McDonald's McRib . . . It's back!

That's right, it's back . . . McDonald's McRib sandwich returned to restaurants nationwide today.

Historically, it was up to the local franchises to decide if/when they wanted to sell the McRib – except in Germany where interestingly enough it's nearly always available.  However, the last few years McDonald's began running the McRib as a national promotion to great success and has decided to duplicate the event again this year.

Given its cult-like following and the amount of consumer excitement generated every time the McRib is re-released, some people might wonder why McDonald's doesn't just make it available on an everyday basis.

Despite its fanfare, the reality is that the sandwich does not actually sell at a fast enough velocity to justify everyday distribution.  In fact, this year's release date was originally targeted to be October 22, but McDonald's decided to delay the release due to unseasonably warm weather earlier in the fall.  That's right, McRib lovers can blame global warming for the delay.  As it turns out, McDonald's research indicates the McRib sandwich performs best in colder weather and specifically around the holidays, when evidently the appetite for pork is at its highest.

To it's credit, McDonald's has smartly realized it can use the McRib as a limited time only offer to drive traffic.  What began as a small promotion has actually turned into a brilliant marketing strategy where McDonald's effectively creates scarcity to drum up consumer demand and play to consumers' obsession for the sandwich.

And it works!  The proof is in the sandwich as well as in McRib's strong social media following on Facebook, Twitter, and even a consumer created unofficial McRib Locator website, which attempts to identify "possible" sightings of the McRib at McDonald's.

Pizza Hut creates a perfume, seriously!

What began as a marketing joke on Facebook, has now become an international public relations attention grabber, with even Conan O'Brien picking up the story.

It started with a simple set of questions Pizza Hut Canada posted on its Facebook page: “Do you love the smell of a box of Pizza Hut pizza being opened?  We thought so. If that smell was a perfume, what would it be called?”

Following the positive response from it's facebook fans, marketers at Pizza Hut Canada decided to actually launch a limited time only Pizza Hut Perfume, a new fragrance inspired by the smell of a box of pizza being opened. The pizza chain then offered the roughly 100 bottles it produced to many of the facebook fans who initially had responded to the original post.  This of course has generated thousands of additional media impression across North America.

Following the success of the stunt, Pizza Hut Canada's Marketing and product development director, Beverley D'Cruz, explained "for now, we've only produced 110 bottles of Eau de Pizza Hut, but who knows what the future has in store," she said. "The good news is people can enjoy the great smell of fresh Pizza Hut pizza any day of the week by ordering one of our signature crust pizzas."

Well some times grassroots buzz marketing really takes off...and generates a disproportionate amount of consumer impressions for a fraction of the cost of traditional media.  Even if it was a joke, its go consumers thinking and talking of Pizza Hut . . . and I honestly cannot remember the last time that happened.  While a comical execution, the initial post that helped trigger peoples positive associations with the scent of their pizza highlights how important stimulating all of the 5 senses are in delivering both a winning customer experience and great marketing.

Alright, for everybody out there still rolling their eyes about the thought of a Pizza Hut perfume, the amazing thing is this wasn't even the first time a major restaurant chain ran a scent based promotion to drum up their most loyal consumers as Burger King created a meat-scented men's body spray back in 2008. BK's "The Flame” embodied “the scent of seduction with a hint of flame-broiled meat.”

Why Walmart or Kroger could buy Hostess

The latest M&A rumor mill reports that both Walmart and Kroger are among a dozen or so potential bidders for the now bankrupt Hostess brands, which include classic American iconic brands such as Wonder Bread and Twinkie.

On the surface a grocery retailer buying a national packaged food manufacturer seems like an odd fit, because if either tore won the bidding process and ultimately integrated the business they'd most probably either pull the brands' distribution from competitors shelves or eventually get kicked out.  The resulting lose of distribution would almost surely mean that the brand sales would shrink resulting in a smaller business.

However, retailer times are a changing.  With the emergence of Whole Foods, Trader Joe's, Costco, Dollar Stores, and even Big Lots into the grocery space, traditional supermarkets like Kroger are facing more pressure than ever, while Walmart (the largest seller of groceries in the US) is also getting squeezed.  This means traditional grocery stores have had to differentiate themselves and give consumers new reasons to visit - developing winning private label businesses has been a major component if these efforts.

