Mailbags and Cereals: Change is in the Air

Today, we answer an important question from reader Thomas M. We also dive into the rapidly evolving world of marketing. Even the largest and best-established brands need to pay attention or get left behind. Take a look here...

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Before we get into today’s article, we have a small piece of reader mail we’d like to discuss. Last week, Thomas M. asked about our popular “Rocket Stocks” feature. If you have been reading Inside Alpha for some time, you may recall we used to feature three high-flying stocks each month.

This quick breakdown let us take a look at just how rapidly the right kind of stock can make shareholders an absolute fortune overnight. In the last one we did, we featured one mobile technology company that saw its share price jump from $14.26 to $220 in just the first two weeks of the year. That’s a gain of 1,443% in about nine days.

Now, these little features were fun and enlightening about what kind of stocks can make such moves. But at the end of the day, they were not as useful as we liked. So, we’ve gone in a different direction.

As you are likely aware, we recently launched a new system to find these kinds of rocket stocks. We call this system the Financial Freedom Formula. You can get the full scoop on it here…

The idea behind this move is that while learning about giant overnight gains is fun, finding out about them before they happen is far better. So, that’s where we’ve put our efforts.

So, thank you Thomas for your question. We will continue to improve each and every aspect of what you see in these pages. The only real way to make serious money from investing is to be constantly improving. As for how our system itself is improving, we urge you to check out last week’s article: 26% in 2 Days, 90% of the Time, here.

Let me know if you have any questions or comments below this article or by emailing me directly at jim.nelson@netgrowthmedia.com.

Now, onto today’s article…

 

What Happened to Marketing

 In a new report for the above-mentioned Financial Freedom Formula service, I feature a company that combines artificial intelligence and machine learning with historical marketing and advertising trends, data and analysis.

Year to date, this company’s stock is already up 132%. And it has plenty more to run. So, clearly, this is the future of the industry. And that begs the question: how did we get here?

To illustrate this massive transition from Don Draper’s smoke-filled conference room to today’s computer geek-filled office buildings in advertising, let’s focus in on one specific product that’s been along for the ride.

When we were kids, breakfast cereals were sold with jingles, lovable cartoon characters and prizes in the box. Today, they are marketed to health-conscious parents in banal, almost boring ways. What happened?

Two main factors seem to be at work here. First, the health consciousness mentioned above. Second, the speed at which we all live has changed.

It was once almost a competition to see how much sugar you could get in each bowl of cereal. Chocolate, marshmallows and sugar-coated “frosted” flakes took off. Since few parents actually approved, these cereals were marketed to kids during their Saturday morning cartoons.

Don’t get me wrong… that still happens. But it is not the driving force of marketing anymore. As parents have changed buying habits – from whatever their children would eat in the morning to thought out healthy choices, so have both cereal companies and their marketing strategies.

Every major company from General Mills to Kellogg has made giant steps toward reducing sugar content and artificial flavors and colors in its products. This should not be a surprise to you, as these companies have been using these facts as one of their main marketing strategies.

Now, instead of a race toward adding more sugar and more appeal to children, the market has shifted 180 degrees toward healthy options for concerned shoppers.

The second, and potentially more important change in this particular industry is the branding and design of the product itself.

The fastest-growing segment in breakfast foods is cereal bars. It has been for years now. The reason is simple: no one has time to sit down and eat anymore. Over the last dozen years, cereal makers have been designing ever-more appealing bar choices for children. But again, these too have had to evolve from sugary to healthy.

And it’s not just how fast customers eat these product that matters to the big companies. How fast their customers can find these brands in stores is the current fascination.

Kellogg just announced a major change to its cereal line up. Those cartoon mascots like Tony the Tiger and Snap, Crackle and Pop will remain on the packaging. But they are shown much smaller. The cereals themselves are featured cleanly and from an overhead shot. And the brand is displayed equally cleanly and distinguishable.

This might sound like an odd change. But it makes perfect sense. According to the company, “70% of consumers were able to find the boxes on supermarket shelves more easily.” Even shopper’s time spend looking at their products are influencing these advertising trends significantly.

Overall, marketing and advertising are rapidly evolving. From once a Madison Avenue boardroom to machine learning in social media trends, even our beloved cereals are changing.

So, when you consider investments in companies that rely on branding and imagery, consider how well it can adapt and evolve with the market.

Consider your own portfolio. Do you own Coca-Cola, Apple or Procter & Gamble? These companies rely on their brands to grow their businesses. If they don’t evolve with the marketing industry, even these giants could get left behind.

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