Obama endorses Pickens plan for natural gas vehicles

T. Boone Pickens has spent much of the past three years campaigning for a single candidate: natural gas.

Last week, Pickens scored his biggest endorsement yet, when President Barack Obama expressed support for his idea to convert the country’s heavy-duty vehicles to run on natural gas instead of diesel.

In a speech at Georgetown University, Obama highlighted concerns about pollution from natural gas drilling, but said the domestic fuel could help to achieve a one-third reduction of imported oil over the next decade.

“The potential for natural gas is enormous,” Obama said. “Last year, more than 150 members of Congress from both sides of the aisle produced legislation providing incentives to use clean-burning natural gas in our vehicles instead of oil. And — and that’s a big deal.”

Passing that legislation through the House and Senate would be a political coup for Pickens, who has spent lavishly to promote his campaign through advertising, speeches and lobbying.

It also would boost demand for natural gas, a fuel that America — and, particularly, Texas — has in spades. The Energy Information Administration recently said the U.S. has enough natural gas to supply its needs for 110 years.

Pickens’ own fortune is tied up in natural gas — and he would benefit if the legislation passes. Pickens is the largest shareholder in Clean Energy Fuels, a California company that owns and operates 200 natural gas refueling stations across the country. Clean Energy also owns Dallas-based BAF Technologies Inc., a company that converts vehicles to run on natural gas.

Pickens owns mineral rights on 156,000 acres in Pennsylvania and West Virginia and 30,000 acres in Oklahoma and Kansas, he told reporters Wednesday.

The $5 billion legislation, known as the NAT GAS Act, would provide subsidies to cover much of the cost difference between a natural gas-powered truck and one that runs on diesel fuel. It also would increase the federal tax credit for owners of refueling stations that sell compressed and liquefied natural gas.

Pickens doesn’t deny his financial interest in boosting natural gas use. But he says his plan is the only immediate way to reduce oil imports from the Middle East.

“I haven’t made any money off of any of this yet,” Pickens said.

Pickens said an updated version of the NAT GAS Act would be introduced next week by two Republicans and two Democrats in the House. The bill had 155 co-sponsors last year, including many Democrats.

He cheered Obama’s endorsement, and said he wasn’t disappointed that the president expressed concern about the potential environmental impact of gas drilling. That concern is widespread in the Northeast, where Texas companies are extracting gas from a gigantic shale formation that covers several states.

The Environmental Protection Agency is studying whether a common gas-drilling method, known as hydraulic fracturing, or fracking, could contaminate underground water supplies. Obama said Energy Secretary Steven Chu would work with industry “to improve the safety of this process.”

“I think the fracking issue will clear up on investigation,” Pickens said. “Let’s just let it unfold. I feel pretty comfortable where we are.”

Rising Food Prices Spiking Coupon Use

According to a new survey conducted by Harris Interactive, and commissioned by Coupons.com, rising costs of food are giving Americans sticker shock at the grocery store, and 95% of U.S. adults plan to employ at least one savings strategy at the grocery as a result. And, says the report, consumers, particularly those in higher income brackets, are responding with additional saving strategies.

The survey found that incorporating coupons was the most popular planned activity to off-set rising food prices, followed by other budget-stretching actions:

• Using coupons (72%)
• Comparing unit prices of package sizes (71%)
• Shopping at discount grocery stores (66%)
• Stocking up when items reach rock-bottom prices (64%)
• Buying in bulk (57%)

Steven Boal, CEO of Coupons.com Incorporated, opines that "...(since) food prices are expected to continue to rise this year to potentially all-time highs...consumers are...stretching budgets, and...will take matters into their own hands when it comes to mitigating the effects of higher food costs."

