Tuesday, September 13, 2011 | Edited by Daniel Moores
||Millennial Generation's Diversity Will Shape Foodservice
The Millennial generation -- 52 million people between the ages of 18 and 29, many of whom love to eat out -- continues to be a crucial demographic for the restaurant industry to serve.
But according to The NPD Group's "Reaching the Millennial Generation" report, immigration will cause this group to grow and become even more diverse in the next 10 years, necessitating greater menu variety at restaurants than ever before.
Operators also need to think more about new dayparts to cater to Millennials, the market research firm found, as those consumers have a greater tendency to snack between meals than guests from other generations.
Millennials, sometimes referred to as "Generation Y," are more diverse than previous generations. Only 61 percent of Millennials are white, compared with 71 percent for adults 30 and older. Among Millennials, 14 percent are black, compared with 11 percent for older adults, while 19 percent are Hispanic, compared with 12 percent of older Americans.
Nearly half, or 47 percent, of the 1,933 Millennials surveyed were full-time students, while 9 percent were part-time students. Forty-four percent of respondents were not in school. Forty-four percent of Millennials did not work, 30 percent worked at least 35 hours per week, and 32 percent worked less than 35 hours per week.
"Millennials are moving into their heavy foodservice-using years, and this is the time to reach them to build their loyalty," Riggs said. "In reaching out to them, it's important to understand that Millennials are not a one-size-fits-all generation, and their needs and wants are varied."
Millennials accounted for 13 billion of 59 billion restaurant visits in 2010; they collectively spent $73 billion. The majority of those consumers' activity was at commercial foodservice establishments, which accounted for 10.2 billion visits and $63.7 billion in sales, compared with 2.7 billion visits and $9.6 billion in sales at noncommercial foodservice outlets.
In the report, NPD forecasts that Millennials will outnumber the baby boomer generation -- which the Population Reference Bureau estimates at more than 70 million Americans -- within the next decade.
"Millennials will overtake baby boomers as the most sought-after target for restaurateurs in the coming years," said Bonnie Riggs, NPD restaurant analyst and report author. "In order to attract this generation, foodservice operators and manufacturers will need to understand both the similarities and differences among Millennials."
As a group, Millennials reported that they spend more than half of their foodservice dollars on to-go or carryout foods. They also spend a higher percentage on snacks compared to other generations, leading to more sales among Millennials of items like ice cream, chicken nuggets and mini sandwiches.
(Source: Nation's Restaurant News, 09/07/11)
||Football's Back: NFL is a Key Player in the Economy
When the National Football League and its players struck a deal to end their labor dispute, they didn't just save the football season. They saved the most profitable sport in America, the most popular show on TV and billions of dollars that would have disappeared from the economy.
During the regular season, the National Football League itself expects to take in about $9.5 billion. The league estimates sponsorship revenue alone, which is included in that figure, will be up 15% from last year.
But the impact of the 10-year labor agreement the league reached in July to end a four-mouth player lockout reaches far beyond the NFL's big corporate sponsors, billionaire owners and millionaire players.
The league supports about 110,000 jobs in NFL cities -- not just quarterbacks and punters, but also hotel workers and sports-bar employees.
Together, the games add about $5 billion to the economies in NFL cities, according to an analysis prepared for the NFL Players Association by Edgeworth Economics.
NFL cities, fans, advertisers, restaurants and bars have been preparing for the seasonal windfall that comes with football.
"It's the game we most care about," says Rick Burton, a sports marketing professor at Syracuse University. "The largest number of Americans would probably say they have some level of affinity or passion for NFL football."
Here's a look at some of the economic ripples:
An NFL City on Game Day: 'Insane'
Downtown Cleveland is hopping on weekends when the Browns play at home. Fans of the home team -- and of the visitors, especially when the rival Pittsburgh Steelers are in town -- start packing hotels Saturday night. And the partying spills over into city's historic Warehouse District and bars near the stadium.
"Game days are insane," says Alice Burns, assistant manager and bartender at Bob Golic's Sports Bar & Grille, owned by a former Browns star. "Last season, we opened at 7 a.m. and were completely packed by 9 or 10."
Game-day sales "keep us going all year," she says. "It's pretty slow summertimes."
Business at John Q's Steakhouse multiplies by five on Browns' game days, says owner Rick Cassara. "It means everything to us," he says. "Everybody downtown does well on a Browns Sunday." When the Browns are playing, he doubles his staff, putting an extra 12 to 15 servers, bartenders and cooks to work.
