Tobacco Plain Packaging Act

Australia will become the world’s first country to sell cigarettes in plain packaging cases on the 1^st of December 2012.

Cigarettes will now be sold in plain olive packs with graphic health warnings such as pictures of cancer-riddled mouths, blinded eyeballs, and other smoking-related illnesses. This news comes after a legal battle between the Australian government and Tobacco giants (Japan Tobacco Inc., British American Tobacco Plc, Philip Morris International Inc. and Imperial Tobacco), lost the right to print logos or trademarks on cigarette packaging.

British American Tobacco released a statement saying that not only were they very disappointed with the court ruling, but they believe that packaging would only “exacerbate an already significant illicit tobacco trafficking problem.” In addition, the company believes that this would have other adverse consequences including reduction of cigarette prices which would lead to increased smoking and reduced government tax revenue. According to Japan Tobacco and Imperial Tobacco, Australia’s government loses about $1.1 billion in annual revenue because of the cigarette black market, which is equivalent to 13.4 percent of the legal industry. Tobacco moguls also claim that the “Australian ruling unlawfully extinguishes the value of their trademarks without providing compensation.”

Health Minister and Attorney General Nicola Roxan, who has headed this international test case in Australia, has stated, “Gone are the days that cigarettes are glamorous, gone are the days where gold embossing can imply that they are luxury or pale green can imply that they are light and safe.” The federal government believes that this move will not only deter consumers from purchasing cigarettes, but also save many lives.

It will be interesting to see not only how tobacco marketers will differentiate their products in the Australian market under the new laws, but also if the case will create the chance for change down under.

Lyanne Ryan – Marketing Advisor

True of false: The higher they're priced the harder they fall

On Friday 10^th August, 2012, Manchester United made its debut on the New York Stock Exchange, a step which valued the club at £1.5bn making it the most valuable club in the world, followed by Real Madrid who are estimated to be worth £1.2bn.

16.7 million shares are to be sold (10% stake), which will raise money which was originally said to be used to pay off the club’s debts. It has now come to light that half of the money raised to date may have gone to the Glazer family with a smaller proportion spent in reducing the club’s debts. This has led to United fans worldwide to boycott the club’s sponsors’ products to prove the brand is worthless without the purchasing power of the loyal fans.

The club’s IPO (initial public offering) was priced at $14 which was below the $16 to $20 per share the club was initially offering investors. The IPO was cut the night before their debut on the stock exchange as a result of comments from Wall Street analysts and Facebook’s disastrous unveiling on the stock market in May. Facebook’s shares initially sold for $38 are now worth only $20, so it’s no wonder Man United was cautious with their IPO. One week after their debut on the stock exchange, United’s shares fell 5% below their IPO price before somewhat bouncing to just 1.99% below the IPO.

Both Facebook and Man United have fans all over the world, but these fans don’t seem to count for much on Wall Street. Facebook share owners are now able to sell their stakes in the company, which may lead to a further downward spiral in share price. Are Man United facing the same destiny? Some analysts believe Man United’s share price was wildly over-valued; some saying it is truly worth $4.97 per share.

Will it be a case of the higher they’re priced, the harder they fall? Only time will tell! Who knows, maybe the new signing, Robin Van Persie, has the answer!?

-      John Heavey, Marketing Advisor

Olympics 2012 & Branding

The 2012 London Olympics have been the main talking point of the world for the last number of months. With an audience of over 20 million tuning in for the 100m final, people have had plenty to say about the events, the athletes, the countries involved and also the branding and marketing of the products associated with the event. The Olympics brand is currently the second biggest global brand after Apple, and is worth over $47.6 billion. Many of the top tier companies would pay up to $100 million in order to become official sponsors of the event (CNN). 

Consequently, there has been a lot of speculation in the media recently about unofficial sponsors using ‘ambush’ marketing techniques in order to to try to increase sales of their products. The International Olympic Committee (IOC) stated that athletes are not permitted to promote any brand, product or service within a blog, tweet or any other form of social media, which is not an official sponsor of the Olympics. However, one brand which has been focused on in the media is “Beats” headphones by Dr Dre.  It has been reported that the company sent these headphones with a special Union Jack pattern, to athletes at the British Olympic camp. The athletes accepted the headphones and went on to publicly thank the company using Twitter. This particular  brand is not new to these types of marketing tactics as they previously provided the two teams participating in the 2012 NFL Superbowl with their products also.

 

As a result of this, many Olympic athletes have criticised the IOC's code of conduct for not allowing them to mention their personal sponsors on social media during the games. After all, these brands play a huge role in providing the athletes with what they need to become Olympians.

There continues to be huge controversy over the use of branding in the Olympics. The big brands such as Adidas, McDonalds and Visa, have paid huge amounts of money to be associated with the Olympics brand. However many other companies such as Nike, Paddy power and Google have used the Olympics strategically, in order to market their products or have their services used.  There are a lot of different views as to what is right and what is wrong with regards to branding and the Olympic games. It will be interesting to see what will come out of these branding issues once the Olympics are over. Will the IOC consider changing these strict rules? 

Ross Hartnett MDP Advisor

Air New Zealand Now Boarding for Middle Earth

An Air Zealand flight attendant wearing
elf ears for promotion of 'The Hobbit.'

This past week Air New Zealand announced a new partnership with New Line Cinema, the major American film production studio responsible for the Lord Of The Rings trilogy. 