Adults with higher incomes are actually much more likely to pinch pennies than their lesser earning counterparts, notes the study. Households with incomes in the $75 to $100K range were more likely than households that make less than $35K per year to plan to employ saving strategies, including:

• Using coupons (81% compared with 63%)
• Comparing unit prices of package sizes (88% versus 61%)

Additional impacts of budget stretching needs and solutions include:

• Adults with college degrees are not only significantly more likely to plan to use coupons than those without high school degrees (78% vs. 51%), but they also plan to use other savings tactics more frequently, including comparing unit prices (83% vs. 66%) and buying in bulk (62% vs. 42%)
• Women are more likely to use coupons to gain more savings compared to men (78% vs. 66%)
• Women are also more likely to compare unit prices of package sizes over men (75% vs. 67%), and stock up on goods when they reach rock-bottom prices (68% vs. 60%)
• 71% of U.S. adults plan to compare unit prices to get the most out of their grocery budget.
• Adults in larger households (3 or more people) were more likely than those living alone to comparison shop (72% vs. 61%)

(Source: The Center For Media Research, 04/04/11)

QR Codes Gaining Prominence Thanks to a Few Big Players

For years marketers have cited the success of 2-D bar codes overseas and eagerly waited (and waited) for them to take hold in the U.S.

Thanks to prominent endorsements from Target, Best Buy, Macy's and Post Cereals, that day might finally be nearing. Those marketers are placing the codes in front of a broad swath of consumers, while the likes of Home Depot, Visit St. Pete-Clearwater (Fla.) and even real-estate agents are using the codes on plant tags, tourism guides and home listings, respectively.

As the rectangular, pixelated codes become harder to miss, more and more consumers will explore them; meanwhile, major marketers are placing an emphasis on education, a key hurdle to adoption. Whether they'll catch on with consumers is still to be determined, but they'll be prolific enough to be judged on their own merits as a marketing vehicle.

Macy's is behind the most visible QR-education effort, with a 30-second spot now running nationally. The spot, which was cut down from a demo posted to Facebook, YouTube and Macy's own site, shows shoppers how to use the codes and explains what they'll get access to when they scan one with their phone.

The effort is part of Macy's Backstage Pass campaign, which uses QR codes -- or quick-response codes, a form of 2-D bar code -- and SMS texts to give consumers access to videos featuring star designers. It works like this: Shoppers download a QR-code reader, in this case one called ScanBuy. Then, using that reader, they snap a picture of the code, which triggers content to pop up. There are abundant in-store signs and employees are armed with more than 100,000 lanyards containing instructions on how to use the codes.

"We really felt that we needed to educate folks on this," said Martine Reardon, exec VP-marketing at Macy's. "They might not know what to do with it. It's important to tell them."

Though the campaign just launched last month, Ms. Reardon said views on the videos are already quadruple what was expected. "One could say the metric we put out there wasn't aggressive enough," she said. "But we know we're on to something." The Backstage Pass videos have attracted anywhere from a few hundred to a few thousand views on YouTube, with a video featuring Kelly Osbourne grabbing just shy of 3,500 views; the video demo of QR codes has snared 2,200 views.

And as the pace of campaigns picks up, mainstream-media outlets are giving marketers an assist on the education front. In Tampa Bay, Fla., local media outlets have been raising awareness of the codes, with TV anchors scanning them on air as they report on Visit St. Pete-Clearwater's latest campaign.

David Downing, deputy director at the tourism group, said the use of QR codes resulted in the most-successful sweepstakes campaign it's run. More than 20% of the 25,000 entries it received during a four-week period came directly from QR code scans. Mr. Downing said the group had hoped for 8% to 10%. The codes have now become ubiquitous in the group's materials, popping up on nearly every page of the Visitor's Guide.

"We know there's been a learning curve. And we know (2-D bar codes) have been out there and met with some mixed success," Mr. Downing said. "But it really does lend itself so perfectly to what we do. People are moving around a destination from place to place, and they want instant information."

Best Buy, a first mover in the space, added QR codes to all of its product-information tags in the fall. Though it's done little formal education around the codes, it's tough to miss them when you walk into a Best Buy store. Scanning the tag directs consumers to the product-detail page on Best Buy's mobile site. Over time those tags could also point to a video, product ratings or enable the customer to add the product to a wish list.

