|Made in Atlantic Canada
In May of 1990, Aubrey Palmeter and Loma Bremner, were preparing their presentation for the June 1990 meeting of the Atlantic Canada Plus (ACP) Board of Directors. Aubrey and Loma were the Executive Director and Promotions Manager respectively of Atlantic Canada Plus located in Dartmouth, Nova Scotia. The Board had drafted a revised mission statement which read: "To create opportunities in Atlantic Canada by promoting and marketing goods and services produced in the region." Aubrey and Loma would be responsible for developing a promotional plan to fulfil the Board's mission.
The Inception of Atlantic Canada Plus
Harvey Webber, a retail clothing merchant from Sydney, Nova Scotia, founded ACP in 1977. Harvey's enthusiasm inspired other business people who shared his vision of the problems and opportunities faced by businesses in the Atlantic Canadian provinces - Nova Scotia, Newfoundland, Prince Edward Island, and New Brunswick.
This case was prepared by Professor Julia Sagebien of Saint Mary's University for the Atlantic Entrepreneurial Institute as a basis for classroom discussion, and is not meant to illustrate either effective or ineffective management.
Copyright © 1991, the Atlantic Entrepreneurial Institute. Reproduction of this case is allowed without permission for educational purposes, but all such reproduction must acknowledge the copyright. This permission does not include publication.
Harvey's message was simple and straightforward:
.. we are regarded as the underachievers of Canada and remain the poor end of the country ... when the Government of Canada gives money to the people in the Atlantic Provinces, it is merely giving money to consumers who will buy products made in the constituencies of [central Canadian] Cabinet Ministers. The more money they gave us, the more we sent back to buy their goods. It was really self-help for their constituents... there would be no permanent improvement if we got more money that way. It depends on the handout psychology for funding the underdeveloped areas, and that is dangerous. These funds are distributed in such a way that they politicize the commercial activity in our province and municipalities. The Atlantic Canada market has a potential 2.2 million consumers to purchase competitive products and services made regionally ... if more Atlantic Canadians bought what is produced ... what we grow, catch, package, assemble or manufacture... in the region, it would create jobs here and make it possible for future generations to stay in Atlantic Canada and find jobs...
In presenting the "self-help psychology" to Atlantic Canadians, ACP supporters believed that they were going directly to what they saw as the root of many Atlantic Canadians' frustrations, i.e., "Atlantic inferiority." The ACP movement gave a voice to Atlantic pride. In the eyes of its supporters, Atlantic Canada Plus had a real impact on the values and self-perceptions of people in the region.
Pat Gaudett, at one time general manager of ACP, reinforced this message:
...the association's motto is not 'Buy Atlantic Canada at all costs'. Atlantic Canadians should buy local products because merchandise produced in the region is good merchandise ... Before the arrival of Atlantic Canada Plus, there was an attitude that Atlantic manufacturers could not produce a product on par with outside manufacturers.
Members of ACP were concerned about the effect of certain business practices on the Atlantic economy. Many valueadded processes, such as processing fish caught locally into fish cakes and fish sticks, occurred in other parts of the world. These products were then shipped back to the region, and offered at a much higher retail price. Even though these manufacturing practices might have been justified by the need to both circumvent US import tariffs and to be closer to major markets, the impact was devastating to the region's economy. This effect was aggravated by negative attitudes toward local products. ACP’s statistics showed that the Atlantic provinces had 9.1% of Canada's population, but only 5.8% of its manufacturing.
Organization of Atlantic Canada Plus
The prototype organization for Atlantic Canada Plus was the Irish Goods Council, a marketing organization funded by the Irish government with the mandate of promoting the purchase of Irish goods. Common to this type of organization was an appeal to loyalty, economic benefit and job creation.
In the late 1970s, membership in ACP grew very fast. Membership at first consisted primarily of regional manufacturers, but it eventually expanded to include retail businesses and professional service industries. It became obvious that to truly influence the purchase of Atlantic goods and services in the region, the whole distribution network - manufacturing, processing, distributing, retailing and service sectors - had to be integrated. At its high point in 1986-87, there were 600 members in the organization (See Exhibit 1 for a representative sample of members).
ACP operated with a board of directors and the aid of several volunteer committees. The Board, as well as the marketing committee, was formed by a rotating core of prominent business people carefully selected from the four provinces (Exhibit 2). The role of the marketing committee was to evaluate approaches, develop strategies and make recommendations to the Board of Directors. From 1977 to 1989, ACP had only a small, core administrative staff.
In 1990, Atlantic Canada Plus obtained financial support from the Atlantic Canada Opportunities Agency (ACOA), a regional economic development program, to establish the Supplier Development Services (SDS). The five year, $9 million dollar program was designed to help local suppliers sell to government (primarily to the federal government). The new program presented many opportunities for ACP. The Supplier Development Services (SDS) had offices in the four provinces and in Ottawa, and brought the total number of employees in the new ACP/SDS organization to almost thirty.
ACP received an annual management fee of 3% of the revenues of SDS for managing the SDS project. This fee, support from the four Atlantic provinces (the Newfoundland provincial government began supporting ACP in 1989), and membership fees (ranging from $203 to $4,600 a year, depending on the number of employees and the type of business of the firm) provided the budget for all of the non-SDS related activities of the organization. Total expected revenues for ACP in 1990 were over a quarter of a million dollars.
Past Marketing Strategies
Advertising and Promotions
The goal Atlantic Canada Plus had set itself was to create jobs in the region by asking Atlantic Canadians to use regionally made products and services. The campaigns were designed to appeal to three different types of consumers: shoppers, government purchasing agents and business people, each with a different set of needs and each reached by a specific advertising approach. ACP's ability to mount high impact promotional campaigns was related directly to government funding. Since this funding fluctuated significantly from year to year, ACP's promotional efforts lacked consistency and stability; this led to an erratic advertising impact during the organizations first fourteen years.
Early efforts to establish Atlantic Canada Plus had crystallized in a program that focused an awareness and identification.
Awareness involved making consumers in Atlantic Canada realize that buying products and services made locally was a direct benefit to them. The campaign also had to convince Atlantic Canadians that local products and services were competitive in quality, price, service and consumer appeal.
Identification meant regional products had to be readily identifiable. A region-wide study conducted by the ACP marketing committee showed that 97% of the people surveyed would buy Atlantic Canadian products, if the price and quality were equal to products from outside the region. However, only 36% of shoppers checked to see where the products were made. ACP staff believed that one of the simplest and most effective techniques for arousing consumer interest and product identification had been the development of the ACP logo (Exhibit 3). The logo was attached to products and circulated on letterhead, T-shirts, packaging, billboards, trucks, advertising - anyway the ACP staff thought it could have an influence. As one member of the marketing committee put it: "The ACP logo had to be as familiar to Atlantic Canadians as Coke and Pepsi." Committee members hoped that logo recognition would lead directly to the purchase of products or services marked by the logo.
The marketing committee also conducted member opinion and consumer reaction polls; designed posters for public display, contests, mall displays and store displays; made presentations to business and government groups; canvassed local business people to encourage them to become members; and conducted a massive public advertising campaign which eventually topped $1 million.
Results from this early campaign were mixed. Research indicated that in the short term, there was a rise in sales of a product that used the logo in its advertising or on the product itself. Unfortunately, ACP staff discovered that purchase habits did not change in the long-rim. A staff member remarked, "Buy Atlantic is a good idea, [but] many do not put the idea into practice... It's easier to change ideas than habits."
Between 1982 and 1984, ACP renewed it promotional efforts. In 1982 and 1983 ACP began biannual PlusPak promotions household mailouts to present directly Atlantic products under the ACP umbrella to consumers. It included coupons of the member companies and was supported by a heavy media campaign. The ambitious project, while successful on many counts, required extraordinary effort. The cost of the campaign exceeded the expected returns, and weakened ACP's financial position. In 1984, as part of the national 'Shop Canadian" campaign, ACP mounted a campaign using radio, television and print media promotion.
In 1986-87, DRIE, a government economic development program, awarded ACP approximately $280,000 to mount a campaign, provided that the motifs connected with the concurrent federal 'Think Canadian" campaign be clearly incorporated. The new campaign, as the ACP creative group envisioned it, was designed to make an impression on approximately 75% of the region's consumers. The objective was to educate consumers about the benefits of "purchasing Atlanticmade." A second objective was to persuade the member businesses that there was an advantage to highlighting the "Atlantic-made" factor in their own marketing. The regionwide campaign reached consumers with the logo and several themes including: '"Me sign that we've made it. Buy Atlantic Canadian. Bring home quality and jobs."
The media used for this intense three-month campaign were busboards, shopping carts, newspapers and magazines. The campaign ran from March through May of 1987. The pivotal element was a direct mail offer sent to 100,000 households. Allowance was made for significant participation by ACP member companies, and Atlantic consumers were offered a free set of four historical prints in return for sending in a logo from anywhere in the marketplace. Members of ACP were invited to support this consumer incentive with advertising, posters, decals, shelf talkers, banners and other point-of-purchase material that could influence shoppers at the moment of choice.
With a 4% response rate for the direct mail component, an exceptionally strong rate for this type of direct mail promotion, the campaign was successful. ACP promotions staff believed that "what this campaign points out is that many Atlantic Canadian consumers are highly aware of the need to buy regionally," and that there was"much loyalty" to regional products. ACP also enjoyed its largest membership roster ever (600 members) as a result of this renewed awareness.