While supermarkets have seen success with private label and many retailers have even added multiple different private label brands, up until this point adding in exclusive national brands has not been a major strategy of in the traditional grocery industry.  The only notable exception that comes to mind is Walmart exclusive brand 'White Cloud' toilet paper, which was actually recently named Consumer Reports top toilet paper in the nation.  White Cloud was original created by Procter & Gamble and at one point was a leading 2-ply toilet paper in the U.S., but P&G decided to kill it and invest all their resources behind Charmin.  P&G then made the fatal mistake of allowing their trademark rights on White Cloud to expire and the right were quickly snatched up by Paper Partners, which later agreed to give Walmart exclusive U.S. selling rights.

On the other hand, departments stores have been proving that building a compelling exclusive brand strategy has worked to rebuilding store traffic and driving growth.  For example, Macy's, which has a stable of exclusive brands, reportedly generates over 40 percent of its revenue from private, exclusive and limited-distribution brands (including: Ellen Tracy, Threads & Heirs, mstylelab, Kouture by Kimora and Kenneth Cole REACTION men’s, American Rag, Charter Club, INC International Concepts, Martha Stewart Collection and Hotel Collection). JC Penney has been following a similar strategy by being the exclusive department store retailer for brands such as Liz Claiborne, MNG by Mango and Call it Spring by The Aldo Group.

Thus, it's not surprising that the concept will eventually make it's way into the supermarket space.  Supermarkets executives have become increasingly more savvy in acting like CPG manufacturers and now their private label development capabilities would allow them to easily expand the strong brand names to new products cheaply and efficiently because they could guarantee themselves shelf space and promotion support.  And there is no better platform to start building your exclusive brand portfolio tan on the back of iconic American heritage brands.

He "doesn't always drink beer", but he always represents Dos Equis

Jonathan Goldsmith, the actor who is better know as Dos Equis' titled "The Most Interesting Man in the World", is causing a stir by throwing his clout behind Obama and hosting a fundraiser for the president.

This political activism is evidently upsetting some consumers, who in turn are taking it out on Dos Equis by posting their displeasure on the brand's Facebook page. An Ad Age article captured the following quotes: "Since you are supporting Obama you just lost a customer". . . "Mexican beer for Obama............bye-bye Dos Equis"

Dos Equis moved to distance itself from the controversy by releasing a statement saying: "Mr. Goldsmith's opinions and views are strictly his own, and do not represent those of Dos Equis."  But unlike some celebrity spokesman, Goldsmith's character is closer to a brand mascot. Therefore, he's not only the face of the brand, but also encompasses the full essence of the brand image/equity.  So, how can his views not represent the brand in consumers' minds?

There's no doubt that "The Most Interesting Man In the World" campaign has been a tremendous success, perhaps one of the best advertising campaigns in recent CPG history, but anytime you leverage a spokesman you turn over some control of the brand to them. It would be easy for Goldsmith to highjack the brand, but it doesn't feel like he's doing that here and hosting a political fundraiser for the sitting president is far from committing a crime. So, in this case I think it's more what you do about nothing versus a real brand concern at this point. Sure the brand may lose a few consumers, but it's just as likely to gain a few and in the meantime pick up a little free PR.  The big question it raises, is does Dos Equis have a longterm transition plan?  At some point the brand will have to move on from Goldsmith and that transition will need to be made slowly over time as not to confuse or upset consumers.

The Classic Volkswagen Beetle Reinvented for 2012

I really like the new Volkswagen Beetle TV commercial.  It does an excellent job celebrating the iconic status of the VW Beetle in American folklore and then connecting that iconic status to today's world by showing the car is just as relevant and charming as ever.  Take a look...



Great job VW, Great job

Axe. Hair. It's What Girls See First

Axe is back at it again with a new controversial tv ad focused on its hair care products.

The ad tells a story of a budding office romance by showing a man represented by a cartoon of a man's hair and a women represented by a cartoon of a women's chest to play up the importance of the fact that hair is the first thing women notice in a man, just as the stereotype would be a woman's chest is the first thing the man notices.  Take a look...