"It was a little bit of a bet. But it was a good bet to take," said Spencer Knisely, senior director of Best Buy's environmental-design group, of the decision to add the codes to its product tags. "We're fortunate now to see the market catching up....retail is a great place for this. We think of (QR codes) as a personal shopping assistant"

Best Buy has also created a "Live Mobile Scan Map" at bbyscan.com/map which tracks the items scanned in stores across the country. Mr. Knisely said the company has even been experimenting with QR codes as a polling tool. A sign hanging in Best Buy headquarters asks employees to scan a code corresponding with how they're feeling. One code is positioned inside an image of a thumbs up, the other a thumbs down. When the code is scanned, employees see how many others are in a good or bad mood. Mr. Knisely says that sort of tool could be used to ask customers about their experience in the store.

It will also be hard to miss the codes in the cereal aisle, with Post's Honey Bunches of Oats adding them to more than 12 million boxes. The brand is banking on QR codes as the primary distribution vehicle for "Honey & Joy," a web-based sitcom that will premiere exclusively on Jesta Digital's mobile-web platform BitBop. Katie Lay, Honey Bunches of Oats' brand manager, cited research that showed the demand for QR-code experimentation outstripping the supply, particularly among the cereal's target audience of women ages 25 to 54. The brand found that a third of its target is looking for the codes, Ms. Lay said.

But even as the codes catch on, there's still a long way to go for them to have the kind of broad-scale adoption that major brands expect out of their marketing vehicles. And marketers are well aware, the campaigns are not foolproof. Poor internet connection, slow load times and outdated phones all contribute to an inconsistent experience for consumers. Persuading consumers to download mobile apps that can scan codes has been another major obstacle for QR-code campaigns, said Laura Marriott, CEO NeoMedia, a QR agency and tech company. That's assuming consumers already know what to do when they see the codes. And then there's the fact QR codes can seem like a hassle -- any extra step a campaign requires typically reduces response rates.

For those reasons, Julie Ask, VP-principal analyst at Forrester Research, says there's no rush when it comes to 2-D bar codes, though the environment is ripe for experimentation. "It's interesting. It's growing. And the analytics are good," she said. "There's no doubt that people are going to use their phones to engage more with the physical world. But there's a lot of different ways you can do that....marketers are still mostly in the experiment stage and learning."

(Source: Advertising Age, 03/21/11)

Are Digital Marketers Ignoring Baby Boomers?

Boomers' lives are going in many different directions, as empty-nesters, step-parents, grandparents and caregivers. For all of these roles, the Internet and digital media are absolutely essential.

eMarketer estimates 78.2% of this cohort is online, nearly 60 million adults. Even as their numbers decline, that penetration rate will remain high through 2015. And they control more than $2 trillion in annual spending.

"The baby boomers grew up being chased by marketers and advertisers that tailored products and brands to appeal to them," said Lisa E. Phillips, eMarketer senior analyst and author of the new report, "Digital Lives of Boomers: Reaching Them Online." "Now the median age of this cohort is 55, and many boomers feel as if they have dropped off many marketers' radar."

Boomers spend more time and money online than any other demographic. Younger boomers (ages 47 to 55) spent an average of 39.3 hours online per month in 2010, according to the Pew Internet & American Life Project. Older boomers (ages 56 to 65) averaged only slightly less, at 36.5 hours. A lot of that time was spent shopping -- and buying. Forrester Research reported that boomers spent an average of about $650 online over a three-month period in 2010, compared with $581 by Generation X internet users (ages 35 to 46) and $429 by Millennials (ages 18 to 34).

Boomers also stay connected on the go. eMarketer estimates 86.9% will have a mobile phone this year, and 16.9 million boomers will access the internet from a mobile browser or installed app. In 2015, that number will reach 25.4 million, or nearly 40% of boomer mobile users. This is a market that content providers, game publishers and brand marketers should not pass by.

Marketers who widen their messages to include boomers would be wise to make their efforts ageless, rather than targeted at an older set.

"Boomers are immediately turned off by association with old age, infirmity and decline," said Phillips. "Most brands do not want to 'age' their products with blatant appeals to older consumers. The win-win is to create an overarching brand message that gives a nod to boomers, but also includes younger adults and even grandchildren."

