Marketers try to promote value without cheapening image

— -- Here's a telling sign about the state of our economy: The folks behind those milk mustache ads with glamorous celebrities such as Brooke Shields and Beyoncé Knowles now are featuring financial adviser Suze Orman.

"Milk your budget" say the fresh print ads. A white-mustached Orman appears next to text about moo juice's "great value" at about 25 cents per 8-ounce glass.

"Gas is up. Energy is up. The cost of all food products is going up. And disposable income, for many people, is down," says Kurt Graetzer, CEO of the Milk Processor Education Program (MilkPEP), which is funded by the nation's dairies. "Fewer items are actually making it in the shopping basket."

In an October survey, BIGresearch found 47% of consumers have become more budget-conscious in the past six months.

Faced with those facts and slightly declining sales, the milk board opted to highlight the drink's spare-change cost.

"The troubled economy has created a new way of looking at milk," says Graetzer. "We're still talking nutrients, but we're talking in the context of what's happening to the American pocketbook."

As consumers increasingly put a death grip on their dollars, marketers of food and packaged goods — even household staples such as milk, cereal, soup and laundry detergent — are wrangling with how to make their products into shopping basket survivors.

The ad message of choice: value. "Value is the magic word," says Kash Shaikh, spokesman for Procter & Gamble's pg fabric-care lines. "In these economic times, people are doing the math in their heads, and they're being much more thoughtful before making purchases. … Now, we're going to be even more focused on helping consumers see value."

New campaigns for the new Total Care versions of P&G's Tide detergent and Downy fabric softener — which claim to be better at preserving clothes' new look — emphasize value payback: If garments stay in good shape longer, consumers won't have to buy as many new ones. And since Total Care is gentle, consumers can safely machine wash clothes that they otherwise would have to pay to dry clean.

Shopper gloom — consumer confidence in October was the lowest on record, according to the Conference Board — is just one hurdle marketers face. Higher costs for ingredients, packaging and transportation are squeezing profits, but penny-pinching shoppers make price increases risky.

That's particularly hard on name-brand marketers, who are more vulnerable in this economy to shoppers trading down to cheaper private-label goods. Even before this crisis, in a June survey by Consumer Reports publication ShopSmart, 29% of women said they were buying more generic or store brands than they were a year earlier. In the year ended Oct. 5, unit sales for private-label liquid laundry detergent were up 14%, according to tracker Information Resources.

A bevy of P&G's brand-name brethren in package goods — including Campbell's Soup, cpb Kraft Foods, kft Kellogg k and Unilever — likewise are playing up a value proposition in TV ads and in-store promotions, as well as with aggressive use of good old-fashioned coupons.

As they do so, however, they must be careful not to diminish their brand names for the long term, warns Kelly O'Keefe, executive education director at the Virginia Commonwealth University Brandcenter, a graduate advertising program.

Before the economic slide, many focused on getting consumers to "trade up" to their offerings, touting premium taste, quality or performance, as the reward for paying a higher price. The trick now, he says, is for marketers to tout value without cheapening brand image by overly playing up cost savings — or piling on promotional price cuts.

"What if we're only down in the economy for a year, and folks go right back to trading up? Then a company throws away years of hard work positioning its brand as a premium," he says. "When we come out of this, companies may have tarnished something they spent a long time building just because of a short-term gain."

Mixing the message

"It's about balancing. It's more than just (promoting) a number," says Lisa Klauser, Unilever's vice president of consumer and customer solutions. "It's about (promoting) brand benefits, as well as taking an angle on savings."

A look at what household goods marketers are doing to keep their spot in the shopping cart:

•Capitalizing on at-home meal prep. More than 40% of consumers say they're eating out less often than six months ago, according to management consulting firm Booz & Co. Mindful of that trend, name-brand food makers are playing up their supermarket items as convenient and — compared with a restaurant meal — cheap.

"People cannot afford to eat out as much anymore," says Klauser. "That represents an opportunity for us as food manufacturers. … The consumer is looking for affordable meal ideas."

