Canadian Tire began its second 70 years of business by shaking up its image with a launch last week of a new low-price strategy.

The multimedia advertising campaign puts more emphasis on value and price with the new theme-line, ‘There’s a lot more to Canadian Tire for a lot less.’

The new positioning is much more price-oriented than the selection theme used for the past 13 years, ‘There’s a lot more to Canadian Tire than tires.’

Mike Arnett, Canadian Tire’s divisional vice-president advertising, says the subtle change in positioning is the result of fine-tuning the company’s strategic direction, a process that took nearly a year.

‘I think Canadian Tire’s value perception has always been strong, but it’s been strong in spite of our not having talked about it so much,’ Arnett says.

‘The old theme-line was very selection-dominant,’ he says. ‘You could talk to customers, and they would play back the selection message loud and clear.

‘Over the course of the last 10 years or so, we’ve pretty well got that one through.

‘We found people felt pretty good about our pricing and our value, but we found our prices were better than what we were getting credit for in terms of price image.

‘That fact, in combination with price continuing to be important to people, is a very important part of the mix. They need to feel comfortable about price.

‘We needed to strengthen that message, but not exclusively that message – price – in the context of Canadian Tire’s total value offering,’ Arnett says.

‘Selection will play pretty strongly, as will the convenience,’ he says. ‘It’s a multifaceted offering. A multifaceted positioning is viable, it’s just a little harder to communicate.’

Canadian Tire is carrying the same value/price message through to the rest of the advertising mix, including flyers, print, radio and a big signage program in the stores.

Toronto agency Doner Schur Peppler handles broadcast creative and placement for Canadian Tire, while all print advertising and flyers are taken care of in-house.

Alan Kalter, president and chief operating officer of the Toronto shop’s parent W.B. Doner, based in the Detroit suburb of Southfield, was the first account supervisor on the Canadian Tire business when W.B. Doner and Company won the business in 1980.

Kalter says the new campaign was structured in four phases.

The first phase, a teaser campaign of 15-second tv spots started late last month to heighten awareness that something important was about to happen at Canadian Tire.

The second phase was last week’s attention-getting announcement of the new pricing policy.

Thirty-second commercials took the approach that the news about the prices at Canadian Tire is so big that the earth shakes and that literally happens through a series of humorous vignettes.

The spots revealed that everyday low prices are now in effect at Canadian Tire and that prices have been adjusted and lowered on products throughout the stores.

The third phase is an on-going theme that reinforces the low-price policy, along with the promotion of sale events.

These commercials are a combination of the new everyday low prices and the special values available on a weekly basis.

The basic theme to the advertising concerns customers and their involvement with Canadian Tire.

During focus group interviews, customers expressed strong feelings about Canadian Tire.

The agency’s creative people, watching the interviews behind a two-way mirror, thought those strong feelings could be turned into some pretty interesting advertising.

The fourth phase is a 30-second image spot scheduled to launch in late summer that reaffirms not only the pricing aspect, but the role that Canadian Tire and merchandise has played in people’s lives throughout Canada.

‘It was hard to grow up in Canada or, now, to have a family in Canada today, and not have Canadian Tire somehow be a part of your life,’ Kalter says.

‘It is an important issue for us in differentiating Canadian Tire to continue to remind people that we do play a special role in fulfilling their needs.’

Emotional ingredient

Canadian Tire believes strongly that brand personality is one of the key things that differentiates it from the competition in addition to the rational ingredients such as price or merchandise selection.

The price message is reinforced on the cover of the new spring and summer catalogue with the banner, ‘Prices lowered on over 200 items.’

Inside, products are flagged with, ‘New low price for 93.’

The cover photo, a grandfather and grandson fishing off a dock, is a still from the image commercial airing later this year that is certain to tug at Canadian heartstrings once again.

Arnett says the company has not used the warm, human approach of the award-winning ‘The Bike Story’ in the past three years, a decision that has essentially been budget-driven more than anything else.

‘As things got a little tighter, expense control became an issue,’ he says. ‘It becomes a little more difficult to justify programs that are longer term, like some of the brand building stuff.

Traffic building

‘As a result, the tv dollars have been spent on traffic-building, shorter-term executions in the last two or three years, but that’s going to change.

‘It will change to a mix that includes image advertising back in a much higher profile.’

Arnett believes that unless the marketing mix is balanced between image advertising and traffic-building promotions, business will suffer.

‘Most businesses plan for the long term and execute on a shorter cycle,’ he says. ‘We need to make sure we’re executing on a short cycle and a long cycle as well.

‘And that’s the balance between the traffic-building stuff you do and the longer-term positioning of the business.

Little image advertising

‘We’ve been doing very little image advertising, – programs dedicated specifically to positioning Canadian Tire over the longer term – over the last three years.

‘You don’t so much see the results on a day-to-day, week-to-week basis when you back off and you channel that money somewhere else. But over time it will catch up with you.

‘I think continuing along that path would put us at risk,’ Arnett says.