This often means turning a negative -- fears about failing health, for example -- into a positive, such as showing the benefits of products that contribute to a healthy lifestyle.

(Source: eMarketer, 04/04/11)

Study: Americans Hate Faux Green Marketers

While Americans are more than willing to forgive a company with a less-than-perfect environmental track record, 71% say they will stop buying a product if they feel they've been misled about its environmental impact, according to the latest Green Gap Trend Tracker from Cone. And 37% say they are so ticked off by the practice that it's grounds for completely boycotting the company and all its products.

Cone, a Boston-based cause-related marketing firm, says there is also a growing perception that it's tough for a company to get it right every time, with 75% saying it is okay if a given brand isn't environmentally perfect, as long as it's honest and forthcoming about its efforts.

But consumers continue to give marketers poor marks on those communication efforts, with 79% wishing there was more detail on packaging, 75% longing for companies to explain the environmental terms they use, and 59% believing that marketers shouldn't use such claims at all unless they back them up with more details and explanations.

Cone also reports that consumers continue to misunderstand the most common marketing buzzwords, such as "green" or "environmentally friendly." While 97% think they know what those phrases mean (up from 90% in Cone's 2008 survey), 41% believe these terms mean a product actually has a good or beneficial impact on the environment. Only 29% get that those phrases words mean less harmful than competing products.

Consumers are also suspicious: 57% mistrust green claims.

The survey, which included 1,035 adults, also tested three separate marketing methods, asking customers to "purchase" brands that either bore a mock certification, a vague "made with natural ingredients" claim, or an even vaguer "made with...imagery" claim.

The certification was by far the most popular, chosen by 51% of respondents, with 51% of all respondents believing the claim was then reviewed and verified by a credible third party.

The study also shows that green concerns survived the recession. Some 39% say they think about the environmental impact of their shopping at least sometimes -- up from 36% in 2008 -- and 23% say they do so regularly (up from 21%). Only 11% say they never think about it, down from 15%. Only 8% say it's on their mind every time they shop (down from 9%.)

(Source: Marketing Daily, 03/25/11)

Cars That Could Rally While Japan Recovers

When General Motors and Chrysler declared bankruptcy in 2009, it was obviously bad news for them -- but a boost for competitors, who picked up market share as car buyers fled the two damaged brands.

The American carmarkers now have a chance to gain back a bit of that turf. The devastating earthquake in Japan was obviously an act of nature -- not a man-made debacle, like the mismanagement of the two American automakers was -- but it has left Japanese automakers reeling all the same. A few assembly plants were damaged, while others are operating fitfully on account of power rationing. Perhaps most pernicious is the damage done to several parts manufacturers in the quake zone that supply paint, electronics, and other key components for many Japanese cars -- and some American ones as well.

For most models, there's typically at least two months' inventory in the pipeline, which is why there have been no shortages so far. But as Toyota, Honda, Nissan, and other Japanese automakers gauge the damage, they've begun to ration parts, slow production, and take other measures to adjust. For the most popular cars or those already low on supply, that could lead to shortages of some models in coming weeks, or price increases as dealers and customers anticipate shortages.

Many Lexus, Acura, and Infiniti models could be affected, since a lot of those were in relatively short supply to start with. At Toyota, slowdowns could affect supplies of the Prius hybrid, Corolla compact, RAV4 crossover, and possibly the larger Highlander crossover. Honda could run short of the Insight and CR-Z hybrids, the Fit subcompact, and possibly the CR-V crossover. Disruptions at Nissan could affect the Rogue crossover and 370Z sports car. Many models produced by Mazda, Subaru, Suzuki, and Mitsubishi will also be affected, and shortages could affect more models the longer they drag on.

Competitors won't gloat, and they may not even try to take advantage of Japan's woes. But they won't turn down buyers who can't find a competing Japanese model, either. To determine which models could benefit if the Japanese problems persist, car-shopping site Edumunds.com was asked to identify competing vehicles buyers tend to "cross-shop" when they're primarily interested in one of the quake-curtailed Japanese models. Here are 20 models that stand to benefit from Japanese supply problems:

Audi A5. This stylish German coupe competes with Japanese mid-luxury makes like the Lexus E Class and the Infiniti G. It's not the fastest two-seater, but with gas prices on everybody's mind, decent mileage gives it a bump.

