The enduring power of paper as an effective means of communication

As a result of reading this Case Study, students should be able to:

• Understand the importance of communication channels and identify the different types
• Understand the effect of the various types of channels on consumer preference and behaviour 
• Appreciate the importance of research in helping businesses to achieve their objectives through marketing strategies and improved operations management.

Introduction

We live in the digital age - the age of the Internet, hand-held computers, and mobile phones. So what room is there, if any, for paper-based communications in the modern business world?

The digital age

As little as 100 years ago, people had to rely on letters and telegrams to communicate over long distances.

The messaging market

Voice messages, text messages, photo, audio, video. In the world's rapidly changing messaging market, the letter is now competing with many new forms of electronic messaging.

Identifying consumer needs through research

It is generally accepted that it costs less to keep existing customers than to find new ones.

Responding to research

Business decisions cannot be made in isolation. They need to be based on reliable information.

Conclusion

Recognising the continuing popularity of letters, Australia Post has been upgrading its letters-based products and services to ensure they combine the convenience of electronic technology with the proven advantages of paper-based communication.

Introduction

The digital age

The messaging market

Identifying consumer needs through market research

Responding to market research

Conclusion

Building the logistics of a nation

This Case Study profiles how Australia Post has built up a successful third party logistics business to meet changing customer requirements. The organisation has implemented a range of different operational management strategies in order to meet customers' national and international warehousing, fulfilment and distribution needs. As a result of reading this Case Study, students should be able to:

• Understand the business of logistics
• Outline how Australia Post has used technology to improve operational management 
• Explain different methods of business ventures, including joint ventures and acquisitions.

Introduction

Who do you think is one of Australia's biggest retailers? Would you choose a clothing company? A mobile phone store? An electronics retailer?

The business of logistics

To better understand just what Post Logistics is offering its customers, let's look at a traditional way of doing business.

The benefits of third party logistics

Australia Post is offering companies the ability to hand over their supply chain to Post Logistics; specifically, order management, warehousing, fulfilment, and payment processing.

Developing the network - adding strategic capability

There are many different ways of expanding a business into different markets. Expansion can be achieved internally through research into new products or services.

Technology as the backbone of the business

Post Logistics and Australia Post's other businesses use proven technology-enabled applications to manage their logistics operations.

Enabling Australian business internationally

Increasingly, customers are looking for a single service provider that can deliver supply chain solutions with a global reach. Many companies now have a global presence and still more have their goods manufactured abroad before these are brought into Australia for sale.

Conclusion

Introduction

The business of logistics

The benefits of third-party logistics

Developing the network - adding strategic capability

Technology as the backbone of the business

Enabling Australian business internationally

Conclusion

Embedding the brand through the business

This Case Study includes an overview of one of the largest banks in the world and outlines how research and planning have led to effective brand planning and marketing strategies. It investigates how to create and manage a brand; align the brand and the product; take the brand to the customer; build the brand into the business; and develop a recognisable and valued brand.

After reading this Case Study students should be able to:

• Understand the concept of branding and outline the procedures followed to take a product from market research to the consumer
• Illustrate market research methods 
• Analyse promotional strategies.

Introduction

Seem to be always busy and pushed for time? Don't like queues? Many people feel this way and want more convenient banking.

Managing the brand

To create brand awareness a bank has to get noticed whilst ensuring it offers what consumers want.

Aligning the brand with the product

There is no sense having a customer-focussed brand of convenience and simplicity without ensuring you have the products to match.

Taking the brand to the customer

The brand emphasises that ANZ has convenient banking and services to match.

Building the brand into the business

There is little point in listing brand attributes if the business cannot deliver on promises.

A recognisable brand

When organisations set targets, they often list key result areas and key performance indicators.

Conclusion

As the financial services market becomes increasingly crowded with international and regional banks taking a national presence, consumers have more options for every product they need.

