Professor Kenny Herbst Comments on Smithfield Ad Campaign

12.18.2011 Article, Faculty News, General

Smithfield goes whole hog in retro-style ad campaign

Reposted from The Virginian-Pilot | by Philip Walzer

They look like they’re from the ’50s, but they’re appearing on TV screens this month.

Proclaiming “we’re the hosts,” the apron-clad homemakers clap, sing and dance in formation, all to demonstrate their passion for preparing a scrumptious holiday feast.

“We’re not sure how we got the job to serve a big meal,” they sing, “but we’re doing all we can ’cause it’s such a big deal.”

After their number, the camera pans to a close-up of two Smithfield hams. An off-screen announcer says: “The holiday meal is a big production. Make sure the ham you serve can live up to the occasion.”

The retro-style commercial is the most visible – and perhaps most lively – example of Smithfield Foods Inc.’s heightened attention to marketing, which includes an active presence on Facebook and Twitter.

Marketing has become so important to the pork company that its CEO spent nearly five minutes talking about it during Smithfield’s hourlong conference call earlier this month.

“We’re sending ourselves to school,” C. Larry Pope, the company’s president and CEO, said during the call with analysts. “We’re learning this stuff. … We understand now how to talk to the customers and the consumers.”

Smithfield spent $8.5 million more on marketing and advertising during its fiscal second quarter, which ended Oct. 30, compared with the same quarter last year. Overall, it plans to spend about 20 percent more marketing to consumers during this fiscal year.

Pope is counting on a financial dividend: Smithfield is shooting for a 3 percent increase this fiscal year in the volume of packaged meats it sells.

Smithfield recorded 1 percent growth in the pounds of packaged meats sold in its latest quarter, said Keira Lombardo, the company’s vice president of investor relations. Counting just “core brands,” which include Smithfield, Armour and Gwaltney, the increase was 5 percent, she said.

“We’ve got some digging to do as we get through the last six months of the year,” Pope said during the conference call. “We are working on it.” Vicki Bryan, an analyst with Gimme Credit in New York, predicted the strategy would pay off.

“Smithfield seems to be gaining traction already with aggressive marketing campaigns to increase its market presence of key national brands,” Bryan wrote in an email. “This should enable it to sustain volume growth at higher prices, producing higher margins and more stable profits.”

Smithfield’s marketing remake relies on a more “consumer-focused” approach, executives said.

Before, the company thought first about the pig. It designed a cut of meat that it hoped provided the greatest value, sold it to consumers and then asked how they liked it, said Chad Baker, senior vice president of sales and marketing for Smithfield Packing Co., a division of Smithfield Foods.

“We’re starting with the consumer now, and we’re asking them what they need, and we’re developing products to enhance their lifestyles,” Baker said. “Today the consumer is at the front end.”

And Smithfield is trying harder to grab consumers’ attention. The company has produced other musical TV commercials, but the one with the dancing housewives might be its grandest.

“We wanted to create a stronger emotional bond with consumers around the holiday,” said Will Brunt, vice president of marketing. He said the ad cost more than $400,000 to produce.

The large scale of the commercial, which is scheduled to appear through Friday, also “will make it stand out in the clutter of holiday advertising,” Lombardo said.

Kenny Herbst, an assistant professor of marketing at Wake Forest University in Winston-Salem, N.C., said the ad should resonate with on-the-go consumers: “When my time is needed in so many different areas, turning the center-of-plate over to the Smithfield brand is a way for me to concentrate on other details because the brand can carry the confidence, quality, reliability and trust that I am seeking.”

The retooled marketing strategy also supports a growing line of new products.

Another TV commercial this month touted Smithfield Pouch Pack Bacon, a product launched earlier this year, which provides two “stay-fresh” pouches, each containing six bacon slices.

The ad offers a vision of a homemaker luxuriating in convenience. While she makes a sandwich with the bacon, the unused bread automatically reseals itself in its wrapper, as do the lettuce and tomato.

“Pouch Pack Bacon is a whole new innovative product,” Pope told analysts, “but it’s just bacon for goodness’ sake. But customers have recognized Smithfield is presenting them something different.”

The company is seeking inroads in social media, too.

On Friday, it held its second Twitter event of the quarter, focusing on the issue of hunger in the United States. It did not promote the company’s products, but highlighted Smithfield’s donations to the nation’s food banks.

Smithfield launched its main Facebook page – [1] – a year and half ago, Lombardo said. The page has nearly 21,000 “likes.” The company’s recent posts include photos of donations to the needy, dessert recipes and promotions for a contest offering free hams.

“We’re not trying to push product through it,” Brunt said of Smithfield’s approach to Facebook. “We’re letting people know what we’re doing in a soft-communication way, and we’re allowing them to comment on it.”

Smithfield hasn’t ignored its big buyers, such as supermarkets and fast-food chains, in its marketing overhaul.

Senior executives have met with officials at each of its 10 largest retail and food-service customers within the past year and half, Lombardo said in an email. The company also has scheduled more cooking demonstrations and promotions of “bundled meals,” including Smithfield hams, in grocery stores.

“Our focus,” Lombardo wrote, “is on driving Smithfield consumers into our customers’ stores and securing real estate inside their holiday print ads.”

The company’s most recognizable marketing tool won’t change. Paula Deen, the down-home Southern cook, has appeared in commercials, videos, cooking shows and charity giveaways for Smithfield since 2006.

“She’s a great asset to our company,” Brunt said, “and she’s a wonderful ambassador to our brand.”

Pope offered his own marketing pitch, which probably wasn’t in the company’s playbook, at the end of the conference call: “I would expect everyone on this call to be shopping for their sliced hams, and there’s no reason you can’t buy one for your family members and give it as a gift.”