Marketing Campaign Case Studies

Tuesday, June 10, 2008


In 2002 CVS Corporation’s drugstore chain, CVS/pharmacy, was approaching its 40th anniversary, and as a result of steady growth it was nipping at the heels of the nation’s number one drugstore chain, Walgreens. Although much of CVS’s growth had been the result of acquisitions and was limited to specific regions of the United States, including New England and the Northeast, the drugstore chain was planning a push for national expansion. To reach consumers in markets where CVS was a new face as well as to enhance its brand image in areas where consumers were familiar with the chain, CVS turned to its advertising agency, Boston-based Hill, Holliday, Connors, Cosmopulos (often called Hill Holliday). The campaign Hill Holliday created, ‘‘Life to the Fullest,’’ was CVS’s first national campaign. It was designed to enhance the company’s brand image as well as shift its marketing focus from products to consumer lifestyles. A budget was unavailable, but CVS typically spent about $35 million a year on advertising. Included in the campaign were television spots that aired on cable and network channels that had a large female audience. Print ads also appeared in People magazine, which had a high female readership. Both print ads and TV spots featured people in environments such as a living room, a restaurant, and a public restroom, but with store-aisle markers hanging over their heads that listed each person’s recent purchases and the benefits of buying the items at a CVS store.
While the campaign failed to garner any industry awards, it did capture the attention of consumers. Following its launch CVS reported an 8.7 percent increase in sales over the previous year and a 73 percent jump in net income for the same time period. Hill Holliday’s efforts on behalf of the drugstore chain were recognized by the magazine Advertising Age, which named the company one of its Advertising Agencies of the Year for 2002. Praise for the campaign also came from Adweek. The magazine described one television spot as a refreshing change from the routine ‘‘ho-hum’’ advertising in the retail-beauty-products segment.

When Ralph Hoagland and brothers Stanley and Sidney Goldstein opened the first CVS store in 1963 in Lowell, Massachusetts, the business offered busy consumers a one-stop shop for a variety of over-the-counter healthcare products and beauty aids. Four years later the company added prescription drugs to its product mix when it opened pharmacies in its stores. By 1970 the chain had 100 stores serving customers throughout the northeastern United States. Without abandoning the vision of its founders, which was focused on meeting the needs of customers, the company began expanding. At the end of 1989 the chain reported 789 stores and sales of $1.95 billion. In the 1990s acquisitions and consolidations of small regional chains—including in 1990 the Peoples Drug Stores with 500 stores, in 1997 the Revco chain with 2,552 stores, and in 1998 Arbor Drugs with 207 stores—boosted CVS to the United States’ number two drugstore chain in outlets and sales, behind Walgreens. In 1996 the chain changed its name to CVS Corporation. CVS was originally the acronym of the stores’ name, Consumer Value Stores, but as the business evolved, company executives said that the CVS stood for Customer, Value, and Service.
As CVS grew, it used a variety of marketing strategies to reach consumers in the markets where the chain was expanding. In 2000, working with the tagline ‘‘Care that touches everyone, one at a time,’’ CVS promoted the idea that its business was based on customer service. A CVS in-house team created print advertising, from sales signs displayed in stores to newspaper ads and weekly circulars. Television and radio spots were created by the chain’s advertising agency, New York–based Bates USA, which had signed on with CVS in 1997. CVS initiated its ExtraCare customer-loyalty-card program in 2001, supporting its introduction with a marketing campaign created by Boston-based agency Hill, Holliday, Connors, Cosmopulos. The ExtraCare launch was successful, and as CVS planned a national expansion into new markets, it dropped Bates USA and shifted its advertising work to Hill Holliday. The chain’s first national brand-image campaign, themed ‘‘Life to the Fullest,’’ was released in 2002.

CVS conducted market research to help identify the target market for the chain’s new advertising campaign. The research included reviewing data from 45 million members of the chain’s ExtraCare loyalty-card program, for which advertising and marketing had been created by Boston advertising agency Hill Holliday in 2001. The ExtraCare program offered customers rebates on purchases while enabling CVS to track buying trends. The data identified three customer profiles: young moms in their 30s, working mothers in their 40s with older children living at home, and retired women in their 60s and older. Data also revealed income levels of the average shopper, how much they typically spent each time they visited a CVS store, and what nonprescription products they usually purchased. Based on the information, the ‘‘Life to the Fullest’’ campaign was designed to appeal to women in a variety of age groups and incomes, but it specifically targeted the chain’s core customer, working mothers of all ages. The campaign was also intended to create an emotional link to the women it targeted and sought to reinforce the idea that CVS understood women and their shopping needs. Reporting for Drug Store News, Rob Eder noted that, although the ads emphasized the quickness and efficiency of shopping at CVS, they also strove to avoid making the shopping experience seem dull.