Introduction

Managing the brand

Aligning the brand with the product

Taking the brand to the customer

Building the brand into the business

A recognisable brand

Conclusion

Building and executing an effective corporate strategy

This Case Study will profile the substantial management change undertaken by Alinta, a large Western Australian energy company. They were faced with a dynamic operating environment that required the development of a clear strategy to ensure the future success of the business. As a result of reading this Case Study, students should be able to:

• Understand the pressures for change on large-scale organisations 
• Analyse effective change management in a specific context
• Explain strategies and processes to manage change effectively.

Introduction

Consumers and business have a heavy reliance on high quality, reliable and dependable supplies of energy such as gas and electricity.

Understanding the external environment: the start of the journey

The change journey really began in mid-2000 when the state government privatised Alinta and announced that the natural gas market would be deregulated in Western Australia by October 2000.

The strategic management strategy

In order to be clear about the future direction of the business, management conducted an extensive SWOT analysis.

Alinta's strategy

In late 2001 Alinta announced its strategy for the achievement of the vision. It consisted of three essential interconnected cornerstones.

Executing the strategy

The concept of execution is central to the effective implementation of a strategic plan. The execution of the strategy would flow down to four key dimensions of Alinta.

Measuring the execution of the strategy

Management's next concern was how to best measure progress against the execution of the strategy.

The results: the journey so far

In the three years following the implementation of the strategy with its three interrelated cornerstones highlighted in the previous section, Alinta has accomplished the following:

Conclusion

Alinta has undertaken a successful journey over recent years and has managed the substantial changes in its business environment.

Introduction

Understanding the external environment: the start of the journey

The strategic management strategy

Alinta's strategy

Executing the strategy

Measuring the execution of the strategy

The results: the journey so far

Conclusion

Promoting stronger communities

This Case Study profiles a range of initiatives undertaken by Alcoa, a large global resources and manufacturing company, to promote stronger communities. A range of strategies and policies has been introduced by Alcoa recognising that a business organisation plays a part in developing prosperous and sustainable communities. As a result of reading this Case Study, the student should be able to:

• Understand the concept of social responsibility and how a business can behave as a good corporate citizen
• Outline the importance of developing economically sustainable policies
• Explain strategies and processes to promote stronger communities

Alcoa is a global resources and manufacturing company that operates in 43 countries with 131,000 employees and revenues of US$23.5 billion in 2004.

Introduction

Alcoa World Alumina Australia (Alcoa) has been operating in Australia since 1963 and provides employment for around 6000 employees and 1500 contractors.

Approaches to ethics and social responsibility

Alcoa's commitment to responsible corporate citizenship is guided by the corporate vision statement: 'Alcoa aspires to be the best company in the world'.

Promoting sustainability in local communities

Alcoa's commitment to sustainability and stronger communities also includes the promotion of regional economic sustainability through local procurement of goods and services and local recruitment.

Promoting volunteering and employee involvement

Employee and company involvement in community service can lead to greater trust, more vibrant communities and enhanced workplace relationships.

Conclusion

Alcoa has taken a planned and targeted approach to the advancement of corporate social responsibility in Australia with an emphasis on partnering with communities to build community capacity.

Introduction

Approaches to ethics and social responsibility

Promoting sustainability in local communities

Promoting volunteering and employee involvement

Conclusion

Meeting the challenges of operating in Australia and internationally

This Case Study profiles the formation and market positioning of Woodside, Australia's largest publicly traded oil and gas exploration and production company. After reading this case study, the student should be able to:

• Understand that it makes good business sense to develop a market position in a global context 
• Explain some benefits of an Australian company's global expansion to Australia's economic and social fabric, and benefits that accrue to other economies and societies
• Grasp a range of terms and concepts relating to globalisation

Introduction

Woodside Petroleum Ltd. is Australia's largest publicly-listed oil and gas exploration and production company with a market capitalisation of more than A$30 billion (at 31 March 2006).

Contribution to the Australian economy

Woodside generates significant export income for Australia. LNG alone has become a major export product and in 2004-05 injected around A$3.2 billion into the Australian economy.

