The Human Mutt

The next time your dog barks at the TV, beware, it might cost you.

Consumer marketing is simply wonderful: the best developed area of marketing, it provides a tremendous learning experience for poor business to business marketers, often with much less developed and therefore weaker, more superficial, propositions. The best marketing strategies have a strongly emotional component and the more you exploit humanity’s softer side the more money you are likely to make. You can apply the same principle, leveraging human emotion, to any product; for guidance just go to your local supermarket to learn more and see this magic at its most developed; take a look at the positioning of washing powders more closely, the visually cacophony of wine labelling, and even what is on offer today for you dear child-substitute, or lone person’s companion, the domestic pet.

The pet food market is massive: globally it is worth $67Bn.  It is also as good an example of consumer marketing as you will get; its proponents have humanised the domestic pet and in so doing encouraged us to indulge them more with owner imitating products. There are already ice cream snacks for dogs, iPod games for cats, and ultra-premium, organic and single-serve portions now stretch along supermarket shelves, reaching out to catch pet owners’ indulgent glance.

In our highly commercialised world you can give a dog no greater human complement than making a TV advert just for him, or her.  This week in Austria, of all places, Nestlé’s Beneful dog food is being promoted as being marketed “directly to dogs” with canine noises and images designed to create a buying moment – for the owner. No mistake about it, this clever little conceit, that the advert is targeting dogs, could not be further from the truth; it is just stimuli to get some suitably indulgent response from their doting, or amused, owners. Pets are clearly not the target audience of any pet food advertising, no matter what they say, owners are, or any other human with money that can be persuaded to rush out and buy one of the many human dining experiences we can now map onto our four-legged friends.

Pet food sales are on the up, in contrast to other food segments, with compound annual growth rates of 6% forecast for the next few years.  Nestle, the world’s biggest food company, has 13% of its sales coming from pet food, with higher margins driving greater profitability than most of its other categories, and profits rising at twice the group rate. Pet food is the second most profitable category for Nestle behind coffee, but Purina, its pet food brand, has the group’s highest return on capital at over 25%. Return on capital is what business is all about folks; if you don’t know what yours is then you should.

Incredibly, the US pet food market is four times the size of the baby food market and twice the size of coffee. Several countries now seem to have more pets than children, particularly Japan and possibly even the UK. It is also a great example of a little lateral thinking. Human beings are the decision makers in all purchasing decisions. It is very clear from consumer marketing, and pet food in this example, how we all think and how we can be gently coerced into buying greater “value” products and brands. The same thinking can be applied to your products and services too; if it hasn’t been already then you are probably missing a trick.

Mark

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