Walgreens, founded in 1901, was the United States’ number one drugstore chain based on sales. Although CVS, with $24.2 billion in annual sales in 2003, was closing in on Walgreens, the older chain clung to its top spot. At the end of 2003 Walgreens operated 4,291 drugstores and reported annual sales of $32.5 billion. To encourage customers to shop the stores’ front end (an industry term for the part of the store that was not the pharmacy) for a wide variety of nonprescription items and to send the message that the chain was more than a place to pick up prescription medications, in 2002 Walgreens released a marketing campaign themed ‘‘Perfect.’’ Created by Omnicom Group’s Chicago-based division, Downtown Partners, the television spots sent the message that Walgreens offered shoppers convenience, good service, and large product selection. The spots were set in the mythical village of Perfect and showed a dreamy image of everyone doing things they were supposed to do and everything working out right. At the end of the spots a voice-over noted, ‘‘Of course, we don’t live in Perfect, so we have Walgreens, where we can get what’s needed for the real world.’’ Not wanting to abandon its pharmacies, which accounted for about 64 percent of the chain’s annual sales, Walgreens in 2002 introduced a second campaign that focused on the pharmacy aspect. The campaign was referred to as ‘‘Rx Safety Net’’ and was designed to differentiate Walgreens pharmacies from the competition and show the benefits of choosing Walgreens for prescription-drug services. The number three drugstore chain, Rite Aid Corporation, owned 3,400 stores in 2003 and had annual sales of $16 billion. Despite falling in behind CVS and Walgreens, Rite Aid reported that its front-end business was one of the strongest in the chain-drugstore industry. One of Rite Aid’s goals was to further build its pharmacy business by encouraging front-end shoppers to become pharmacy customers. John Learish, the chain’s senior vice president of marketing, told Chain Drug Review, ‘‘The brand starts with the pharmacy. It’s the heart and soul of what we do.’’ With that in mind, rather than devising marketing campaigns to drive pharmacy customers to shop the front ends of their stores, as CVS and Walgreens did, in 2003 Rite Aid took a different approach. The chain released a campaign themed ‘‘With Us It’s Personal,’’ which focused on its pharmacy services and the relationship customers had with in-store pharmacists and sales associates. In addition, the campaign intentionally lacked a catchy tagline because, Learish noted, ‘‘The customer is pretty savvy. A slogan alone won’t do it.’’ He added that the effort was more than an advertising campaign: ‘‘It’s a new approach to the way we do business.’’

Hoping to appeal to women, its core audience, CVS Corporation began a makeover of its drugstore chain in 2004. Among the planned changes were cheerful turquoise and magenta walls and short shelves that enabled a woman of average height (five feet four) to see all over the store in a quick glance. An open path at the entrance of each store was designed to allow busy moms to avoid having to traverse a cluttered maze of aisles. To further pamper busy women, remodeled stores would have a beauty counter staffed by trained cosmetics and skin-care consultants. The chain’s newest marketing strategy was expected to help add to the more than three million customers who shopped at CVS stores each day.

Before planning its new marketing campaign, CVS and its ad agency, Hill Holliday, invested time in market and consumer research to determine everything from who they should target to what products the consumer was shopping for during stops in CVS stores. Working with the data gathered, Hill Holliday created the ‘‘Life to the Fullest’’ campaign. It began in October 2002 with a series of six television spots and a dozen print ads. No budget was available, but a report in Adweek noted that the drugstore chain spent approximately $35 million annually on advertising.
Television spots aired in the morning during network news programs, including Good Morning America and Today. During prime time the spots were shown on cable networks with a large female audience, such as Lifetime, the Food Network, and Home and Garden Television, as well as during programs that attracted a younger female audience, including Survivor, The West Wing, and Gilmore Girls. Spots relied on visual techniques to show viewers how products available in CVS stores could enhance their lives and how shopping at the chain could save them time. Each spot placed a typical shopper in her normal environment, but with a CVS store-aisle marker over her head. On the aisle marker’s left side was a list of the shopper’s CVS purchases, and on its right side was a list of the benefits the person derived from shopping at the chain. In one spot a woman flirted with a handsome 20-something guy at a nightclub. The left side of the aisle marker above her head read, ‘‘Calcium, Iron Supply, Haircolor,’’ while the right side stated, with each phrase on a separate line, ‘‘Still / Grooving / At 50.’’ When the woman turned away from the man and toward the camera, it was evident she was no longer a 20-something. Another spot showed a woman ready to relax in a peaceful swimming pool. The left side of the aisle marker over her head stated, ‘‘SunBlock, Lip Balm, and Skin Care,’’ while the right side read, ‘‘And Hubby / Has the / Kids.’’ A spot targeting older women had a couple of senior ladies showing off a confident and playful attitude while primping in a public restroom with cosmetics purchased at a CVS store.
Print ads, which ran in People magazine, followed a format similar to the television spots. One ad featured a woman sitting on her living-room sofa while she gave herself a manicure and pedicure. The aisle marker over her head read, ‘‘Cotton balls, nail polish, chocolate, extra bucks can be extra indulgent.’’ Another print ad showed a couple sitting in the candlelit booth of a romantic restaurant. The woman was holding a present, and the aisle marker above her head stated, ‘‘Greeting cards. Gift wrap. Chocolate. He’s finally getting it.’’

Following the 2002 launch of the ‘‘Life to the Fullest’’ campaign, CVS reported a chainwide upswing in sales. According to a report in Chain Drug Review, in 2001 CVS had failed to meet its business goals, reaching just $413.2 million in net income. But in 2002 the company’s net income increased 73.4 percent to $716.6 million. Further indication that the campaign was helping drive consumers into CVS/pharmacy stores was a jump in 2002 sales to $22.2 billion, an 8.7 percent increase over 2001 sales. In 2003 Advertising Age magazine named Hill Holliday one its Agencies of the Year, in part for its creative efforts on CVS’s ‘‘Life to the Fullest’’ campaign. A report in Adweek praised the television spot that showed elderly women primping together in a public restroom with cosmetics purchased at a CVS drugstore for injecting life into what was typically a ‘‘ho-hum retail segment.’’

No comments: