Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Alvin Concepcion - Citigroup
Alvin Concepcion – Citigroup
I just wanted to get your thoughts on how you are positioned from a pricing perspective on your pay as you go and monthly pass in light of the tough consumer environment.
David Kirchhoff
If you look at our price point for Weight Watchers compared to other commercial offerings we have an advantageous price point. It’s much less expensive to participate in Weight Watchers then other commercial weight loss programs. Furthermore with Weight Watchers because you don’t have to eat any Weight Watchers food the consumer has the opportunity to continue to participate in retail and look for good values in their grocery store as part of maintaining and sustaining a healthy lifestyle and so in that context from a competitive perspective we think that we’ve got a very good price position.
Certainly our real job if you think about it is 80% by our own surveys, 80% of weight loss attempts have been on a self help basis, people trying to do their own thing. Clearly the appeal of that in an economy like this is that doing your own program is technically speaking free. The issue is is that for too many it doesn’t work. They start the program on Monday and by Thursday you’ve quit.
Weight Watchers through basically its ability to provide a much higher level of efficacy and remember through clinical studies people that participate with Weight Watchers lose three times more weight then people that do it their own, we think that we have a very meaningful way of convincing those self help dieters that Weight Watchers is actually quite good value because it is the approach that is most reliably going to lead to good and sustained weight loss. And those are exactly the types of messages that we think we really have to drive as we continue to muscle through this economy.
Alvin Concepcion – Citigroup
How would you characterize the current ad market in terms of how the ad rates are trending and how should we look at that going forward in light of the elections?
David Kirchhoff
Most of our television advertising for North America is purchased in the up front market. We do have some direct response TV. But the majority of our spend is in the up front market which is already locked and loaded per se. And so we’re not seeing the likelihood of a significant impact on our advertising rates or our dollar per GRP rate in the fall campaign although obviously in an election year things can definitely get a little bit challenging. We think that we have the right set up to manage our way through that.
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