‘It’s time we came back and, in addition to the way we do our traffic-building promotions, to come out with some communications that tell people directly what you stand for,’ he says.

Kalter says Canadian Tire advertising done before Doner was primarily focussed on do-it-yourself items using the line, ‘You can do it.’

It concentrated only on the rational reasons for shopping at Canadian Tire.

When Doner was awarded the account, consumers predominantly viewed Canadian Tire as an automotive and do-it-yourself store.

‘And that’s when we brought a point-of-view that said we need to get people thinking of the store significantly beyond the tire association,’ Kalter says.

‘That’s why the original positioning became, ‘There’s a lot more to Canadian Tire than tires,’ he says.

‘That’s half the story.’

Good neighbor

‘We also believed that one of the things Canadian Tire had to do was to more strongly establish the brand personality of Canadian Tire as a good neighbor and a friend that cares about its customers.’

One of the first examples of Canadian Tire’s memorable image advertising was the ‘Albert’ tv spot in the mid-1980s.

It focussed on every young hockey player’s dream, a future in the National Hockey League.

But the echoing cries of ‘Albert, Albert, Albert’ were just young Albert’s imagination – a daydream which went on in his mind during his local hockey game.

‘The Bike Story’ brought tears to viewers’ eyes when it was aired in 1989.

The commercial is highlighted by the unforgettable picture of the wonder and amazement in a young boy’s eyes as his father gives him his first new shiny-red bike from Canadian Tire.

Kalter calls it a a great commercial.

Labor of love

‘One of those labors of love, and everybody who worked on it, whether they be at the client or agency, knew we had pure magic on the storyboard,’ he says.

‘It was wonderful to be able to shoot it and air it. Amazingly, it didn’t air that much.

‘But we also believed that a little bit of ‘Bike Story’ would go a long way.

‘It helped set the tone for a lot of advertising that followed, although any good agency and any good marketer always looks at the past as something to better.

‘Not something to look back fondly upon, but as just another bar on the high jump that you have to get over again.

‘We look at ‘The Bike Story’ as a great piece of history and something that helped solidify the brand personality of Canadian Tire and allowed us to do a lot of great work since then.’

Today’s consumer is a lot more value-driven than before.

More than just the effect of the current economic situation, there is a change in the way the consumer wants to buy.

Value and price

Value and price are more important now than in the 1980s, and Kalter says Canadian Tire needs to communicate its value in a strong way, while maintaining its brand personality.

The Canadian Tire approach to traffic-building advertising is warm-hearted, hard-sell.

‘One of the things we said to Canadian Tire is that if you want to sell hard, one of the things you have to do is lower your voice in order to be heard,’ Kalter says.

‘There’s a lot of screaming going on by retailers these days because they think that’s the solution to hard-sell,’ he says.

‘We think that you can sell hard and do it in a way the consumer wants to listen to, and therefore, you’ll be more believed.’

Canadian Tire stores carry a wide range of products, consequently, the demographics of its target audience are broad.

Arnett says he has to be careful not to focus his efforts too tightly because the target group has expanded over the years.

About 85% of all Canadian adults make a trip to a Canadian Tire store at least twice a year.

Even the demographic characteristics of the highest frequency Canadian Tire shoppers is broad: homeowners and families with children.

To reach its market, Canadian Tire is a heavy user of tv and distributes more than eight million flyers a week.

‘We buy virtually every tv market that’s available to be bought in order to get full coverage of our stores to stay in front of the broad adult population,’ Arnett says.

‘Having said that, there are some particular audiences that are of real interest to us,’ he says.

‘Those wouldn’t surprise anybody really because they reflect the product categories that we trade very strongly in.

‘Do-it-yourself automotive repair people are of particular interest, so are people who like to have the service done for them because of the service centre side of the business.

‘We’re strong in family sports, then the high-end or very specialized individual sports, and there’s a strong correlation between people that work on their own car and people that get involved in outdoor family leisure activities.

‘We see a good fit there between sports and automotive.’

Product mix

The company’s product mix has changed in recent years and has become more appealing to women and not just in a traditional way with housewares.

Arnett says there is an on-going effort to maintain its appeal to female shoppers because the family is an important part of its core customer base and the number of female shoppers is increasing.

‘We ran a service ad in 1991 that showed a woman bringing her car in for service, and that was not an accident,’ he says.

‘It’s something not a lot of people would have expected, but it’s part of the message we want to put out.

‘There’s more growth in the service area from women customers than men.

‘Women are buying more cars and taking on responsibility for maintaining the cars.

‘We do much more of our automotive advertising on tv and much less in flyers than we do in the other categories.

‘That’s partly a function of the need to brand Motomaster and partly due to the competition in the automotive segment.

‘You find a lot of the specialty companies using broadcast, and businesses much smaller than ours spend, relative to us, a disproportionately high share of their ad dollars on tv.’

Most of the company’s direct marketing efforts are done with credit card inserts.

