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VALS™ Lens Applying VALS™ to current events July 2014

The U.S. VALS Framework graphic

In this issue:

In Product Placement: Red-Carpet Gown by Prudential

Red-carpet events, such as the 2014 Cannes Film Festival, continue to attract significant media attention. Brands and their advertisers use these events increasingly to showcase their products, both on and off the red carpet (through related social-media campaigns). Firms such as Prudential Financial that operate in a service category are apparently at a disadvantage in such settings, because they have no physical product to showcase. Enter actress Naomi Watts, who wore a dress designed by Francesca Azzarra, a retired real estate agent who, thanks to having saved for retirement with Prudential Financial services, can now focus on her true passion: fashion design. Prudential hopes this story, along with several others featured on a dedicated website, will go viral and attract more customers. Thinkers are Prudential's core customers, according to VALS™/GfK MRI (2013 Doublebase study). Thinkers are mature, satisfied, and fulfilled, and about a third are retired. Thinkers need little help in figuring out what to focus on during retirement, but they may appreciate some of Prudential's profiled golden-year activities. Some 60% of Thinkers have seen a product placement during a TV show in the past six months, but only 20% show some interest in this form of advertising.

See the design process unfold

In Investing: Chipotle and CEO Pay

At its annual shareholder meeting early in 2014, 77% of fast-food-chain Chipotle's investors voted against a lavish executive-compensation package for the firm's two CEOs—a package that included salaries upward of $20 million each and generous ($100 million) stock options, with the freedom to sell after a short waiting period. Investors criticized the incentives because they fail to commit the CEOs to a long-term growth strategy for the firm. Interestingly, investors opposed the package even though Chipotle's performance exceeded market expectations. About 10% of the US population reports having eaten at Chipotle in the past six months. Food-conscious Innovators are twice as likely as average to have enjoyed a customized burrito, followed by Experiencers and Achievers. Innovators appreciate the modern design of the restaurants, Chipotle's commitment to organic and free-range ingredients, and the speedy service, particularly during a lunch break. Innovators also hold positive attitudes toward investing for the future and are increasingly interested in responsible investing and sustainable business practices. Chipotle would do well do take seriously its shareholders' concerns to avoid turning off both its investors and its core customers.

Read more about Chipotle's annual shareholder meeting

In News Publishing: Push versus Pull Content

An internal New York Times (NYT) document that BuzzFeed obtained paints an increasingly dire picture for the NYT homepage traffic. According to qz.com, traffic to the NYT homepage has been steadily declining since 2011, from more than 150 million viewers to fewer than 80 million by 2013. A related poll by the Pew Research Center shows that fewer people receive their news during regular times of the day; more people receive news "from time to time." Zachary Seward at qz.com explains the shift in terms of a difference between push and pull media. Users must actively seek out pull media—such as homepages and some mobile apps—for updated content, whereas push media—represented best by social media (photos, videos, links, Tweets, and the like)—appear on people's screens during random times of the day and gain attention accordingly. From a VALS perspective, the NYT is primarily an Innovators publication. Innovators are almost four times more likely than average to read, and thus, the shift away from pull-media consumption likely reflects a shift primarily among Innovators and how they wish to stay updated. Firms that fail to keep up with the changing landscape of Innovators' media-consumption habits, by overinvesting in pull media rather than finding innovative alternative channels (including investment in word-of-mouth sharing), will likely see a further decline in traffic to their offerings.

See the full New York Times Innovation Report

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