<%@ Language=VBScript %> <% CheckState() CheckSub() %> Le Creuset: A Recipe for Success
IPA

IPA Effectiveness Awards

1992

Institute of Practitioners in Advertising, 44 Belgrave Square, London SW1X 8QS, UK
Tel: +44 (0)171 235 7020  Fax: +44 (0)171 245 9904

Agency: Saatchi & Saatchi Authors: Alexandra McKie and Paul Hammersley

Le Creuset: A recipe for success

 

Ingredients

A great product

A strong heritage

A new marketing strategy

Distinctive advertising

 

Stir well and leave to simmer...

A GREAT PRODUCT

Le Creuset has been perfecting the art of casting iron for centuries: it began by making cannon balls in the 14th century and diversified into cooking pots some time in the mid-15th century.

Le Creuset was introduced into the UK by Elizabeth David in the 1960s in her books on provincial French cooking. Despite a strong following, the brand has remained a well-kept secret. In France, Le Creuset is positioned as an everyday product and is present in around 75% of households. In the UK the brand is too small to be accurately monitored but household penetration is thought to be around 5%.

The company was taken over in 1989 and Saatchi & Saatchi was appointed as advertising agency. At this time there was relatively little information about Le Creuset and its buyers and one of the tasks has been to build a clearer picture of this sector of the cookware market.

The total cookware market is relatively small with annual sales of around £164 million. It tends to be a low-interest, and infrequently purchased category – less than 8% of households buy cookware in any given year, and only 1.4% of households spend more than £50 – not difficult if you are buying Le Creuset. This makes our target audience extremely small and discrete.

The challenge of producing advertising for Le Creuset has been how to reach these people effectively on a small advertising budget and, still more challenging, how to measure the effects of the advertising without prohibitively high costs.

A STRONG HERITAGE

Although less well known than other brands of cookware, Le Creuset has a unique position in the market. It has a core of loyal and enthusiastic owners who see it as reflecting their attitudes towards cooking and their personality and individuality. Among owners, Le Creuset is seen as a classic French product, a product of extremely high quality and durability used by 'serious' cooks – the definitive cooking tool.

A NEW MARKETING STRATEGY

Le Creuset had been a family company run along the same lines for many years. With new ownership came a new approach. The primary aim was to improve the profitability of the brand. Le Creuset has always been more expensive than other brands of cookware, however the challenge was to use advertising to add to the desirability of the brand, thereby enabling the premium price to be increased, and to maximise the profitability of the brand. Although sales volumes in the UK are much lower than those in France, the higher prices mean that the UK is on a par with France in terms of revenue and profit.

Le Creuset was under increasing pressure from the competition at both the top and bottom of the market. The mainstream cookware brands saw Le Creuset's high pricing as an opportunity, and there was an increasing number of small designer cookware brands coming onto the market and adding pressure from the top.

Le Creuset has always been a rather exclusive 'club' and while we wanted to maintain the 'specialness' of the brand there was a need to reveal the secret to a slightly wider audience and attract new owners into the brand as well as encouraging existing owners to buy more pieces.

Identifying the target audience

In the course of creative development we carried out qualitative research which identified three target groups in terms of their attitudes to the brand. Members of the most important group were dubbed 'Intellectual'. These women bought Le Creuset for both rational and emotional reasons and the choice of Le Creuset was important in terms of how they saw themselves as cooks. Although nouvelle cuisine was still lingering in the late 80s the Intellectuals would have none of it. For them food and cooking was about sociability, still rooted in French provincial cooking – the finest ingredients simply and well prepared, but with the minimum of fuss. The authenticity and traditional image of Le Creuset meant that no other brand could compare.

The Intellectuals were also very demanding about advertising – they wanted advertising which reflected their feelings about Le Creuset. They responded well to the creative idea, liking the wit and subtle tone of voice as well as the dramatic and distinctive visuals.

The second group – Pragmatists – bought Le Creuset for more rational reasons: its high quality, durability and energy efficiency. They were still very enthusiastic about the brand but less concerned with its emotional values, and they were also an important target audience for the advertising.

The third group – Nouveaus – were buying Le Creuset for its 'badge' values. Often not interested in cooking at all, they were buying Le Creuset and leaving it on show in kitchens that were rarely used. This group was not a primary target for advertising – what its members aspired to would alienate the Intellectuals.

DISTINCTIVE AND POWERFUL ADVERTISING

Role for advertising

To increase the price premium whilst holding volume by:

The creative strategy

The advertising needed to create a distinctive look for Le Creuset – the brand is seen as slightly quirky and, in order to appeal to the Intellectuals, it was important to produce advertising which was different and reflected the unique values of Le Creuset.

