The Power of Marketing

Case in point: I developed a hitherto-nonexistent preference for Kraft salad dressings ever since they put out a series of, ah..."zesty" commercials.

Maybe it's the mere association model at work here. Maybe it's horns and halo. Maybe I was a horny housewife in a previous life. Or maybe I'm gay. Just a little.

Commercials are yet another reason to watch TV on Netflix. You still frequently see product placements though.

Those really were good commercials because 1.) nobody had done anything like it before in the salad dressing space, 2.) it was immediately memorable, 3.) it was funny, and 4.) it could induce curiosity (... "how zesty is that stuff? Should I try it?") for a product that was previously not even on the radar.

In a broader sense, I'm astounded by how Pavlovian association can overwhelm the mind and induce intense cravings. When I was reading through the Hershey reports, buying it for the retirement accounts everywhere for family and friends as one of the handful of "short of unforeseen personal circumstances, we shall hold this come hell or high water, Great Depression or astroid extinction event" stocks, I found myself craving Hershey's bars (despite liking Lindt and Cadbury chocolate better, though Hershey manufactures Cadbury here in the U.S.). We ended up getting these 36 count boxes - Hershey with Almonds for me and Reese's Peanut Butter Cups for Aaron - at Sam's Club. Every time I'd break out a past year 10K filing or read through legal analysis of the Hershey Trust debacle earlier this century, I'd open one of those 210 calorie bars and nibble on it as I worked my way through the numbers. There was one day I used 40%+ of my allowed daily caloric budget on chocolate and had to skip dinner. Just seeing the letterhead in the annual report (PDF) makes me want to snap off a piece and get a cup of fresh, hot coffee to go with it. Likewise, I have the "I'd Like To Buy the World a Coke" jingle in my iTunes library and if it happens to play, I'll crave a Coke. It's the craziest thing. Were I a food analyst at an investment bank, I'd be perpetually starving due to Pop Tarts and other low-satiety foodstuffs taking up my permitted daily calorie limits, leaving no room for actual food.

It's funny, too, how portfolio allocation influences subconscious behavior through incentive-caused bias and mere association with good things like wealth generation, both of which can overwhelm marketing preferences. After we setup the UTMAs for the younger family members, my eldest niece, who is 7 years old, has taken an interest unlike any of the others (she's a girl after my own heart ... the others can't be bothered but the first question out of her mouth when she sees me is as if she were inquiring about Christmas presents, "How much money have my stocks sent me?"). Seeing money sent to her hooked her immediately. She has a few shares of Exxon Mobil but there aren't any Exxon or Mobil stations around where they live so she didn't really understand what they did. I showed her pictures of the gas stations, chemical plants, refineries, etc., and she got it but it was still academic. My parents were with her, driving down to some island in the gulf coast to spend a couple of weeks on the beach, and they pull into an Exxon station. She apparently looks up, goes wide-eyed, and lets out a roar worthy of Lord of the Rings battlecry, "I OWN THAT!" Instant preference for Exxon or Mobil gas stations whenever available for the rest of the trip.

Then, you get into these related phenomenon. Several markets are largely stable with a clear first, second, and third place, with the rankings established a long, long time ago. The major players don't want to rock the boat because everyone is making so much money, the worst thing imaginable would be a price war as they bleed each other dry. Really, think about it. When was the last time you saw Unilever and Kraft go at it head-to-head? The former sells its Wishbone salad dressing, the latter, its eponymous stuff, and both ship the earnings out to stockholders at dividends, careful not to go too far out of the norm. For Kraft to create these commercials was really indicative of how willing they were to go after expansion.

I do think Kraft took some unnecessary, if not outright stupid, risks in the hope of generating discussion. An example is the Stacy's Deviled Eggs commercial for Miracle Whip, which is full of subconscious associations that were unquestionably going to send panic in the heart of half of Bible Belt America, many of whom no doubt believe Kraft had been taken over by hell's minions and this was some attempt to broadcast to the world a demonic stronghold (I'll withhold comment on the origin's of Kraft's previous management team, only to say, perhaps they were on to something). The potential gain in new customers could not possibly justify the permanent alienation it caused with certain consumer segments, even when you account for the lower rate of religiosity in the target Miracle Whip demographic. It was a bad risk-adjusted bet that served no greater, more noble purpose. Why do it? Why offend solely for the sake of offending? I tend to be too forgiving sometimes, but I get the feeling it was naive hipsters in coastal cities who think it was lighthearted, edgy, and funny, having no exposure to the significant part of American culture that is going to take it as a literal sign of the end times. I've heard members of my own extended family say their children don't need to worry about going to college because Jesus is going to come back soon and there's no reason to plan that far ahead; they can be missionaries, instead. People like that need Miracle Whip, too, and I'd like to sell it to them.

Overall, though, I'm optimistic enough that I had each of my older family members retail their shares of Kraft following the Kraft Heinz merger. I used the special dividend differently based on the opportunity cost of each person/account; e.g., two wanted to increase their consumer staples holdings and decrease their significant overexposure to food and beverage, including Kraft which was their largest or second largest food stock even following the dividend distribution, so I ended up having them buy more Colgate-Palmolive, which they'll retain for the next few decades of life expectancy to someday pass onto heirs. It might not do anything for the next five years, but it should at least perform in-line, if not slightly above, the stock market over the coming 25 years with a stronger-than-average balance sheet and a better-than-average capability of surviving a Great Depression.

And on the note of this conversation, I'll bet their toothpaste and mouthwash preference will change in short order ...

I have to admit I prefer when you write about strictly domestic food companies selling snacks I can't even buy on Taobao. Otherwise I end up eating all this junk food I don't even want!

I distinctively remember Robert Cialdini going off in Influence about how he abhorred the type of marketing used in the burger commercial below.

I recently went through a mini-stint of eating an abnormal amount of A&W. Abnormal because I rarely eat at A&W. The cravings were insane. I'd be walking to the grocery store and I would just want to go order a burger and onion rings.

The marketing is very good. I also find it interesting how they are taking a page from Chipotle, really advertising the fact that they use hormone free meat. What's interesting is that the hormone free moniker associates itself with "humane treatment", "organic", "natural", and other adjectives of that type without any actual connection to any of them besides the hormone free label. It's like a lollapalooza effect through mere association.

https://www.youtube.com/watch?v=lT_POsrIIBs

... I want to try that burger.

If you are ever up in Vancouver, Canada, the burger is on me.

I worked at Western Union in marketing and about over 15 years ago there were a set of very memorable TV commercials that ran for a short period time and were stopped because of budget cuts. They were so memorable that even 15 years after those commercials ran, when we did awareness studies and asked the question of where they saw Western Union ads, a large group of people said on TV, despite the fact that TV ads hadn't been run in over 15 years. So something that probably was considered way too expensive and was deployed into discounts (which can be more easily tracked) was still paying off 15 years later, and is still paying off today.

in the past 6 months or so, I have been trying to avoid all advertising and marketing -- most of my shopping has shifted to Aldi for no-name (but mostly very good brands -- we still prefer the taste of Hershey syrup, and Hellman's mayo… and a few others). I'm turning off the radio at commercials, trying to escape the influence. It's not entirely escapable, but limiting some of it may save our family some money.

Joshua, I haven't told you enough how much I love your blog, writing and idea-sharing. Thank you for this site!