Drivers of globalisation

People around the world are more closely connected than ever before. Rapid advances in technology such as the Internet have made international communication much easier.

Social and ethical responsibilities

Woodside's commitment to social and ethical responsibilities is evidenced in the policies and codes that guide the behaviours of its Board of Directors, employees and contractors.

Conclusion

Woodside continues to develop its Australian heartland while embracing the opportunities in the global market.

Introduction

Contribution to the Australian economy

Drivers of globalisation

Social and ethical responsibilities

Conclusion

Addressing changing food values through market research

This Case Study focuses on the affect of society's changing food values on the quick service restaurant industry. It outlines McDonald's Australia's commitment to address those changing values by ascertaining market needs and providing more choice for the consumer.

As a result of reading this Case Study, students should be able to:

• Understand the importance of meeting stakeholder needs in a changing business environment
• Understand the importance of market research in responding to consumer needs 
• Identify how McDonald's Australia has created menu changes and communicated these changes to the consumer.

Introduction

Health and fitness have become increasingly important issues in the twenty-first century. With concerns about rising obesity levels and a greater understanding of the importance of good nutrition, consumers have been demanding healthier food options.

Meeting stakeholder needs in a changing business

The business environment is not static. It evolves with time, reflecting changes in the broader social environment.

Responding to consumer needs

McDonald's Australia's approach has been to listen and learn.

Creating the changes

In order to create the changes, it was first necessary to identify exactly what those changes should be.

Communicating with the consumer

Making the changes is crucial, but it is equally important to communicate these to the consumer.

Conclusion

The quick service restaurant industry, led by McDonald's Australia, has come a long way towards addressing changing food values. But the story does not end there.

To download this case study as a free pdf, click the button below:

Introduction

Health and fitness have become increasingly important issues in the twenty-first century. With concerns about rising obesity levels and a greater understanding of the importance of good nutrition, consumers have been demanding healthier food options. This is perhaps most apparent in the quick service restaurant industry, which has had to undergo something of a revolution in recent years. The choice for the industry was clear: respond to changing consumer needs, or suffer the consequences.

With 761 stores in Australia and 1.2 million customers visiting these stores daily, McDonald's Australia was in a very good position to undertake the necessary market research required to start making the appropriate changes and thus lead the revolution.

This ability to move with the times is what made the business successful to begin with. The fi rst McDonald's restaurant opened in 1955 in the United States, and in 1971, Sydney's western suburbs became the home of the first Australian McDonald's. A customer focus on family-friendly affordable meals ensured rapid expansion. Around two thirds of Australian McDonald's restaurants are run by franchisees: see the diagram below. A franchise is a system of selling goods or services, in which a business that already has a successful product (the franchisor) enters into a continuing relationship with other businesses (the franchisees), permitting them to sell their products. The franchisee pays for the right to use the franchisor's name, products, and display methods. Franchisees receive company support and benefit from the established goodwill of the franchisor.

Meeting stakeholder needs in a changing business environment

The business environment is not static. It evolves with time, reflecting changes in the broader social environment. Our lifestyles are very different to those of our grandparents and even our parents, partly because technological advances have transformed the workplace and the family home. The pace of life is increasing, and many families turn to the convenience of takeaway and fast foods on a regular basis. However, change is pushing the foodservice world in different directions. Advances in healthcare and preventative medicine have stressed the importance of a healthy diet. Increased access to mass communications, such as television and the Internet, has meant that consumers are becoming savvier about health issues, and are demanding better choices in convenience foods.

As the business environment changes, so too do the views of stakeholders. Stakeholders are those groups or individuals who are affected by the activities of a business. McDonald's Australia stakeholders are diverse, and include:

• Customers - who range from the very young to the elderly
• Business partners - including franchisees and suppliers
• Employees - with more than 65,000 people employed throughout Australia
• Opinion leaders - or people who shape the ideas of the nation, including the government, the media, health professionals, and environmental groups.