BMW 3 series. Some arrivistes shun the predictable panache of a BMW, yet the 3 series remains a standard-setter -- and an easy backup choice for anybody unable to find the Lexus, Acura, or Infiniti they want.

Buick LaCrosse. GM's near-luxury division has made a nifty comeback, and many reviewers rate the LaCrosse sedan above competing imports that cost more. It's another model that could draw buyers from Lexus, Acura, and Infiniti.

Chevrolet Cruze. Chevy has finally built a compact that appeals on quality, not price, which gives the Cruze a chance to snatch sales from the Toyota Corolla, Honda Civic, and even the sporty Mazda3.

Chevrolet Camaro. It's a muscle car, not a luxemobile, but Edmunds' data shows that the Camaro is one of the top three alternatives considered by buyers checking out the Infiniti G class coupe. GM would welcome the chance to convert a few import buyers.

Chevrolet Equinox. GM's solid crossover is the top-ranked model on U.S. News's list of affordable compact SUVs. Skeptics who remain devoted to the Toyota RAV4, Honda CR-Vm or Subaru Forester may now have a reason to check it out. (The GMC Terrain is nearly identical.)

Chevrolet Traverse. This popular, seven-passenger crossover (similar to the GMC Acadia and Buick Enclave) debuted in 2008 and is starting to seem a bit dated. But a shortage of competing models like the Toyota Highlander or Mazda CX-9 could give it a second wind.

Ford Edge. This crossover is one of Ford's older models, although Ford has freshened it with new electronics, including its Sync hands-free system. That could pay off if fans of the Highlander or Nissan Murano can't find what they want, and head for a Ford dealership.

Ford Explorer. Ford moved away from trucky underpinnings when it redesigned the new Explorer, producing a smooth-riding winner that's the top vehicle in its class in the U.S.News rankings. Toyota in particular could lose some customers if the Highlander becomes scarce.

Ford Fiesta. This subcompact has been another hit for Ford, garnering another No. 1 ranking in the U.S.News rankings. Among Edmunds' shoppers, it's the top alternative to the Honda Fit, and a tough competitor to the Nissan Juke and Toyota Corolla.

Ford Focus. This newly redesigned compact is meant to one-up the reliable but bland Corolla and Civic with crisp European handling, MPG in the mid-30s, and trendy electronic options. If the competition runs short, the Focus might do just that.

Ford Fusion hybrid. It's more luxurious and expensive than the Prius hybrid, but it's also one of the top alternatives considered by Prius shopper on Edmunds. If Japanese hybrids dry up, the Fusion is one of the few choices left. The Fusion hybrid may also depend on some scarce Japanese parts, however, so buyers should keep an eye on availability.

Hyundai Genesis. This upscale Korean-made coupe and sedan have already been making nice gains against the Japanese luxury brands, offering more luxury for less cash. With Hyundai hot, that trend could intensify.

Hyundai Elantra. This newly redesigned compact aims to nibble away market share from the Corolla and Civic. Hyundai might get a bigger mouthful than it expected.

Hyundai Sonata. The Korean automaker hit a home run with this nimble, affordable sedan that gets the best mileage in its class. It's aimed squarely at the Toyota Camry, Honda Accord, and Nissan Altima, which are all built in the United States but depend upon parts shipped from Japan that could run scarce. (The Sonata is also similar to the Kia Optima.)

Jeep Compass. It's not as rugged as you'd expect for a Jeep, but the Compass shows up as one alternative considered by shoppers interested in the Juke and Rogue. Improving performance by parent company Chrysler may make buyers more confident in the company's offerings.

Kia Sorento. This Korean model earns good reviews and has an optional third-row seat, which is rare for mid-sized crossovers. That makes it a strong competitor to the Highlander and RAV4, along with the smaller Rogue.

