Dole Foods’ Director of Marketing Paul Panza Talks about the Changing Consumer

The Dole Food Co. owns some of the world’s most popular products. But it is hardly immune to the recession. Customers have changed where and how they shop, and Dole has had to adapt.

For example, it has changed its Internet strategy. The firm hopes its customers will speak out about its products and stay engaged with the brand.

Paul Panza, the director of marketing at Dole, talks about these demanding times and the company’s new online initiatives.

PROMO: The country is now officially in recession. How has this changed what you’re doing?

PANZA: We rethink our messaging for almost every promotion. We try to make sure we’re not throwing a message out there without thinking about the other concerns people have on a daily basis. We know that what worked in 2008 isn’t necessarily going to work now, given everything that’s going on.

P: What has changed about the way your customers shop?

P: They’re not buying as many items in a single transaction. We’re also seeing smaller sizes purchased now. It used to be that they bought the larger value size, but the price points associated with those offerings are now an obstacle.

P: How have you addressed these changes?

P: We’ve looked at the promotions we’re running, and instead of requiring someone to purchase four products for a particular price, we’re offering a hot price on a single item. Requiring someone to put up the cash to buy four or five units of something just doesn’t make sense in this economy.

P: How do you get that message out?

P: We use a lot of checkout coupons and FSIs. From a product perspective, we’re not looking to develop smaller sizes, but it has forced us to look at our portfolio and make sure we have the right product in the right channel.

P: Does a tough economy put additional pressure on CMOs?

P: It does. One of the biggest challenges that we face aside from the economy is the rising commodity costs that have impacted our costs of goods sold and our profit margins. Our ability to recoup that margin has always been in taking price increases.

P: How will an increase affect sales in this climate?

P: One of the challenges that we have now is we’re starting to see price elasticity factors going up — sales will drop because prices have gone up. It’s a circular issue that is difficult to step out of. A lot of consumers are just unwilling to pay that price and so they go to a substitute category.

P: Dole has significantly increased its online budget. How is that playing into your retail activities?

P: You’ve got to do something to create that relationship, and online gives us a way to do that in a way that a lot of other promotions don’t. Strategically, it gives us the chance to interact and maintain that connection. The brand has to matter to people, and the only way it can is if you have a relationship.

P: How many online promos are you running?

P: We’re actively running five to six a year. It used to be the first item to be cut when we had budget issues, but that’s not the case now.

P: How has your online marketing changed?

P: The online program was ill defined. It used to consist of a banner ad on a random Web site or a recipe contest. Now we make sure that whatever we do online works with the offline world, like the Dole Sweet Retreats promo we’re now running (see page 11). We need to work in concert with the touch points that are strong enough to remind consumers of what they may have seen online. That has a direct sales impact.

P: Is there a lot of interactivity?

P: We actively engage consumers and allow them to speak about our brand. In the end, knowing the issues that people have helps us better provide value not only to them, but to those who have the same issue but didn’t speak their mind to us. You take the good with the bad.

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