Reconciling the interests of stakeholders is crucial to continued business success. Compare it to a three-legged stool. If one leg is weak or not properly aligned, the entire stool is weakened and can topple over. A strong relationship between McDonald's Australia, its franchisees and its suppliers is essential, with all elements working together to meet customer needs. Responding to a changing business environment is easier if the basic structure is strong.

Keep in mind that change is a two-way street. Businesses are affected by the external environment - but they also help to shape and create that environment. Stakeholders are coming to expect more out of businesses in terms of corporate citizenship. Businesses need to be mindful of the effect they have on the broader community, including the health of its youngest members. McDonald's Australia's philosophy is to be continually responsive to market demands, and accept that there is always more to learn. Catriona Noble, the Chief Operating Offi cer of McDonald's Australia, notes that, Social responsibility challenges are always evolving and we are focused on learning from experts and adapting our operations to maximise the positive impact we can have on our society.'

Responding to consumer needs

McDonald's Australia's approach has been to listen and learn. Market research is the key to ascertaining the needs of customers, and is composed of two key elements: qualitative researchand quantitative research.

Qualitative research refers to a technique that uses a relatively small sample group and probing questions. It is generally used as a first step, and its purpose is to define any problems and identify the relevant issues. In other words, it aims to answer the 'why' questions, for instance, 'Why do people use this product? Why is consumption falling?' etc. The research is transparent, meaning that the purpose of the study and the name of the organisation that commissioned it are disclosed to the people answering the questions. Various techniques are used; including interviews and focus groups, which attempt to unearth people's deeply held personal opinions and judgements.

Quantitative research takes things one step further, and is often based on information derived from the qualitative research. It involves a larger-scale approach and the collection of statistical data. By the use of questionnaires and opinion polls, information from a suffi ciently large sample can be used to identify and track matters such as market size, market share, and customer satisfaction. In other words, this type of research addresses the 'how many' questions, for instance, 'How many people use this product? How many people are potential consumers of this product?' and so forth.

In November 2005, McDonald's Australia undertook a major research project called 'Project Discovery'. The project made use of both qualitative and quantitative research techniques. The qualitative research involved two-hour, one-on-one interviews with 35 people; while the quantitative research involved telephone interviews with 2,602 people throughout the nation. The results showed some pleasing consumer perceptions, but also revealed areas that needed attention, particularly in the area of health. The following graph summarises the results obtained.

To supplement this major research project, McDonald’s Australia conducts regular tracking studies every quarter that measure the customers' point of view. Customers are asked questions regarding food image, brand image, quality, service, cleanliness and value.

By keeping the questions consistent, changes in customer attitudes can be measured and tracked over time. In addition, the customer service line provides much needed feedback. Its purpose is to answer questions from the public by telephone, and to receive complaints and comments. In 2005, the customer service department received 37,733 contacts from the public: a valuable source of information.

The end result of all this research is that consumers told McDonald's Australia what they wanted. They wanted more choice, with healthier and lighter food options. They wanted increased visibility in food labelling and more information about what they were eating: how much fat, how much sugar, and how much salt.

Creating the changes

In order to create the changes, it was first necessary to identify exactly what those changes should be. In 2002, Guy Russo, who was then McDonald's CEO, started attending obesity summits and participating in obesity forums. He met with key organisations, including the Obesity Taskforce. In the following year, McDonald's Australia formed a relationship with The Food Group Australia, a group of accredited dieticians, who provide McDonald's Australia with ongoing advice on nutrition.

Once expert advice was obtained, it was then a matter of translating these lessons and the research findings into concrete menu changes. McDonald's Australia took a two-fold approach - improving existing products, and creating new ones. Existing products were improved by methods that include:

• Switching to a canola and sunfl ower oil blend, which is low in saturated fat and trans fatty acids
• Reducing the amount of sugar in buns to five per cent, which is similar to the amount of sugar found in bread rolls in the supermarket
• Reducing the amount of salt
• Creating smaller serve sizes for muffins.