The 'volcanic' orange colour was an essential part of the branding. Many people are wary of asking for Le Creuset by name as they are unsure of the correct pronunciation and the distinctive orange colour identifies it for many people.

The advertising sought to use the colour both as a branding device and as a way of standing out in the press.

It was felt that the 'infernal' atmosphere of the Le Creuset foundry was unique and would stand out from conventional advertising images for cookware products. Sebastio Salgado agreed to take photographs in the factory showing the care and craftsmanship that goes into every pot. At the time he was working on a project capturing the end of the industrial era and felt that the Le Creuset factory embodied traditional industrial manufacturing.

The media strategy

With a budget of around £200,000 women's magazines were chosen as the best medium. In terms of defining the target audience it was felt that attitudes would be more useful than demographics and TGI Lifestyle questions were used to identify the core group.

A cluster was developed, approximating most closely to the Intellectuals and Pragmatists, which included women who enjoyed owning good things, felt the kitchen was one of the most important rooms in the house, who liked cooking and entertaining and who used magazines to get ideas for the home.

A shortlist of publications was identified which included quality monthly magazines, some general-interest titles such as BBC Good Food Guide (see Appendix).

LEAVE TO SIMMER

The campaign began in September 1989 and reactions to the advertising from the salesforce and trade were positive. General feedback about the advertising was good and sales were growing at a healthy and profitable rate despite the economic slowdown.

Results of advertising tracking in March 1990 were disappointing. Despite still increasing sales, awareness had not risen. We searched for an explanation – feedback had been very positive, the ads were liked, we had won a number of creative awards (encouraging, as people working in marketing and advertising were part of the core target audience) and the salesforce was getting a favourable reaction from the trade. We felt that the problem might be one of measurement rather than advertising.

The trial of working on small brands (one which most entrants in this category will have faced) is the lack of information. With Le Creuset this was compounded by the fact that we had a small and discrete target audience – trying to find enough of these people would make the research prohibitively expensive.

In quantifying the effects of the advertising we have discovered two factors which are important and which we have tried to take into account. Firstly, the number of Le Creuset owners within the sample.

Owners of a brand always tend to have a more positive image than non-owners (this tends to be particularly marked in high-image durables markets such as cars and, we suspected, exclusive cookware). Le Creuset owners are such a discrete group of people that the cost of finding the same proportion of owners in each wave of research was prohibitively high. For comparability we have kept our sample the same (ABC1 25–54 year old women) but have weighted the figures to allow comparison based on an equal number of owners in each phase of the research.

The second factor was measuring the advertising effect among people who have had the opportunity to see the advertising. The coverage of the magazines we used is relatively small, but matched to the needs of our target audience. In order to assess the effect of the advertising among the people who read these publications we included a question on readership in the two phases of research in 1991. This enabled us to identify the effects of the advertising on the readers of the specific publications used, as well as the total sample. As expected, the increases in awareness and image are higher among the core audience than the total sample.

REFINING THE RECIPE

In April 1990 there was a sudden influx of information. We carried out qualitative research to try to understand how people were responding to the advertising. Reactions were very positive, owners were particularly enthusiastic, feeling that the advertising represented everything they wanted to believe about the brand – distinctive, sophisticated and unusual. The appeal of the creative executions varied, with Intellectuals liking the more demanding executions and Pragmatists liking the slightly more direct approach. Even the Pragmatists waxed lyrical: the advertising added an emotional edge to their rational demands. They felt that it showed the care that went into making the pots and this reflected the care they put into cooking.

The recipe analogy of Casserole Provençale worked well among all groups and another execution following a similar format was developed (Classic French Cooking). These were run in publications read by the Pragmatists, such as Good Housekeeping and Country Living. The more arcane executions, such as Pot au Feu, were run in publications which the Intellectuals read – the Independent on Sunday and Times reviews, GQ and Opera Now.

Placement of the ads was also changed. We had been placing them in cookery editorials feeling that this would be the most relevant environment. However as this was towards the end of the magazine it tended to have a more practical orientation so, from mid-1990, the ads were placed in the first half of the magazines among the more image-orientated advertisements.

Finally the graded orange colour was working well as a branding device. However on some executions this was being hidden by the pictures. The colour was adjusted and a Le Creuset cocotte was added to improve branding further.

In April 1990 we received the initial feedback on the newly introduced guarantee cards. This was very encouraging in that it showed that 47% of people who had returned their cards were first-time buyers fulfilling our objective of widening the appeal of the brand. What they also showed was that the profile of owners was even more upmarket and affluent than we had realised.

Taking all this information into account we looked again at the list of publications and focused on the more upmarket titles. So, with slight changes to the ads and a refined list of publications, the campaign continued. A further wave of tracking in January 1991 showed that awareness had increased substantially – the refinements had had the desired effect.

