A-Day” program nutrition marketing program designed to reach health-oriented consumers. The program includes advertisements in women’s magazines and on select television shows, among other demographically-chosen channels. “We are doing that in advertising, Internet communications and retail programming with other dairy manufacturers and processors. It’s all trying to stress the importance of getting three servings a day in the diet,” says Prentice, adding that the science behind the message has been well received. “The point we are making is that if you are cutting back on calories and you keep those three dairy products, you will burn fat more efficiently.”
IDFA is also incorporating weight-loss messages in its mother-targeted campaign, including a recent milk-mustache ad featuring 40-something actress and mom Kelly Preston. “We are primarily speaking to moms as adult women, telling them how milk can help them maintain a healthy weight,” says Nagle.
Meanwhile, although the youth market for flavored milks has been strong, processors also recognize the potential for health-conscious adults who like the flavor and nutrition appeal of such products. Shamrock Farms, for example, offers products for a range of end users, including a café mocha coffee beverage, a calcium-enriched fat-free flavored milk and a no-sugar-added lowfat chocolate milk. “It’s critical that these products deliver on the right flavor profile, while also being packed with an added benefit for consumers seeking more healthy alternatives,” says Kelly.
Beyond milk, Shamrock has also turned its attention to other dairy products in its stable that it can tout to health-oriented shoppers. “In addition, our cottage cheese line includes single-serve cottage cheese cups in 5.5 oz in both plain and fruit mix-in varieties. This has helped deliver on health-conscious consumers’ need to have a convenient snack or side item that delivers on their nutritional needs as well,” says Kelly.
The next generation of products aimed at consumers interested in wellness and nutrition are likely to be fortified and functional foods and beverages. “The baby boomers and the segment slightly younger than them have been real drivers of a lot of new products today that are fortified. There has been a real shift in the past 10 years, from ‘there are things that I need to cut out of my diet’ to ‘what do I need to include in my diet?’ They are more focused on getting the right things,” Nagle says.
Another emerging area of demographics and marketing has been efforts to reach certain ethnic and cultural groups. The United States may be an idyllic melting pot, but the marketplace reality is that different segment of the population have different demands and behaviors when it comes to food and beverage consumption.
O’Connor cites the promotion of lactose-free products to Hispanics and African-Americans as one example. The burgeoning Hispanic market in particular, she says, is one that is drawing interest from the industry and its various manufacturers. “Hispanics are prevalent shoppers of the dairy case with an average of 2.2 visits a week, and they spend the most of any demographic group on dairy products. Over 67 percent prepare their meals from scratch,” she says, adding that IDDBA recently published a report titled “The Hispanic Consumer.”
There are plenty of opportunities within the dairy case to reach Hispanics, with new products and supporting marketing materials and campaigns. “In the dairy case, cheese, yogurts, multi-pack products and fruit flavors are important to Latinos. For example, licuados — a blended drink made from milk, ice and fresh fruit — dulce de leche flavors and lactose-free products are Hispanic influences that could become mainstream,” O’Connor says.
At the national level, DMI works with state and regional dairy councils on programs aimed at the Hispanic consumer, while IDFA has also reached out to ethnic audiences. “We began a Hispanic advertising and public relations effort three years ago,” says Nagle, adding that the MilkPEP board recently formed a new committee to oversee such projects. “They’d like to put attention on that program because it’s clearly the fastest growing demographic segment. The challenge there is again to get the learnings and benefits of the generic campaign to the companies.”
Several dairies have already noted and responded to opportunities within the Latino marketplace, from creating Spanish-language billboards and promotional materials to developing new products with the ethnic consumer in mind, such as fruity licuado drinks. Meadow Gold Dairy, a division of Dallas-based Dean Foods, has been recognized for one its promotions in Utah, a campaign featuring the local “Miss Latina” personality. Another Dean subsidiary, Oak Farms, has launched new products aimed at Hispanic users, including a blended cottage cheese and pineapple product and tropical flavored milks with bilingual flavors.
Beyond introducing dulce de leche varieties, ice cream makers have sought the Hispanic consumer as well, including LeMars, Iowa-based Wells’ Dairy, which has created lime-flavored novelties and an apricot-flavored ice pop spiked with a bit of chili seasoning.
As they expand their ethnic marketing programs, processors would also be wise to examine their target audience within that segment, O’Connor suggests. “For a dairy manufacturer to develop a product for the Hispanic market they would need to determine who they’d want to sell to: Puerto Ricans, Cubans, Mexicans, South Americans, Central Americans, Caribbean Islanders and European Hispanics. You cannot assume all Hispanics want the same thing,” she says. “Marketers need to do a thorough analysis of these splinter groups to determine specific consumer wants and needs.”
As the nation becomes even more diverse, along lifestyle, ethnic, age and gender lines, one can expect demographic marketing to continue to dominate boardroom discussions throughout the dairy industry. For example, in addition to the “who” and “what” aspect of demographics “where” is becoming just as important.
“Demographics are the fundamental understanding, but to be successful you have to have a product, package and positioning that is interesting to the consumer when they are shopping in a certain channel. What you do with the demographics is affected by where they are buying food,” says Prentice, adding that various retail and foodservice outlets do require different approaches based on their respective buying groups. “Once you are there and operating in a competitive manner, it doesn’t matter who walks in the front door.” df$OMN_arttitle="Hitting Their Target";?>
Lynn Petrak is a freelance journalist based in the Chicago area.
Lynn Petrak is a freelance journalist based in the Chicago area.