New products include:

• The Salad Plus range, with items containing less than 10 grams of fat
• The Deli Choices range, again with items containing less than 10 grams of fat
• The option of multi-grain rolls in the Deli Choice range
• The Pasta Zoo Happy Meal, which contains pasta shapes with no artificial colours or flavours, 'zoo goo' or a tomato dipping sauce, and a serve of fat-reduced milk with a flavouring straw

New Happy Meal Choices, which include fruit bags, apple juice and water. McDonald's Australia was the first quick service restaurant chain to earn the Heart Foundation tick for some of its meals. This makes it easier for customers to select the healthier meal options. Making healthier choices has also been made easier by extensive nutritional labelling, both in-store and on the company website. New packaging includes percentage daily intake information, so customers can see how their food choices relate to their overall daily requirements.

Despite the changes, the new menu options are still in keeping with McDonald's Australia's brand. Importantly, the packaging, presentation and service are all recognisably McDonald's, a brand that already enjoys widespread recognition and success.

Communicating with the consumer

Making the changes is crucial, but it is equally important to communicate these to the consumer. McDonald's Australia developed an advertising campaign that had the key goal of communicating their new healthier food options, countering misconceptions within the community.

McDonald's Australia has made use of various advertising media: print, billboards, radio, television and the Internet. Each media type targets its audience carefully. For instance, different groups of people listen to the radio at different times of the day. Advertising during the morning rush hour is aimed at people who listen to the radio as they drive to work. It is no surprise that the focus of these commercials is breakfast menus and McCafe coffee. During the day, the radio is more likely to be listened to by the elderly and young stay-at-home parents, whose priorities will differ. Mothers are typically concerned with healthier food options for their children, including the new Happy Meal Choices.

McDonald's Australia has a reputation as a responsible advertiser, and supports the strict advertising codes that exist for the quick service food industry. It has reduced advertising during children's television programs by sixty per cent in recent years.

The McDonald' s Australia websites are designed to be appealing to teenagers. They are both interactive and informative, and make use of latest design and technology. The 'make up your own mind' website at www.makeupyourownmind.com.au invites the customer into the virtual store, to see what goes on inside McDonald's Australia to make up their own mind. By having the capacity to include signifi cant amounts of information, the websites are a key part of McDonald's Australia’s commitment to transparency in their advertising and operations. As well as advertising products, the websites fulfil another purpose: staff recruitment. Both the 'make up your own mind' site and the parent site www.mcdonalds.com.au contain career information - McDonald's recruitment is not limited and can include parents wanting to re-enter the workforce or students working their way through school or university.

Conclusion

The quick service restaurant industry, led by McDonald's Australia, has come a long way towards addressing changing food values. But the story does not end there. McDonald's Australia is also making significant changes in other areas of its operations: customer service, quality and speed, and its physical impact on the environment. McDonald's Australia is committed to the use of sustainable business practices, and this will be one of the key areas of focus in the days ahead.

CEO Peter Bush summarised McDonald's Australia's attitude when he said, 'While I am proud of the changes that we have made I believe we still have more to do, which is all part of this exciting journey we are on'.

McDonald's, Deli Choices and Happy Meal are registered trademarks of McDonald's Corporation and its Affiliates.

Revitalising the Slurpee brand

This Case Study investigates how 7-Eleven Australia revitalised the Slurpee brand. It examines how 7-Eleven Australia undertook extensive quantitative and qualitative market research to ascertain customer perceptions of its brand and how it developed and implemented a marketing strategy to revitalise the brand and accelerate sales.

By reading this Case Study students should be able to:

• Describe the marketing strategies undertaken by 7-Eleven Australia to investigate the Slurpee Brand 
• Explain the key features of 7-Eleven Australia's Slurpee revitalisation campaign
• Evaluate the success of the Slurpee revitalisation campaign  

Introduction

7-Eleven is the world's largest operator of convenience stores with more than 35,000 franchised and licensed stores in 17 countries generating annual sales exceeding $36 billion.

Researching the Slurpee Brand

Businesses must undertake ongoing market research to keep pace with market trends.