Unilever has launched its biggest multiple brand publicity effort, hiring cookbook author Jennifer Bushman to promote a "penny-pinching pantry" in TV and radio interviews. (Of course, that pantry is stocked with Unilever products such as Ragú pasta sauce, Hellmann's Real Mayonnaise and Lipton Recipe Secrets dip, sauce and seasoning mixes.)

In an unusual joint promotion, rival food companies Kraft and Campbell's just banded together to tout a low-cost classic meal: tomato soup and a grilled-cheese sandwich. "Warm hearts without stretching budgets," reads the copy in an ad that shows a package of Kraft Singles cheese slices next to a can of Campbell's tomato soup.

Kraft's DiGiorno pizza is airing ads that calculate under "DiGiornonomics" that a delivery pizza is twice the price of a DiGiorno pizza baked at home.

•Highlighting "affordable" prices. "The original dollar meal" boasts an ad for Campbell's soups in the classic red-and-white can. It also touts the soups' "farm-grown vegetables and tender meats."

Current Kellogg promotions play up the price of a serving of its cereal with milk at 50 cents.

"We recognize that in these economic times that moms have a lot of tough choices to make, but what they serve for breakfast doesn't have to be one of them," says spokeswoman Susanne Norwitz.

A new Gillette TV ad seeks to justify the cost of its Fusion Power razor blades, at $20 to $25 per eight-pack. "In the world of high performance, what machine can you run for as little as a dollar a week?" asks a voiceover in the ad. NASCAR driver and Gillette spokesman Carl Edwards adds: "Now that's money well spent."

"It's a careful balance between performance and value," says Peter Clay, Gillette global vice president of male premium systems. "The majority of advertising we do is pounding the performance message home," yet Gillette is "cognizant of the current economic environment."

The new ad is "the way you want to do value messaging," he says. "You don't want the product to sound cheap. We scream 'guy performance,' and then we have our man Carl say it's 'money well spent.' "

•Buying value-focused Internet search terms. Kellogg has snatched up paid search terms including "cereal," "breakfast" and "value" on portals such as Google.com to drive budget-conscious consumers to its website. When they click on the ad, people are linked to a site that plays up the "excellent economic value" of Kellogg's cereal and offers a dollar-off coupon to buy some. Search-engine optimization is a "huge part of our strategy" to play up brand value, says spokeswoman Norwitz.

Kraft has also purchased Web keyword phrases such as "budget friendly recipes" and "easy inexpensive meals" to drive traffic to KraftFoods.com.

•Forging non-traditional retail partnerships. P&G teamed with women's retailer Ann Taylor Loft to ann spread the word about Total Care. Loft shoppers who buy a washable garment get free Total Care samples and a coupon for a dollar off the product. Store displays include bottles of Total Care, while mirror "cling" signs in dressing rooms say: "Keep your Loft favorites looking fabulous, wash after wash."

•Tweaking rival brands. As they struggle to gain — and keep — market share, many companies are getting more aggressive against possible rival choices. Velveeta cheese ads tell shoppers to "forget the cheddar, Velveeta is better," and claim a package of Velveeta is " twice the size of cheddar, for the same price."

Campbell's ads have mocked the ingredient list of soup rival Progresso. One says General Mills' gis Progresso is "made with MSG" while Campbell's Select Harvest is "made with TLC."

Progresso — which says it is removing MSG from many of its soups — zinged back with an ad that says, "Campbell's has 95 soups made with MSG." Progresso is also advertising that its traditional chicken noodle soup beat Campbell's Select Harvest chicken and egg noodle soup in taste tests.

As the economy continues its bumpy path, more brand wars are sure to come, says marketing consultant Jack Trout.

"Without a doubt, marketers are focused more on taking business from their competitors," he says. "We're seeing the return of hard-hitting advertising. … You could say, 'When the going gets tough, the tough get aggressive.' "