I admit that I'm not the target for this ad as it is clearly focused Axe's prime prospect of teenaged boys.   Nevertheless, I do not think the ad is highly effective for a few reasons.  First, while it catches a viewers attention with its unique imagery of a women's chest, it's confusing and the viewer has to figure out what's going on and why.  Second, the ad is very weak in terms of branding and doesn't sell me on why Axe is uniquely positioned to help win the girl.

Consumer Good Manufacturers Are Going Retail

Consumer product good manufacturers are going retail.  Not sure when it started, but as an ex-P&Ger I'll give Procter & Gamble credit for starting the trend a few years ago with the launch of Tide Dry Cleaners and the Mr. Clean Car Wash

In the last few months this trend of CPG manufacturers opening their own retail stores appears to have accelerated.  McCormick recently opened a store in Maryland...

...while Dannon and Chobani have both opened up restaurants in New York City...

...and now Barilla, yep the pasta company, has also announced it will open its first restaurant.

So, what's behind this invest in retail outlets?  It's an attempt for brands to take stronger control of their value chain by owning the customer experience at point of purchase.  It also gives manufacturers a way to present, as well as boost, their brand equity in ways that aren't possible in a traditional grocery store.  Finally, it allows brands to uncover new consumer insights by directly interacting with its end users, test new products, and drive awareness.  Apparel brands have been doing this for years as they have understood the value of protecting their brand image and promoting the lifestyle aspect of their brands.  As brand experience continues to become a more important aspect of marketing, I'd anticipate this retailing trend continuing.

Avis No Longer Tries Harder

Avis recently announced that it was overhauling its brand strategy by retiring  its infamous tagline "We Try Harder" after over 5 decades and replacing it with the new tagline "It's Your Space".

The move is being pioneered by Avis' new CMO, Jeannine Haas, whose prior work experience includes stints at American Express and Ford Motor Co.  In a recent interview Jeannine explained the move by saying "Consumer-centric brands must always evolve in order to keep pace with ever-changing customer needs and preferences . . . Avis is evolving as a premium brand to better meet those needs. . . [the goal of the re-branding is to be] reflective of [Avis'] ongoing mission to be a customer-led, service-driven company, and presents the brand in terms of the customer experience and the advantages inherent in renting from Avis"


The new tagline, "It's Your Space", is supposedly targeted at business travelers and hypes up the fact that business travelers can recharge or be productive in the sanctuary of the car cabin. Avis' website even says, "With Avis it's more than a rental. It's your space."

My first reaction to this new marketing and brand strategy was it is a bad idea, my second reaction is its an AWFUL idea. . . Now I have no doubt that Jeannine and her marketing did plenty of consumer research that indicated "We Try Harder" doesn't resonate anymore with consumers.  But being customer-centric doesn't always mean taking what the consumer says literally.  My guess is that the essence behind the tagline is just as relevant as ever, it's just the customer experience has drifted far from this ideal.

In my opinion, "We Try Harder" is not just a tagline, it's a deep part of the brand's DNA and an important part of the consumer equity.  As a opposed to moving away from "We Try Harder", Avis should have doubled-down behind it - proving to consumers in this day and age how the customer experience is noticeable different, noticeable better because of Avis trying harder to please their consumers.  It's about having more agents, more smiles, more consumer choices, more flexibility, shorter lines, and fewer fees.  It's unique, it's ownable, it differentiates the brand from the other car rental companies.


An old "We Try Harder" commercial:


New "It's Your Space" commercial:



The new tagline, "It's Your Space" glorifies the car, which is nothing more than a commodity in this business.  The ad is generic, it could be for any car company.  It moves the brand to a place that's no longer unique in the American landscape.  My guess is this re-branding effort will be shorter lived than the new CMO can imagine and "We Try Harder" will be re-instated to its rightful place as a classic American tagline.

What the Ryan VP pick could mean for both sides?

Sorry in advance for a political related post, but I like to think about elections as giant marketing campaigns and a Vice Presidential choice can be viewed either as your first major line extension or at least a big defining part of your brand equity.

The Ryan selection confirms the Romney team intends to try to steer the election to a single campaign issue - the economy.  Throughout the primaries and over the course of the last few months, Romney's chief motto has been about putting job creation first.