Positively Cleveland, which promotes tourism to the city, estimated four years ago that every Browns game brought $7.9 million in business to Cleveland -- $63 million a year. "No matter how the Browns are doing," says Tamera Brown, the group's vice president of marketing, "they still sell out."
The Browns' appeal and economic clout extend far beyond Ohio's borders. Every game day, around 100 Browns fans descend on the Box Seat sports bar in Hermitage, Tenn., outside Nashville.
"I usually bring my wife and two kids, and we spend around $20 to $30 on food," says Kristopher Martel, 26, a software developer in Murfreesboro, Tenn.
At the Meadowlands: Concession Workers Wait
At New Meadowlands Stadium in East Rutherford, N.J., home of the Jets and the Giants, 80 employees are full-time and guaranteed a paycheck. The rest are event employees who had feared that, without football, they'd be out of work.
Tallying up parking attendants, security guards, ushers, ticket takers, janitors, merchandise sellers and concession workers, the Meadowlands employs about 4,000 people on an NFL Sunday, says Mark Lamping, the stadium's CEO. Without football games in the fall and winter, those people don't work, Lamping says.
Concessions at the stadium are managed by a company called Delaware North, which has been stuffing NFL fans full of hot dogs and beer for more than 45 years and has weathered player strikes.
Delaware North also does concessions for the Buffalo Bills, Chicago Bears, Cleveland Browns, Carolina Panthers and St. Louis Rams. The company's payroll for staffing the six stadiums is $24 million. Then there are the food, plate and cup suppliers who count on Delaware North's orders to stay in business.
"Everyone was on pins and needles," says Rick Abramson, president of Delaware North's Sportservice unit, who started his career as a vendor at Milwaukee County Stadium 40 years ago. "A missed season would be a problem for a lot of people, because they're counting on that money to make ends meet."
While Jets wide receiver Santonio Holmes was angling for a contract that reportedly will guarantee him $50 million over five years, veteran beer vendors were hoping they wouldn't lose the supplemental income they count on six months out of the year. They take home about $150 per game, plus tips and commission.
Overall, Delaware North takes in about $100 million a year from food and drink sales at NFL events. The company also employs about 30,000 seasonal workers.
"It's a great thing that they were able to resolve it," says Delaware North owner Jerry Jacobs Jr. of the players' agreement. "There was so much at stake."
On TV: A 'Halo Effect' Irrestible for Networks
Remember the controversial Snickers ad in which two mechanics eat the same candy bar from different ends and wind up kissing in the style of Lady and the Tramp? So does the rest of America.
That's because it aired during the Super Bowl, the most coveted television event for advertisers who want to get their products noticed.
Last year, the Super Bowl aired on the Fox network and set a record by attracting 111 million viewers, more than any other single telecast, according to Nielsen's list of the year's top 10. The second and third most-watched events were -- wait for it -- the postgame and pregame shows.
The NFL divisional playoff games rounded out the top five. In fact, excepting the Oscars and an episode of "Undercover Boss", the top 10 highest rated shows last year were all football.
The higher a show's rating, the more money ad time on it fetches. So it's no surprise that NFL programming generates $3.2 billion in advertising revenue for TV networks, according to Kantar Media. No other event gives advertisers as much exposure -- one reason Bud Light is paying $1.2 billion to be the NFL's official beer sponsor the next six years.
"For advertisers that are targeting men -- and increasingly targeting women -- the NFL provides great demographics," says Burton, the Syracuse professor.
A canceled football season would have left companies from PepsiCo to Procter & Gamble scrambling to reinvest their ad dollars in other programs. The problem: With broadcast ratings down generally, there are already "too many ad dollars chasing a smaller inventory of viewers," Nomura analyst Michael Nathanson said in a note to clients.
Since the NFL labor deal was signed, electronics maker Bose, Marriott International and financial services company United States Automobile Association have all come on board as sponsors. PepsiCo renewed a 10-year deal and General Motors renewed its sponsorship. These deals are worth about $2.5 billion in revenue directly to the NFL over the next 10 years, according to the league.
NFL ad revenue alone isn't enough for TV networks to make a profit on the $4 billion they pay the league each year for rights to air the games. But Fox, CBS, NBC and ESPN get an enormous audience to whom they can promote their other shows.
