The CMO Interview: Michele Bedard

Sub-Zero Keeps Its Cool in a Value-Obsessed Economy

Marketing VP Says Consumers Now Seek 'Luxuries With Substance'

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YORK, Pa. (AdAge.com) -- Think you're having a tough time pushing product right now? Try marketing a $12,500 refrigerator.

That's what Michele Bedard is tasked with. As VP-marketing at Sub-Zero Wolf, maker of high-end Sub-Zero refrigerators and Wolf cooking appliances, her responsibility is not only developing brand, media and marketing strategy in the midst of a severe recession, but doing so for products that cost anywhere from $1,600 -- for under-counter, smaller refrigerators -- to upwards of $12,000 -- for its specialty Pro-48 model, with stainless-steel interior.

Michele Bedard, VP-marketing at Sub-Zero Wolf
Michele Bedard, VP-marketing at Sub-Zero Wolf
But despite the seemingly near-impossible charge, Ms. Bedard is unfazed. And while luxury goods have been one of the worst casualties of this recession -- sales dropped by double digits at the end of last year, and Bain & Co. recently predicted as much as a 20% drop in sales of luxury goods for the first half of this year -- the company continues to market and advertise. Ms. Bedard would not disclose the company's marketing budget, but said that while it has shifted money from traditional media to more direct, CRM and digital efforts, the company has not cut its budget.

"There's a good, firm belief at this company that marketing is really driving sales," she said.

Consumer insights drive the company's marketing. Sub-Zero Wolf relies on extensive market research from product owners, as well as kitchen designers, architects and retailers who plan for and sell their products, to design new products for the residential market. Sending a value message is key, she said.

"It's all about building terrifically designed products with great quality throughout," she said.

Ms. Bedard, 48, came to the family-owned, Madison, Wis., company eight years ago with a background that includes brand-managing stints at Volkswagen and Energizer.

At Sub-Zero, she reports directly to President-CEO Jim Bakke, grandson of founder Westye Bakke. Ms. Bedard said his long view of the company, as well as the close-knit, nimble staff, is what's guiding the company through this time.

Ad Age: Give us the CliffsNotes on the category. How would you characterize it?

Ms. Bedard: It's a huge category with major brands that we all know -- Whirlpool, Samsung and the other big guys. Sub-Zero is definitely in the niche, in the high end. Sometimes we're called the luxury appliance category. And in the last 15 years, that category has become more crowded because of the growth in the marketplace.

Ad Age: How do you deal with that added competition coming into a territory you really owned?

Ms. Bedard: We need to make sure we look ahead, not behind, and don't spend too much time looking at who's producing me-too products and strategies. Just give our audience what they need and ask for.

Ad Age: Sub-Zero, by any measure, is an aggressive marketer. What's the thinking about marketing inside the company? Do you report to the CEO? Is there a straight line to the top?

Ms. Bedard: Yes, I report to the CEO. We value the consumer, and we feel the consumer is very wise and they know what they want. Our target is homeowners who have really high standards of performance and design. They really cherish their home, and they have a passion for good-quality products that will give them fresh and delicious foods and wine. ... We also target a very important group of influencers: the architects, the designers, the remodelers, the interior decorators.

Ad Age: What functions fall under marketing at Sub-Zero?

Ms. Bedard: It's global marketing, brand communications and everything else. And we're very involved in product development. Product development is really at the core of the company, so the product engineers and the marketers are involved in making sure we come out with really terrific products.

Ad Age: When does marketing get involved with a new product?

Ms. Bedard: Right from the beginning we try to provide as much market insight as we can. We seek a lot of input from all our different audiences of consumer and owners. We also value the input of our retailers, our distributors and all those designers who specify our products to make sure that we come up with the right products.

Ad Age: Have you reallocated media spending because of the economy or because the web is more important to today's consumer?

Ms. Bedard: The role for more traditional media is there. Magazines [such as Elle Decor, House Beautiful and Saveur] and TV [shows such as HGTV's "Divine Design" and "Spice Up My Kitchen"] are really great ways to increase brand awareness and brand preference in our category. If you've ever remodeled a kitchen, everybody starts a kitchen project with a binder and ripping pages out of a magazine to really help develop the dream that they have. Online is really to engage our audience and tell the story.

Ad Age: How tough is it to own two high-end brands in this economy?

Ms. Bedard: This company has been around a long time, and in 66 years, we've seen downturns before, so it's really about taking the long view. Our brands are more relevant now. People want to make sure that what they invest in is worth every single penny. ... The collapse of the project business and the high inventory of homes certainly has affected us, but there is a lot of remodeling going on as well. Things are starting to pick up, and we know that good kitchen designers are still busy.

Ad Age: Have you changed your messaging at all to focus on value or particular features?

Ms. Bedard: Consumers are wanting to make smart purchases, and we've known for several years now that flaunting and ostentatious spending were out. That's no news to us. Our advertising and marketing strategy is really trying to take advantage of those trends. The recession has made this more universal. [It is more about] luxuries with substance.

Ad Age: What happens if, when the recession ends, it turns out there is a permanent change in the market and your target audience. How do you then regrow a consumer base?

Ms. Bedard: The home will continue to be a very important place to invest. Consumers want to stay at home, entertain at home, and create many great environments to create great moments with family and friends. The kitchen especially will be important. Along with that, consumers want to spend money on something that will be a long-lasting value.

Ad Age: What's the thinking behind Sub-Zero's digital and social-media strategy?

Ms. Bedard: Our content addresses everything associated with creating a kitchen but also with their personal passions like wine and cooking. We have a lot of videos that show consumers how to be inspired by Wolf, for instance. We've put those on YouTube. ... We have chefs on staff, and they help us with product training, product development, and they just happen to be great on camera, and that helps bring our product alive. ... We just started a Facebook page, and so far we have lots of fans -- consumers and designers uploading photos of their kitchens with genuine love for our product. It's important to be genuine and [offer] relevant content.

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