Positioning the brand

The market research showed 7-Eleven Australia that it needed to “create a connection to the brand not just the product.”

Bringing the brand proposition to life

A visual identity was created that celebrated the Slurpee experience by bringing to life four things their youthful market generally associated with the Slurpee experience: Cram more in! Brain Freeze! Colour your Tongue! Mix it up!

Marketing and promoting Slurpee

It might have been argued that for many years Slurpee sold itself. However as the retail convenience sector became even more competitive it was vital that retailers developed goodmarketing, promotional and public relations campaigns.

Adding value through new product development

Given Slurpee’s status as an iconic product, 7-Eleven Australia wanted to truly establish their destination brand by extending the Slurpee range.

Conclusion

The Slurpee, 7-Eleven’s own proprietary brand, has transcended the frozen carbonated beverage product market and like the Aspirin, Band-aid and Esky has become accepted as the default name for its own product category.

To download this case study as a free pdf, click the button below:

Introduction

7-Eleven is the world’s largest operator of convenience stores with more than 35,000 franchised and licensed stores in 17 countries generating annual sales exceeding $36 billion.

7-Eleven Stores Australia Pty Ltd is a wholly Australian-owned family business operating as the independent licensee of 7-Eleven in Australia. The company has also recently entered into a binding agreement with Mobil Oil Australia Pty Ltd to acquire its retail fuels business. On completion of the acquisition in October 2010 7-Eleven will be the third largest private company operating in Australia, conducting more than 160 million customer transactions per year, with projected sales in excess of $2.84 billion. The acquisition comprises 295 company-owned or leased service stations, primarily located in the metropolitan areas of eastern Australia, taking the number of 7-Eleven stores from 400 to more than 650.

The Slurpee is the world’s most popular frozen carbonated beverage and has become a 7-Eleven icon. Slurpee, first known as the ‘Icee’, was introduced in 7-Eleven stores in 1965 and was originally made using a converted automobile air-conditioner. In 1967 the name Slurpee was coined and it has grown to become one of the world’s most recognisable proprietary brands. The Slurpee has been available in Australia since 1977, when 7-Eleven opened its first store in Oakleigh, Victoria.

In Australia in 2009 more than 10 million cups of Slurpee were purchased, resulting in a lot of BrainFreeze!

As a brand integral to 7-Eleven the Slurpee had enjoyed healthy but plateaued sales over the years. 7-Eleven Australia had conducted very little research, marketing or significant advertising on the product for some time, essentially, because Slurpee sold itself. However, in the mid 2000s, as part of its ‘Project Energise’ program, 7-Eleven Australia embarked upon a campaign to reinvigorate the Slurpee brand by capitalising on Slurpee’s inherent appeal to young people – the next generation of 7-Eleven customers.

Researching the Slurpee brand

Businesses must undertake ongoing market research to keep pace with market trends. The constantly evolving retail convenience sector, as well as the entry of Woolworths and Coles-branded fuel and convenience outlets, meant that 7-Eleven Australia needed to research ways to retain existing customers as well as grow their customer base.

7-Eleven already knew that Slurpee was a destination driver attracting customers into the store. Given the product’s iconic status, they embarked upon a quantitative and qualitative market research campaign to discover customer perceptions related to the Slurpee brand.

One of the strengths of 7-Eleven’s retail operations system is its in-built capability to monitor sales in real time. This quantitative research tool allows sales levels for particular products to be tracked on a daily and even hourly basis. Using this information 7-Eleven Australia built a clear picture of current sales patterns and consumer behaviour.

• Overall Slurpee sales were steady, they were not increasing
• Each store sold an average of 60 units a day but with little annual growth
• Sales of Slurpee grew from Wednesday, peaked on Friday and remained high into the weekend
• The majority of Slurpee customers tended to arrive after school hours, with most sales occurring between 3 and 6pm
• Consumers preferred to buy larger serves and these were more likely to be bought during the peak time of 4 and 6pm

Other quantitative research reinforced that Slurpee acted as a destination driver. Fifty percent of all 7-Eleven customers reported Slurpee as, “one of the main reasons why they visited 7-Eleven.” In particular 72 percent of those aged 15 to 24 years old reported that the Slurpee was the reason that they visited a 7-Eleven!