From 1987 to 1990, ACP consumer promotions activities were drastically reduced. Harry Lockhurst, president from 1988 to 1989, concentrated his efforts on reducing ACP's deficit and on increasing membership through personal sales and public relations. He was able to strengthen ACP's financial position, but the promotional cutbacks, administrative problems within the staff, and the overhead costs associated with the direct sales effort, resulted in a declining public profile and a loss of membership. ACP staff worried that the budgetary constraints might mean that future campaigns would not have the follow-up necessary to maintain "top-of-mind" awareness and consumer confidence in the ACP mission.
Advocacy and Public Relations
Despite its limited staff, ACP was able to participate as a player and spokesman in major events. According to ACP staff, newspaper and magazine articles even lauded it as a "love child of the media."
In the early 1980s, representatives of ACP also embarked on advocacy campaigns aimed at increasing the number of purchases of Atlantic products made by national chains (e.g, Zellers, The Bay) and by government agencies. Since the majority of chain stores depend on the initiative of the manufacturers to present their products to them, ACP brought manufacturers and purchasers together in trade fairs. According to ACP staff, the response to these efforts had been erratic with some chains willing to cooperate more than others. "Food store chains have been the most supportive and flexible, because their buying offices are local."
In 1979, with support from ACP, the premiers of Nova Scotia, Prince Edward Island and New Brunswick introduced the Maritime Purchasing Policy. The new policy for provincial purchasing agents was that, if price and quality were similar, they should buy first in the province, second in the region, and third in Canada.
Problems - where did all the logos go?
Research conducted by ACP during the late 1980s showed that even though ACP's mission of Atlantic economic selfhelp was still dear to many consumers and business people, they perceived the organization itself as being less and less effective.
Membership declined in the late 1980s, and producers were no longer as enthusiastic about using the logo as a promotional tool. 'There was a time when everywhere you looked you saw the stickers and promos," said the director of merchandising for a large food retailer. "Our suppliers are no longer asking to be identified with the logo," he added. Also, many large companies did not want to use the logo because a considerable portion of their products was destined for export markets where the 'Buy Atlantic Canadian' exhortation would not apply. Research conducted in 1989 showed that many of the members did not perceive a tangible benefit from belonging to the organization. Few used the logo. An ACP member in the automobile industry commented that, 'We haven't seen the rep in here for a long time, and I don't know if they're still driving the car we gave them, it's been so long since we've seen them." Nevertheless, the members were still enthusiastic about the mission of the organization and would have been willing to recommend other businesses for membership.
Another failure of Atlantic Canada Plus as perceived by its members was the organization's inability to get all provincial government purchasing agents to implement the Maritime Purchasing Policy.
Surveys showed that the ACP logo was familiar and most consumers were in favour of its cause. But buying habits had not changed to match that approval.
As Harvey Webber put it, "Starting out from scratch, we've done wonders in awakening the consciousness of the consumer, business and government about buying from ourselves. But we can't stop there, people have to convert that awareness into action."
An additional problem for ACP promotional campaigns was that consumers confused Atlantic Canada Plus with the APlus Lottery based in Moncton, New Brunswick. The 1977 design of the logo also gave it a tired and outmoded look.
Some possible explanations given in 1990 by the Board of Directors and the management of ACP for the lower profile of the organization and for the serious decline in ACP membership were:
There was no field force pressing for membership fees;
There was no apparent benefit to being an ACP mem ber;
There were cloudy membership issues, such as methods for determining membership fees, important businesses being excluded from membership, problems in determining what represented a service organization;
ACP's concentration on consumer aspects required grants of funds to help promotion;
ACP should have been responsible for telling consumers about the logo, rather than leaving that responsibility to its members;
There was too much emphasis on protectionism. Today's business environment concentrates on 'free trade' and being able to sell everywhere. A more international export focus was important;
There was too much competition with other associations such as Boards of Trade and Chambers of Commerce. ACP had to offer something different.
A New Direction for Atlantic Canada Plus
In 1990, ACP still had to appeal to three different types of target markets: government purchasing agents, the private sector and shoppers.
Government Purchasing Agents - Supplier Development Services (SDS).
Buyers in government departments throughout Atlantic Canada purchased more than $6 billion in goods and services annually. Besides the various departments and ministries of the four provinces, this market included all local hospitals and schools. The large utilities like NB Tel and Nova Scotia Power, as well as the federal government departments (in particular, the Department of Defence), also made excellent targets for ACP advocacy activities.
The experience of ACP officials with the Maritime Purchasing Policy demonstrated that this was a tough market - inertia, habit, indifference and archaic rules and regulations, as well as specifications that favoured current suppliers were standing in the way of local suppliers.