Kia Sportage. This smallish crossover competes with the Juke, Rogue, RAV4, Subaru Forester, and other Japanese models, often undercutting them on price.

Mini Cooper. It hasn't been significantly updated in years, but the modish Mini Cooper still offers a jazzy ride and great mileage, making it an able alternative to the newer Juke, Rogue, and Fit.

Volkswagen Jetta. Critics have dissed its dull styling, but the Jetta remains a good value with mileage and features comparable to the Insight, Corolla, and Subaru Impreza. But any sales gains will be a gift the Japanese come to reclaim once the earthquake damage is repaired.

(Source: U.S. News & World Report, 04/01/11)

The Fastest-Growing Restaurant Brands

Five Guys Burgers and Fries was the fastest-growing restaurant chain in 2010, a year marked by a return to sales growth by the nation's biggest brands, according to market research firm Technomic Inc.

Systemwide sales at the 500 largest chains in the United States rose 1.8% to $234 billion in 2010, after falling 0.8% to $230 billion in 2009, the firm found in its annual Technomic Top 500 report.

More than half the foodservice chains included in the Top 500 recorded sales increases in 2010, Technomic said. Only 231 chains reported annual sales declines last year, compared with 283 chains that posted sales decreases in 2009.

"We are pleased to see improvements in the U.S. economy begin to translate into improved performance for the leading restaurant chains," said Ron Paul, president of Technomic. "The industry has a lot of ground to recover and still faces many challenges. But our latest findings on 2010 chain performance are certainly encouraging."

Fast-casual and limited-service sandwich chains continue to be among the fastest-growing restaurant brands in the country. Among chains with at least $200 million in annual sales, Five Guys Burgers and Fries grew the fastest in 2010, with sales up 38% to an estimated $625 million and a 35% growth in units. Jimmy John's increased sales 22% to an estimated $735 million and increased its store count by 20%. Fast-casual heavyweight Chipotle Mexican Grill grew sales 21% to $1.83 billion and expanded its store count by 14%.

Rounding out the top 10 fastest-growing chains in 2010 were BJ's Restaurants (20% growth in sales to $514 million), Yard House (18% growth in sales to $216 million), Cheddar's (14% growth in sales to $309 million), Buffalo Wild Wings (14% growth in sales to $1.712 billion), Firehouse Subs (14% growth in sales to $235 million), Noodles & Co. (14% growth in sales to $261 million), and Panda Express (13% growth in sales to $1.404 billion).

In all, the top 10 fastest-growing chains increased sales 18% to $7.8 billion and expanded their collective system size 14% in 2010, Technomic found.

Technomic noted that 2010 was a comeback year for the steak category, which went from a 6.4% sales decline in 2009 to a gain of 2.2% last year. The firm said the sector's sales turnaround outperformed the full-service category's average annual performance. Headwinds remain for steakhouses, however, in the form of slowed unit expansion, restaurant closures, and a decrease in traffic and average check.

Several other segments stood out in the report, Technomic said, including limited-service Asian, which increased sales 9.3%. Other fast-growing sectors were limited-service pizza, doughnut, and coffee and other beverages, led by sales growth of 7.8% at Pizza Hut, 6.1% at Dunkin' Donuts and 8.7% at Starbucks, respectively.

As a whole, limited-service sales increased 2.5%, Technomic found.

The world's two biggest restaurant chains, Subway and McDonald's, each posted healthy sales gains for 2010. McDonald's revenues increased 4.4% to $32.4 billion, while Subway's 6% growth to $10.6 billion outpaced the 1.8% sales increase of its other sandwich category.

Those two quick-service powerhouses, as well as competitors like Wendy's and Yum! Brands Inc., have expressed aggressive international-growth goals, and Technomic's research indicates that foreign markets hold significant sales growth potential. The top 500 chains' international-sales growth outperformed their collective domestic business in 2010. International sales were up 3.1%, compared with 1.8% in the United States, while unit expansion abroad was 3.7%, compared with 0.5% growth in the United States.

(Source: Nation's Restaurant News, 03/14/11)