More than one million pieces are mailed per month, with offerings varying according to the time of year.

Arnett says the advertising department is starting to develop some other targetted offers.

‘We ran one recently on snowmobile products targetted to snowmobile owners and former purchasers of snowmobile products,’ he says.

‘It was so very targetted just a small portion of the monthly mailing of a million would carry the advertising piece.

‘It was dedicated to people, by virtue of previous purchases or an address, that would be likely to take advantage of an offer on snowmobile-related products, oils, repair manuals, covers.’

Event sponsorship is not a big part of Canadian Tire’s marketing mix from an expenditure standpoint, but Arnett considers it an important ingredient.

‘I continue to believe that we get much more leverage out of the last dollar spent on events, than on the last dollar spent on tv or flyers.’

The company has been a big sponsor of cycling events for a number of years – from international competitions and grassroot competitions to bike rodeos in dealer parking lots.

In other sports, it has been involved in events such as the Canada Cup hockey tournament in a fairly significant way.

A few years ago, it started Team Canadian Tire, a local team sponsorship program that started out in hockey and will branch out into other sports this year.

This past January it sponsored a big hockey tournament that was part of Team Canadian Tire, but was targetted to the old-timer segment, adult recreational players.

A co-op commercial running last September promoted the event and also tied in Canadian Tire’s national brand suppliers of hockey equipment.

‘Co-op programs [are] one thing people don’t talk about very much because it’s not sexy compared to the image advertising that marketing and advertising people like to talk about and do,’ Arnett says.

But he says co-op programs are a reality in a business that is promotionally-oriented to some degree.

‘There’s a place for advertising that has a doughnut where you insert two or three items, and that gives you a sense of what’s on sale this week.

‘We do it from time to time, but when you can avoid it, and there’s another way of doing it, it can be much stronger.’

A good example of strong co-op advertising was one of Canadian Tire’s Christmas 1992 commercials.

As the visual showed a bounty of gifts under the Christmas tree, the voiceover called attention to the fact that a number of them needed batteries.

On that note, the famous Energizer Bunny marched across the screen followed by Canadian Tire’s Scrooge character.

As far as Kalter and Arnett are aware, Canadian Tire is the only other company besides battery-maker Eveready to use the Energizer Bunny in its advertising.

‘The Energizer Bunny commercial was really unique because there was a highly recognizable creative asset that we were able to incorporate with our own little Christmas icon, Scrooge, and do a piece that was unique from a creative standpoint,’ Arnett says.

‘But we take the same approach with all of the co-op advertising, no matter what the creative execution might be,’ he says.

‘To make sure we understand what the objectives of the advertiser are, we meet directly with the sales and marketing people from the manufacturer and supplier, and the agency will be part of those discussions sometimes.

‘We’re always looking for ways to do things in a fashion that appears natural. We’ll write unique creative for an item, rather than just putting it into an all-purpose doughnut.

‘Last spring and summer, we had a 30-second spot with a 15-second intro which related to the event taking place during the week, followed by a 15-second portion dedicated to the product and price story. The creative was done uniquely for each item.

‘In some cases, we use a seamless approach where the product is part of the 30-second story.

‘The hockey spots were done that way for the Team Canadian Tire adult tournaments. They promoted the events and featured national name brand hockey equipment.

‘You start knowing what the overall objectives of the hockey event are and determine what products you need to work with. Then you write the creative around it.

‘I don’t think there’s too many people doing that.’

It is hard to keep doing effective advertising and keep costs down, especially when different creative is developed for every item or pair of items that are promoted.

Arnett says if you plan properly, knowing you are up against some budget issues, there are ways of managing your expense.

For a particular event or seasonal program, Arnett considers all of the item and price executions that have to be produced, and plans and schedules them as one campaign, even though it may stretch out over several weeks.

By doing that, there are cost-efficiencies in terms of building sets, in the way the commercials are shot, and in the way the production is contracted out.

Arnett says Canadian Tire’s advertising has reflected the broad marketing strategies of the business, and will continue to do that with a blend of rational and emotional communication.

‘Our job is to put the very best possible face on the marketing strategies that we put together and develop them in the context of what’s happening competitively. Changing customer needs, trends in the business – all those issues determine the broad marketing strategy,’ he says.

‘Certainly we stay in tune with what’s happening with the customer base, and we’re aware of what the demographic shifts are.

‘It’s less an issue with Canadian Tire, not that we’re ignoring it, but the kind of hammer that you choose to buy doesn’t change much as you get older, or with your ethnic background.

‘Warm fuzzy stuff like ‘The Bike Story’ – you can’t rely on your track record. You’ve got to continue to be relevant to customers.

‘It’s great to have a history of people growing up with Canadian Tire, and we remind them of that from time to time,’ Arnett says. ‘But you can’t rely only on that.

‘As customers change, concerns with having a shopping trip they can rely on, every trip satisfying, right product, right price, right place, it’s basics,’ he says.