ACP staff hoped that SDS would enable the organization to reestablish itself as a major player in Atlantic Canada. SDS offered businesses "streamlined access" to public purchasing agencies. The goal was to generate $150 million in new business for regional firms from all levels of Canadian and foreign governments between 1990 and 1995. The target registration was 2,000 firms, or approximately 10% of all manufacturing, distribution, and service firms in the region.
Lorna and Aubrey expected SDS to raise the profile of ACP considerably. It had a presence in all four Atlantic provinces and in Ottawa, provided a tangible benefit to participants, was expected to be an effective vehicle for obtaining government contracts, and would provide a good opportunity for public speaking engagements and media coverage.
Since SDS was a well funded and powerful program, the appropriate relationship between SDS and ACP in terms of organization, management and public image, had to be carefully determined by ACP and SDS marketing staff members. The Board of Directors and the staff felt that ACP should both be the umbrella organization and provide the consumer focus; it would be left to SDS to focus on the business service. SDS would be one resource or division of ACP and other divisions would slowly eveolve in response to requirements of the business community. In the SDS promotional programme aimed at encouraging businesses to register on the service, ACP also saw an opportunity for a cost-effective awareness campaign. It was critical that Loma and Aubrey determine an appropriate public image for both organizations.
The Private Sector and Consumers
In order to provide members with more tangible benefits, the ACP Marketing committee was considering the suitability of various activities. These activities had to mesh with the organization's objectives and not duplicate the efforts of other private and public sector organizations (e.g., Chambers of Commerce, Boards of Trade, etc).
The activities considered included seminars on sales and marketing; PR releases and a "Company of the Week" column in local papers; presence at trade shows and missions; a redesigned "ACP Update" trade letter for independent circulation, or insert into local business publications; preparing business plans and doing research for member companies; providing translation of speeches by Board members and ACP/SDS staff; sponsorship of dinners/events (e.g., Innovator of the Year Award); member cross-promotion (e.g., potato chip company and food-dip company working together); international marketing; being the official voice of business; and cooperative advertising.
Since ACP had been involved in some of these activities in the past, the Board had suggested that the first step should be to carry out a telephone survey, asking present members and previous members what they wanted from ACP. The cost of this research ($10,000) and the follow-up activities related to marketing development ($6,000) were added to the 1990 budget.
In 1990, a salesperson was hired to solicit more members. The sales commission and expense for 1990 were budgeted at $38,000. Until then, neither specific industries nor regions had been targeted fro recruitment. Aubrey and Loma felt that it was up to the new salesperson to decide if this shotgun approach was still best. A possible strategy was to use the existing membership roster to recruit new members.
ACP staff felt that one of the most important benefits ACP provided to its members was consumer promotions. In 1990, the organization budgeted approximately $75,000 for promotional campaigns: $40,000 ($20,000 for production and $20,000 for media) provided by the four Atlantic provinces on an equal share basis, and a $35,000 general promotional budget. The provincial money was earmarked specifically for a TV testimonial campaign by local celebrities. Although this might not have been the most efficient use of these funds, Aubrey and Loma were afraid of losing the provincial commitments if the campaign concept were changed.
The target market for this campaign was quite broad. ACP officials believed that ACP member companies would be alienated from other industry sectors (e.g., industrial adhesives) or provinces if market campaigns were designed to appeal to a particular consumer segment (e.g., encouraging people to buy Nova Scotia strawberries in the summer). This constraint, combined with the limited funds available for promotional campaigns, had always been the rational for developing mass market campaigns with general, across-the-board appeal to buy Atlantic-made products.
Aubrey and Lorna felt that a strength of the organization was that its membership roster included several large, powerful and committed companies which could be very helpful by providing free access to the media (public service announcements, editorials, regular columns). They could also include the logo and promotional messages in their own promotional vehicles (e.g., supermarket fliers, package inserts, shelf talkers, POP displays, print ads, etc). The leverage these companies could offer through free promotional vehicles, presented Aubrey and Loma with the opportunity to create more targeted campaigns. This new campaign could be developed inexpensively in cooperation with the large member companies. Their involvement in the campaign could also strengthen their commitment to the goals of ACP.
The Task at Hand
Aubrey and Loma had only two months to work on the promotional campaign. In this time, they had to come up with a creative concept for the campaign, develop a media plan by consulting the Canadian Advertising Rate and Data (CARD), and prepare a general sales and promotional plan for approval. Once approved by the Board of Directors, they could then call local media production and promotional design houses to get quotes on the estimated costs of their new campaign. Tune was running out.
Altogether, Aubrey Palmeter and Loma Bremner faced a difficult task in 1990 - with limited time and human and financial resources, their promotional plan had to find a way to reposition ACP as a distinct and dynamic organization that would deliver the promised benefits. They had to "revive" the organization in the eyes of its members, government purchasing agents, Atlantic businesses and consumers, and make the relationship to SDS clear. Aubrey and Loma had to communicate that Atlantic Canada Plus was very much alive.