"If you think of watching the 4 o'clock game on CBS -- that's the lead-in to '60 Minutes' or they're promoting the next episode of CSI," says Anthony DiClemente, a media analyst at Barclays. "There's a halo effect that's hard to quantify."
CBS stood to lose the most without a football season, DiClemente says, because more than 40% of its 2010 revenue came from advertising.
But it's not just the networks and advertisers who depend on the NFL for a portion of their revenue. If the football season had been canceled, cable TV providers would have taken a hit, too.
Viewers would have canceled sports packages like NFL Red Zone, says Robert Seidman, an analyst for TVbythenumbers.com. Football fanatics pay about $50 per season to get the high-definition channel. And there are plenty of customers who only subscribe to satellite television service DirecTV to get Sunday Ticket, a package that shows every NFL game, Seidman says.
There's even a chance that Monday nights without ESPN's "Monday Night Football" would leave some viewers so bereft they would drop cable.
"One reason people list for not cutting the cord is sports," Seidman says. "It's hard to say what people would have done."
(Source: USA Today, 09/12/11)
||Phone Satisfaction Rests On Design, Dimensions
If you don't have an iPhone, you don't have an iPhone -- and you're probably not as satisfied as those who do.
According to J.D. Power & Associates' 20111 Wireless Smartphone Customer Satisfaction Study, Apple ranks highest among smartphone manufacturers when it comes to customer satisfaction, with an index score of 838 (on a 1,000-point scale), performing particularly well when it comes to ease of operation and features. HTC follows Apple in the smartphone rankings with a score of 801. The industry average score for smartphones was 788.
"(IPhone users) have been very consistent in their experience with their devices," Kirk Parsons, senior director of wireless services at J.D. Power, told Marketing Daily. "They tend to be on another level. A lot of it has to do with the navigation of it and how intuitive it is."
In general, satisfaction with smartphones (as well as traditional "feature" phones) is heavily influenced by the device's physical design and dimensions. According to the survey, satisfaction ratings are highest among smartphones whose weight does not exceed five ounces. (Among feature phones, satisfaction levels drop considerably when the device weighs four or more ounces.)
At the same time, people are more satisfied with thinner phones, with satisfaction rates statistically higher with phones that are less than half-an-inch thick. People are also more satisfied with touchscreen-only smartphones (as opposed to QWERTY keyboards) and with phones that have more megapixels in their camera functions (although satisfaction tends to level out at above five megapixels).
"Design is very key, clearly," Parsons says. "It's not really surprising the newest, latest, greatest technology impacts scores; that's always been the case. But you have to have the right combination. If you have a lightweight phone, but the thickness is not where it should be, it can affect satisfaction."
Meanwhile, according to the company's Traditional Mobile Phone Satisfaction Study, Samsung ranks highest in customer satisfaction of traditional handsets with a score of 718, followed by LG (717), Sanyo (716) and Sony Ericsson (709). At the same time, the average price of a traditional handset has fallen to $71 in 2011, compared with $81 at the beginning of 2009, due primarily to discounts offered by handset providers and wireless companies. Forty-two percent of owners said they received a free mobile phone when subscribing to their wireless service.
Smartphone owners continue to download apps at increasing rates. More than two-thirds of smartphone owners said they have downloaded games and social networking apps, while more than half (54%) have downloaded entertainment-oriented apps (52% have downloaded travel-oriented apps).
(Source: Marketing Daily, 09/08/11)
Daily Sales Tip: Managing the Sales Call
As a sales manager, there's no better way of coaching than joint sales calls in the field with your sales personnel. However, the big mistake many sales managers make on a joint call is that when the salesperson gets in trouble, the manager takes over the call. This is the worst thing that can happen.
The salesperson learns nothing and many times resents the manager for interfering. In making field sales calls, take the time to properly plan the call. If it is to be a joint presentation with the manager and the salesperson, then plan out what parts of the sales procedure each will cover.
If the objective on the sales call is for the manager to observe the salesperson in a selling situation, then it should be clarified before the call.
The salesperson is to handle the call and accomplish the objective. What typically happens, however, is that the prospect or customer will direct his/her question to the manager instead of the salesperson. When that occurs, the manager should just look to the salesperson to answer the question. Otherwise the manager ends up taking over the call and therefore learns nothing about the salesperson's selling abilities.
Source: Sales consultant/trainer Roy Chitwood