While there's no doubt the economy is Romney's 'area of expertise', interestingly enough, the democrats have been successfully attacking Romney's record on job creation by citing his record as Massachusetts and Bain, as well as, hammering him on his tax ideas and potential tax evasion - essentially trying to undercut his area of strength.  Romney realizes that the economy, however, is his only hope to win an election against a sitting president who is well liked on a personal level and who's foreign policy has been generally recognized as strong, especially for a democrat.

Therefore, picking Ryan as a running mate essentially allows the Romney team to retrench around the economic issue as Ryan is best known for his controversial, but bold budget plans that call for dramatic cuts in spending and overhauls to the social safety net programs.  Republican's have praised the choice of Ryan specifically citing him as a 'policy guy' who is all about the 'numbers'.  Ryan gives him a team that can republicans can market as economic experts to help fix the current status quo.

If I was in charge of Obama's strategy - I'd use the Ryan pick to ladder up the current attacks on Romney's character (the focus over the last few months has to be to drive a deficit of trust - tax evader, job exporter, potential SEC fraud) to a bigger picture campaign idea.  The campaign idea would be "It takes heart" and it would center around branding the republican ticket as being heartless, number guys only concerned about a ruthless pursuit about the bottom line - doing whatever it takes to maximize Romney's pursuit of profits despite the human costs (outsourcing jobs, tax evasion, flip flopping on issues, tax cuts for the rich) and Ryan's pursuit of cutting spending despite the human costs (healthcare, medicare, social security, education).  Obama needs to highlight the real costs of the ruthless pursuit of one signal goal. The fact that a CEO has the luxury of focusing only on profits to make shareholders rich, while the President has the responsibility to maximize the pursuit of happiness for all Americans (not just the wealthy).

Obama needs to show he is still the candidate of heart - the candidate of compassion and the little people, the champion of the middle class, retired voters, and struggling families - and these voters are looking for somebody who understands their problems, who will go to bed thinking about helping them, and will lead from the heart not the wallet.  Obama should start preaching how a president needs to lead with his head and heart to ensure the welfare of Americans whether its protecting them from foreign enemies (Bin Laden), improving their health (healthcare), or maximizing the pursuit of happiness (investment in education, infrastructure, science, jobs). Every time Romney or Ryan point to policy, respond by asking "at what cost?"  Continue to shift the discussion from the bottom line numbers to the path of potential destruction to the middle class required to achieve the policy they push.

Romney's biggest struggle with voters is much like John Kerry or Al Gore, he jut doesn't connect with the average voter.  He comes off as a robot stiff...Obama can use this as he ladders the campaign up from a policy debate on economic numbers to a bigger issue of heart.

Romney and team need to be ready and be able to connect their policy to very big middle class benefits not sacrifices, it cannot just be a trickle down or theoretical effect, its got to be real and policy benefits have to be seen as short term.

Who are the Olympic Advertisers and Sponsors again?

A new consumer study completed by Toluna Global Omnibus illustrates that consumer awareness and recall of what companies are Olympic sponsors and advertisers is surprisingly low.  The graph below illustrates the brand recall by company (unclear if this is aided or unaided awareness):

There are two notable take-aways from the data above.

1. 5 of the top 16 companies (including 2 of the top 5) got credit for being a sponsor without actually spending a dime on Olympic advertising
2. Even Coca-Cola, the brand with the most recall, has shockingly low awareness of sponsorship, with less than 50% of consumers aware of the linkage to the Olympics, and 28% of consumers crediting their ads back to primary rival Pepsi

These data points bring two thoughts to mind, first the investment in sponsorship doesn't seem to equate to a considerable amount of revenue upside.  Second, brands are really doing a bad job of differentiating their advertisements and breaking through to drive recall.  

I posted a few days ago about how many Olympic ads all seem to blend together, so check that post out if you haven't and watch the three example ads in that post.

Sear's appliance blood in the water?

As Sear's continues to fade away in the landscape of US retailers with over 100 store closures this year, its competitors are sensing the blood in the water sort to speak.  Appliances have always been a staple for Sear's, a source of traffic, revenue, and profit.  Not just through the sale of the actual appliances, but also selling add ons like Sear's product warranties and delivery/haul away services.

