Marketing Quality Differences

Fresh, expensive, rare, intricate, trendy, imported, attractive. The term quality can be defined in many ways—and often is, to suit the marketing goals of brand managers.

Today, this semantic challenge is aimed more at broadening than narrowing the definition. To marketers, this is good because quality is a key selling point. The broader the definition, the broader the possible applications and, ultimately, the depth of consumer demand. Moreover, the U.S. economy is good, which means that consumers are moving upscale—to higher “quality” purchases. The key is to offer the quality attributes they want and that consumers accept to be high quality.

• Healthy Qualities. “Healthy” is a hot and very upscale perceived quality in today’s market. The trend away from low- and no-everything foods is associated with a change in the way consumers view healthy food qualities.

The first big wave of low- and no-fat foods in the 1980s had appealing qualities—few calories, little fat and cholesterol. While such foods had been around in limited quantities and varying form earlier, this was a period of unprecedented variety and innovation. The concept—and the science behind it—enveloped virtually every food segment. McDonald’s even introduced a McLean Deluxe hamburger that sold for more than its regular burger.

“McLean Deluxe contained a seaweed derivative that replaced animal fat to bond the beef together,” observed Robert McMath, head of the New York–based New Products Showcase and Learning Center. “By the time McDonald’s killed it five years after its debut, McLean Deluxe had come to symbolize all of the healthy fast-food alternatives. It tasted awful and sold poorly.”

The healthy qualities consumers wanted were more than offset by poor taste qualities. Low- and no-fat products still have their place in the market, but consumers’ quality perception is very different. With few exceptions, such as the popular no-fat Wow! potato chip from Frito-Lay, development activity has shifted to packing healthy qualities into foods. The Wow! chip succeeds because Frito-Lay was actually able to replicate the taste of its regular chip, something McDonald’s could not do with its McLean Deluxe, nor could most other processors.

Herbal ingredients, nutraceuticals, and organics now define healthy foods, and food companies are in as big a rush to pack them in as they were to take fat and sugar out a decade ago.

This trend has even led to new, upscale branding, with prices to match. Kellogg Co., for instance, created its Ensemble Functional Foods subsidiary earlier this year specifically for this purpose. Its Ensemble brand “family of functional foods” is based on the cholesterol-reducing qualities of psyllium husks and oat bran and includes frozen entrees, bread, dry pasta, baked potato crisps, frozen breakfast/dessert mini-loaves, cookies, and ready-to-eat cereal.

Snapple Beverage Co. followed the same approach this year in creating a new line of functional beverages called Elements. Earth, Fire, Sun, Rain, Lightning, and Moon all feature herbal enhancements and unique, distinctive packaging—noticeably different from Snapple’s other products.

“These products are designed to meet consumer demand for functional ingredients,” stated Ken Gilbert, Senior Vice President, Marketing, for Snapple’s parent Triarc Beverage Group. He stressed that consumer perceptions of overall product quality are significantly enhanced by herbal fortification.

Lipton Tea, a subsidiary of Unilever, has gone a step further with its Tea & Health Information Center, designed to promote the antioxidant properties of teas, particularly green tea.

Market statistics support the trend. More than 63% of consumers actively look for all-natural products, according to the Food Marketing Institute. Functional beverage sales alone have soared by 400% over the past year. Consumers spent $12 billion on herbal supplements last year. “Consumers are willing to pay a premium for products which maintain their heath and well being,” touts Snapple’s trade material.

• Upscale Ingredients. Quality ingredients may emphasize luxury instead of health. Premium ingredients, such as fancy coffee beans, imported chocolate, heavy cream, exotic ground cinnamon, prime beef, and rare tropical fruits are all in demand. Consumers want the organoleptic characteristics they represent—and they’re willing to pay for it.

Kellogg has been particularly proactive with its new premium Country Inn Specialties line of ready-to-eat breakfast cereals, which include a generous amount of unique ingredients found in no other cereal on the market. These include pecan pralines, maple oat clusters, dried cherries, and palmiér pastries. Pricing is significantly more expensive than Kellogg’s traditional line.

Premium ingredients also are elevating traditional lines, such as Cracker Jack. Frito-Lay bought the sagging brand in late 1997 and hopes to double its sales this year. The company has revamped the product with bigger peanuts, fluffier popcorn—even better prizes in the box. In addition, line extensions, including chocolate and toffee, are under review.

In the foodservice arena, too, more-expensive ingredients are defining quality. McDonald’s even has McLobster Roll, Chicken Selects, Portuguese Sausage, and McDeli wrap in selected markets. Upscale coffeehouses—Starbucks, Seattle’s Best, and Caribou Coffee—have forced mainstream coffee shops and restaurants to offer espresso and fresh ground coffee.

• Quality Image. Image can have a big impact on consumer perceptions of quality. Nowhere is this more apparent than in the bottled water category. It doesn’t matter how many analyses and blind comparisons the consumer magazines do, Perrier and Evian will still command top dollar, even though their water is virtually identical to every other brand.

Dean Foods Co. moved upscale without changing a single specification for its milk. It moved from conventional paper and translucent milk cartons in sizes under a half-gallon to white plastic, resealable bottles, called Chugs, which have a classic retro milk bottle shape. The move by Dean Foods has been copied by other bottlers, resulting in changes in milk consumption that have nothing to do with ingredients and everything to do with image.

While the term quality has lost its edge to modern terms such as super-premium, upscale, trendy, and value-added, old-fashioned consumer acceptance is still the ultimate goal.

by PIERCE HOLLINGSWORTH
Contributing Editor