THE PROOF OF THE PUDDING – FULFILLING THE OBJECTIVES

The objective was to maintain sales whilst increasing the price premium by ensuring that the advertising kept Le Creuset front of mind, reinforced its unique brand values and status encouraged both existing and new owners to buy Le Creuset.

(In order to maintain confidentiality all sales figures have been expressed as an index based on September 1989 when the advertising began. There is no consumer sales data and therefore we have had to use shipment data and, as this varies from month to month because of trade ordering patterns, we have shown all the figures as moving annual totals.)

Table 1 shows total advertising expenditure for Le Creuset as a moving annual total.

TABLE 1: ANNUAL SPENDS

     

1989

1990

1991

63,000

248,000

164,000

Source: Zenith

In mid-1991 we developed a tactical campaign using small spaces to announce some of the new products, but this campaign was not designed to build brand image and therefore remains outside the scope of this paper.

Maintaining sales at a higher relative price

The role for advertising was to make the brand so desirable that we could maintain (and hopefully increase) sales at a premium price, thereby increasing the profitability of Le Creuset.

This has been achieved. There was steady growth, strong in 1990, and rather slower growth in 1991.

Profits for the Le Creuset have grown consistently. The Financial Times, reporting on profits for the year ending 31 December 1991, said 'Despite the recession, Le Creuset produced a 5.1% increase in pre-tax profits.' The headline in The Times was 'Le Creuset beats squeeze on spending'.

Research showed that there was a strong link between advertising and sterling sales – the correlation between sales and advertising was 80%. There was a slight lag but, as the sales figures are shipments, this may reflect the time taken to get on to the shelves. During the recession the time lag between ordering and appearing on the shelves was reduced as retailers tried to minimise stock levels. Unfortunately it is not possible to put an accurate time on it.

People remembered the advertising

Among our core target audience the increase is sales is matched by a rise in advertising awareness (Table 2).

TABLE 2: ADVERTISING AWARENESS

       
 

Total

ABs

Owners

1990

4

3

8

1991/1

8

11

15

1991/12

7

10

12

Source: RSGB

The total scores may appear low, but this is an eternal problem for press when compared with levels of awareness generated by television advertising. As stated earlier our concern was that many of the people on our tracking study were not really in the target audience but, for the sake of comparability, we did not want to change the sample. An additional question on readership showed that only 23% of the total sample regularly read any of the publications (more than 50% of Le Creuset owners did). Awareness of the advertising among those who said they read any of the publications was much higher at 37% – a high figure for a press campaign on a limited budget.

Volume sales

Whilst the revenue generated has increased steadily, sales volume dropped back in 1991. To a certain extent this may be a result of our success. Sales of sets rose considerably in 1991 – according to Le Creuset shipment systems these would be counted as one unit, but obviously generate high revenue and were being bought by new owners.

Two other factors appear to explain this decline – lower advertising spend and a fall in consumer spending.

In 1990 the economic slowdown began to hit the housing market and consumer spending on durables declined swiftly. Total cookware sales declined by around 8% in 1990 but, despite its increasing price premium, Le Creuset continued to grow. However, in 1991 the recession became official – consumer spending fell across all categories.

The combined effect of a fall in consumer spending and less advertising meant some fall back in volume sales. There are indications that the cookware market is very responsive to advertising. As a low-interest category this is not surprising – advertising acts as a trigger to bring people into the market.

Increasing the saliency of Le Creuset

Brand awareness of Le Creuset has risen. The first column of Table 3 shows spontaneous brand awareness for the total sample, the second column shows weighted figures taking into account the number of owners and the third column shows awareness among current owners of Le Creuset.

TABLE 3: BRAND AWARENESS

       
  Total Weighted for % of owners Current owners
  % Index %

1989

19 91 60

1990

15 88 64

1991/1

17 113 72

1991/12

20 112 61
Source: RSGB

Le Creuset as the ideal choice

One of the objectives of the advertising was to maintain the cult status of the brand and to reinforce the perception of Le Creuset as the definitive cooking tool.

When asked to rate which brand of cookware would be their ideal choice Le Creuset is mentioned by more people than any other brand. Interestingly all competitive brands have seen declines in ratings on ideal choice. It appears that, without advertising support, the brands fade from memory.

Attracting new owners

Analysis of the guarantee cards received up until January 1991 showed that almost half (48.7%) were first-time buyers of Le Creuset. The proportion of first-time buyers was highest among the under 35s where 55% had bought Le Creuset for the first time.

An added bonus was the fact that many of these new owners were starting their collection with sets rather than individual pieces, thus increasing revenue.

TABLE 4: IS THIS THE FIRST PIECE OF LE CREUSET YOU HAVE OWNED?