Focus groups are an extremely important part of qualitative market research. 7-Eleven used extensive focus group sessions involving those key consumers who were in target segments that purchased the Slurpee. 7-Eleven classifies these segments as the ‘Junior Junk Junkies’, males and females aged between 16 - 21, and the ‘Fast Fixers’, males and females aged between 18 to 35.

The participants were asked a series of questions about 7-Eleven’s Slurpee and other product ranges as well as more general lifestyle information, e.g. what they did in their spare time, their employment, the sorts of food they ate, the music they liked as well as other brands they would use. Focus group interviews help retailers construct a profile of their target demographic and also to gain direct feedback about their customers’ product and purchase experiences 7-Eleven Australia’s market research identified that the target segments identified consisted of customers who were local to the area and that these customers valued freedom, fun, independence and a quick, convenient fast food fix. Consumers of the Slurpee saw it as a treat or a pick-me-up, which was also reflected in the quantitative research that showed that sales peaked after school hours and on Fridays and into the weekend.

One of the main points to emerge from the market research was that customers felt ownership and control of the brand. This ownership was reinforced by the selfservice experience associated with the Slurpee.

7-Eleven has identified four major target segments in its customer profile.

• Fast Fixers: Younger, 18 to 34, more likely to be males in blue-collar employment, SINKs (single income, no kids)
• Junior Junk Junkies (Subset of Fast Fixers): Younger, 16 to 21, SINKs
• Go-Getters: Younger, 18 to 34, more likely to be males in white-collar employment, both SINKs and DINKs (double income, no kids)
• Relaxed Run-Abouters: 18 to 44, more likely to be males in white-collar employment, middle-income families
• In transit top-ups: 18 to 34, more likely to be females, DINKs and younger families.

Positioning the brand

The market research showed 7-Eleven Australia that it needed to “create a connection to the brand not just the product.” Although Slurpee ‘owned’ the frozen carbonated beverage market, the company couldn’t be complacent. 7-Eleven Australia needed to ensure that Slurpee remained a destination brand and that the next generation of 7-Eleven customers was recruited.

The research had revealed that Slurpee belonged to young people and that the act of purchasing and consuming the product was also an experience in itself.

These young consumers were able to choose their own cup, mix flavours, and bang the cup to squeeze a little bit more in, as well as deal with the inevitable BrainFreeze when drinking. These very experiences were found to be at the heart of the Slurpee brand and helped reinforce this youthful vibrant energy far beyond the simple consumption of a frozen carbonated beverage!

This insight directly informed the brand proposition “Slurpee is more than a drink, it’s an experience.”

Bringing the brand proposition to life

A visual identity was created that celebrated the Slurpee experience by bringing to life four things their youthful market generally associated with the Slurpee experience: Cram more in! Brain Freeze! Colour your Tongue! Mix it up! Actual customers were cast as ‘Slurpers’, and quoted to create a new visual language for the brand that was rolled across all brand touch-points, packaging and pointof-sale locations etc.

To deliver this new positioning in-store 7-Eleven Australia set about creating an experience that competitors would not be able to replicate. Core to this strategy was the development of separate Slurpee zones.

These brightly coloured zones allowed customers to create their Slurpee in their own special place within the store and provided a highly visible beacon for the brand. Slurpee zones are an informal gathering point for young people, a place where they could take their time concocting their favourite frozen treat and having fun.

The Slurpee Zones offered their young customers a social experience as well the opportunity to mix flavours and enter prize competitions. These zones also incorporated new display units to encourage co-buying of products such as snacks and confectionery.

In essence, the Slurpee Zone was delivering a retail experience controlled by the customer with the opportunity to add-value beyond a simple consumptive purchase Improving equipment downtime was also a key to driving sales and improving customer satisfaction. A key consumer frustration was the Slurpee machine being broken and therefore 7-Eleven designed and implemented the Slurpee U training program for all franchisees to improve understanding of the brand and ensure consistent delivery in store. Slurpee U is now a key part of franchisee induction.