This strategic alliance was announced at San Diego’s Comi-Con festival for the upcoming release of the two-film Peter Jackson epic “The Hobbit: An Unexpected Journey” and “The Hobbit: There and Back Again.”

In a press release from the Air New Zealand website, Sue Kroll, Warner Bros. Pictures’ President, said, “Just as Peter Jackson is able to transport audiences to the magical world of Middle Earth, Air New Zealand brings people to the breathtaking landscape that has been home to these epic productions.” 

The country of New Zealand is the filming location for both Hobbit films as well as the Lord Of The Rings trilogy, which helped to put the country on the map as an international tourist destination. With ‘Tolkien Tourism,’ or the trend of fans to flock towards iconic places like ‘The Shire,' the country has experienced a major economic boost from the popularity of the previous films. The government of New Zealand has also poured in $10 million NZD into the promotion of The Hobbit films around the world, the first of which is scheduled to hit theaters on the 14th December, 2012.

The airline has dubbed themselves the “Official Airline of Middle Earth” for the campaign. As part of the two-year agreement, two Boeing 777 aircrafts will be branded with The Hobbit for flights from the U.K. and North America to New Zealand. The airline promises a unique, in-flight promotion experience, as well as an in-flight safety video with a hobbit theme.

This is not the first time Air New Zealand has embarked on bold marketing campaigns. In 2010, the company introduced a twist to their in-flight safety video called the “Bare Essentials of Safety.” The airline staff stowed their regular uniforms for a wardrobe fashioned out of just body paint instead. This commercial spurred online marketing discussions all over the world and has since generated nearly 7 million views on YouTube. No doubt their new campaign will spark sky-high enthusiasm once again.

McLaren Aim to Alter Brand Image

The recent launch of Sky Sports F1 HD has given F1 teams a platform to communicate with their fan base like never before. To capitalise on this, McLaren have teamed up with London-based animation company ‘Framestore’, in order to produce a series of twelve 3-minute animations featuring members of the McLaren team. The series, Tooned, will release one episode for every race remaining in the season, with plans for another series next year. The first video, Wheel Nuts, which aired on July 8th features Lewis Hamilton and Jensen Button battle for dominance in a humorous CGI animation. 

The idea behind the series is to thaw the cold image McLaren perceive their brand to have. With a meticulous and scientific approach to their sport, it is difficult to lose this image off the track. The plan is to appeal to a wider audience, with hopes of tapping into the family market. It is hoped that using the real characters and voices, in CGI form, will alleviate the seriousness associated with the brand presently. 

The question now is, have McLaren taken the correct approach to altering their image? Will this series even reach its target audience? It is difficult to tell at this early stage, however, with talks of full length episodes and even a feature film, there is the possibility of great success.

Keep an eye out for the series over the coming weeks! - R.Conway

This year’s Olympic sponsors have taken an alternative approach to promoting their brand. They are no longer trying to push their products to the market through mass marketing. Instead, they are focusing on the parents of the athletes, the people at home, and the Olympic fans. This shows an increased level of engagement with the fans and target consumers. It makes the whole experience a lot more personal and touches on the consumer’s emotions, humour, and their own experiences with their children or parents.

Procter and Gamble currently have a ‘Thank you, Mom’ campaign which shows the athlete’s childhood and how their mother was the force behind them encouraging them each step of the way. The campaign focuses on the life of the athlete rather than the sporting excellence of the athlete. It means that the consumer feels as though they can relate to the athlete, whilst also being emotionally connected to the campaign. 

A less likely sponsor to take this approach is McDonald’s. Their most recent Olympic campaign focuses on the fans of the Olympic Games. The campaign consists of portrait photographs of the different types of fans, such as ‘the come-on come-on-er’. These portrait photographs will be made up of the McDonald’s customers, employees, and some of the British farmers that supply ingredients to the restaurant.

The campaign is going to record, replay, and celebrate the people, the moments, and emotions that will make the London 2012 Olympic and Paralympic Games an exciting and engaging event worldwide.

Is this the way forward for these large companies? Is this their long-term marketing strategy for the future, or are they playing on the emotions of the consumer in order to personalise their brand? Something tells me it is probably the latter. 

Starbucks to Open Tazo Tea Shop

Go to Starbucks for coffee? How about having some tea?

Starbucks is looking to open a new 1,700-square-foot store solely dedicated to its Tazo tea in the fall. It planned to sell more than 80 varieties of loose-leaf tea and other tea products. It will also offer hot and cold tea drinks, brewing equipment, pastries, packaged chocolates, infused sugars and honey.

This Seattle-based company decided to enter the new area because they see tea as a $95 billion global market that represents a significant growth opportunity.

According to the data from Euromonitor International, a privately owned, market intelligence firm, 5.6 million tons of coffee were consumed at home and through food service channels like restaurants last year, as tea were drank up approximately 2.9 million tons.

Both figures above exclude ready-to-drink products. Sales of ready-to-drink tea beverages through stores, restaurants and vending machines hit $56.2 billion in 2011, up from just over $32 billion in 2006.

The new store arrives at a time when Starbucks is aiming to expand its brand beyond coffee. Earlier this month, Starbucks announced plans to buy Bay Bread for $100 million and last year it bought the Evolution Fresh juice brand for $30 million.