         
% Total Under 35 35–44 45+
Yes 48.7 54.9 42.9 45.3
Source: NDL

HIDDEN INGREDIENTS – WHAT OTHER FACTORS COULD HAVE AFFECTED SALES?

Sector growth

This has not been a factor in explaining the increase in Le Creuset's sales. In fact the cookware market, like most consumer durables, was affected badly by the recession. Household products went into recession before the general economy slow down with the decline in the housing market. Le Creuset has been one of the more successful brands in the sector. The results from our tracking also seem to indicate that interest in the sector as a whole has fallen among consumers since the heady shopping days of 1989. On all questions, scores have fallen, with a higher proportion not answering. Cookware has never been something to set the soul on fire and has been one of the easiest areas in which to curb expenditure, and therefore it seems to disappear from memory completely.

Price

It would have been possible to generate increased sales by reducing prices but, in line with the strategic objectives of increasing the premium pricing of Le Creuset, prices have in fact increased consistently throughout the period. This has, of course, accounted for a substantial part of the increased value of sales. 1991 saw a decline in the sales volume for Le Creuset, but the primary objective of maintaining profit, rather than gaining market share has been achieved.

Distribution

There have not been significant increases in Le Creuset's distribution and so this could not explain the growth in sales. There had been some improvements in the depth of stocking of the range of products, but this could not account for the increase in sales.

The client feels that the advertising was an important factor in persuading the trade to continue to stock Le Creuset during the recession when retailers were trying to reduce their stock levels.

Information from guarantee cards showed that 75% of people had bought from either department stores or specialist kitchen shops – where Le Creuset has always had good distribution. A further 10% of people said it was a gift and they did not therefore know where it was bought. There is no evidence to show that distribution has had an effect.

New products

New products have been added to the Le Creuset range and, while they have created interest in the brand, most sales are from the traditional lines. The top 20 lines are the long-established products and account for more than 70% of sales.

Competitive activity

Advertising expenditure for competitive cookware brands was cut in 1990, apparently due to the pressures of the recession. Therefore Le Creuset was the major voice in advertising in 1990 – the time when it saw the greatest increases in sales in terms of both value and volume.

TABLE 5: LE CREUSET – SHARE OF VOICE

     
1989 1990 1991
10 50 25
Source: Media Register

Competitors began to advertise in 1991, but according to our tracking study, with little effect.

CONCLUSION

In announcing its profits Le Creuset was quoted in the press as saying: 'We continued to advertise in the recession when others stopped; we believe that it works. We have kept our presence in front of the consumer.' Despite the recession which has hit consumer confidence badly, the profitability of Le Creuset has been improved, its exclusive image is strong and has improved whilst the competition has weakened. The main explanation of Le Creuset's success would appear to be the advertising, other factors do not give an adequate explanation. We believe that, after a few refinements, we have a recipe for success and that this case is a good example, not only of effective advertising generating increased profits, but also of the benefits of continuing to advertise through a recession.

APPENDIX

The advertising launch for Le Creuset commenced in October 1989 with a burst in consumer magazines selected for their coverage and cost-efficiency against consumers who agreed or tended to agree with all the following statements:

'I enjoy entertaining people at home'

'I really enjoy cooking'

'I'd rather have one good thing than lots of cheap things'

'I enjoy owning good things'.

A total of c. £240,000 was spent between October 1989 and June on the following schedule (Table 6).

TABLE 6

   
Publication No. of insertions
Sunday Express Magazine

1

Cosmopolitan

2

Observer Colour Magazine

1

Good Housekeeping

3

You Magazine

1

Let's Cook

1

Homes and Gardens

1

Options

1

House & Garden

2

Prima

2

Ideal Home

2

Vogue

1

Country Living

2

Women's Journal

1

Elle

1

New Woman

1

Country Homes and Interiors

2

BBC Good Food

3

House Beautiful

1

Marie Claire

2

Elle Decoration

1

The second burst of advertising commenced in October 1990 and a sum of £112,000 was spent before the tracking study was conducted in January 1991. The schedule bought during this period was as shown in Table 7.

TABLE 7

   
Publication

No. of insertions

Country Living

3

Good Housekeeping

3

Marie Claire

3

Homes and Gardens

2

Independent on Sunday Review

1

Times Saturday Review

1

World of Interiors

1

Opera Now

1

Sunday Correspondent Magazine

1

Activity continued from January through to June in the following titles:

TABLE 8

   
Publication

No. of insertions

Country Living

3

Good Housekeeping

1

Marie Claire

1

Independent on Sunday Review

2

Times Saturday Review

1

Metropolitan Home

1

GQ

1

Opera Now

2

Punch

1

Elle Decoration

1

 



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