Marketing and promoting Slurpee

It might have been argued that for many years Slurpee sold itself. However as the retail convenience sector became even more competitive it was vital that retailers developed good marketing, promotional and public relations campaigns.

The promotional strategies included building sales beyond the traditional summer season by introducing ‘shoulder’ (prior-to and afterpeak) campaigns. To drive out-of-season relevance, each shoulder campaign offered a new Slurpee product that had benefits beyond refreshment. These products, including sports and energy versions of the Slurpee, were not only the first to market in their categories, but exclusive to 7-Eleven (see section 6). The shoulder campaign strategy has increased ‘off peak’ sales by more than 200%.

In addition to the shoulder campaigns, 7-Eleven introduced new flavours on a year-round basis. This was a key differentiator from the standard cola and raspberry flavours offered by competitors.

7-Eleven also developed confectionary partnerships with brands that share Slurpee brand values. This encouraged customers to make multiple purchases and further built the Slurpee brand.

A number of campaigns were developed to drive traffic and get people into 7-Eleven stores to specifically get a Slurpee. Theseincluded an annual ‘7-Eleven Day’ on 7th November, when customers can get a free Slurpee at any 7-Eleven store. This promotion has grown from 75,000 giveaways in 2007 to 395,000 in 2009 and has resulted in an uplift in sales for the rest of November. A free small Slurpee was also offered for a limited time with any fuel purchase, recruiting new fuel customers to 7-Eleven and increasing fuel sales.

Adding value through new product development

Given Slurpee’s status as an iconic product, 7-Eleven Australia wanted to truly establish their destination brand by extending the Slurpee range.

Purchasing patterns in the carbonated beverage market are changing with a shift towards diet and sugar-free drinks, increased use of sports and other ‘health’ drinks and an ongoing shift away from full-sugared drinks. According to 7-Eleven’s research, even though the percentage of sales of sugar-free and diet-cola beverages is increasing, the full-sugared Slurpee is still maintaining its market share.

However, to tap into these emerging trends for healthier drink options, Slurpee Juice and Sports Slurpee were launched in 2008. These new products satisfied the growing trends favoured by teens for fruit juices and rehydration drinks and also helped to hold existing customers, as well as attract new customers.

Due to the increased popularity of ‘energy’ drinks, another new product innovation, Slurpee Kick, with taurine, was developed. This Slurpee was firmly positioned as an energy drink in competition with V and Red Bull and targeting a slightly older market segment. Slurpee Kick was supported by an irreverent online campaign featuring ‘Raul the Mule’. The extensive cross-platform campaign took advantage of online social networking sites such as Facebook, Twitter, MySpace, YouTube and more, to create a two-way dialogue with Slurpee Kick customers.

Conclusion

The Slurpee, 7-Eleven’s own proprietary brand, has transcended the frozen carbonated beverage product market and like the Aspirin, Band-aid and Esky has become accepted as the default name for its own product category. As part of its ‘Project Energise’ program, 7-Eleven Australia embarked upon a campaign to reinvigorate the Slurpee brand. One key objective was to take advantage of Slurpee’s inherent appeal to young people, those who were also likely to be the next generation of 7-Eleven customers.

7-Eleven Australia undertook extensive quantitative and qualitative market research to find out exactly what their target demographic of young people, aged 12-25, thought of the product.

The Slurpee revitalisation program resulted in enhanced point-of-sale promotional material and cup design, development of new Slurpee Zones, new product innovations and ongoing promotions, competitions and tie-ins.

After many years with stagnant sales growth, the revitalisation program produced more than 20 percent growth in sales and profit in 2008. The Boronia store alone grew its Slurpee unit sales from 30 to 250 in one single day!

With further product innovations planned, 7-Eleven hopes to be responsible for an ever-increasing number of cases of BrainFreeze for many years to come.