Sear's traditionally carried one of the largest overall selection of appliances and it also had a lot of consumer pull behind it's private label Kenmore brand.  But as Sear's struggles deepened they even agreed to let Costco sell a limited assortment of Kenmore appliances.  As Sear's grip on the appliance market continue to slip, competitors such as Best Buy, Home Depot, and even Walmart are moving to increase their assortment to try to woo more sales out of their consumers.

So goes appliances, so goes Sear's.  So look for Sear's to double down and fight to retain market share, for Sear's sake, you only hope its not too late now that blood is in the water and Kenmore is out of the bag.

Ragu TV Ad Double Take

When a kid catches his parents in bed, Ragu can help?  What?   That's right, Ragu, the pasta sauce company, recently launched a new TV ad campaign bringing a bit of humor and shock value to break through and get noticed.  The ad is titled "A long day of Childhood calls for America's favorite pasta sauce".  Take a look...

First, the ad is hilarious and shocking, especially for an ad the made its debut during the family friendly Olympics - so it without a doubt will clearly breaks through and gets noticed.  There is also likely good brand recall, because it is is very unique, has solid branding, a catchy little jingle, and the drama at the beginning of the ad keeps you watching all the way through.  However, it doesn't exactly make me want to buy pasta sauce - if anything it makes me lose my appetite a little bit.  The big question is does the ad go too far?  Also does light and funny humor go with a thick and chunky pasta sauce? Maybe I'm over thinking this one.

New research by ad-testing firm Ace Metrix proves that while funny ads may get high marks, funniness had little correlation with effectiveness and in fact, funny ads were slightly less likely to increase desire or purchase intent than unfunny ones

Ragu's other adds this year also have a bit of spunk and humor . . . but clearly not the same level of shock value.

Now I'm clearly not the target consumer and the ad will definitely get a lot of social media buzz so it will be interesting to see how it plays out in terms of driving the business . . .in the meantime at least it gets people talking

Is the proposed NYC soda ban worth it?

A new study in the New England Journal of Medicine, one of the most respected medical journals in the world, examined the impact of the Mayor Michael Bloomberg's proposed NYC soda ban.  The soda ban would limit sugar-sweetened beverages to 16oz, essentially banning supersize drinks.

The study suggested that the 62% of all drinks currently consumed at fast food restaurants would be affected by the ban, with the mean caloric intake per beverage ~200 calories today.  The study goes on to suggest that if all these consumers downsized to a 16oz sodas, the average calorie saving per consumer would be ~60 calories per person.

So I have to ask is 60 calories per person worth the effort of the ban and the backlash/outrage associated with it?  Well, yes and no.  Yes, if you assume a person will consume those 60 calories a day every day of the year adding up to 21,900 incremental calories per year.  If you assume there are 3,500 calories per pound, that's over 6 lbs of extra sugar a year in weight, which could have serious health implications over the long-run.  But, no if you assume infrequent consumption.  Net-net, I was surprised the ban only cuts the caloric intake by 60 calories per person on average, but also surprised how quickly just 60 calories a day adds up to real numbers.

"There's nothing soft about it" - Sprite, really?

Sprite just launched a new marketing campaign using the tagline "There's nothing soft about it", targeting teens (my guess urban teens).  The campaign is built around the product's "intensity" and the first ad even starts with the line "This is way more intense than I was expecting!" 



While I understand the want to have a brand equity built around being intense and bold - especially for an urban teen consumer target, I think it's a bit of a strange place to take Sprite because the product profile doesn't seem to match the positioning.  Is it me, or is Sprite one of the most vanilla of beverages in terms of the flavor profile being very traditional vs. edgy?  

Given the fit with the product taste profile is a big question, I have bigger doubts on the impact of the message - just because you say your intense doesn't mean people will believe it.  The other issue I see with this new positioning is it seems to conflict with the historical brand position of being ultra refreshing.  Intense might be good in consumers' minds, but I doubt there is much overlapping association between intense and refreshing.  Net-net, I might be proven wrong in the long-run, but I think this rebranding is just a poor fit and consumers will struggle to give Sprite permission to play as an "intense" brand.

Coming to a mall near you . . . your grocery store?

As malls try to fill the empty real estate left behind from failing big box retailers such as Borders, Circuit City, Sears, etc...more and more mall landlords are looking to grocery stores to fill the void.

Grocery stores bring traffic and regular visits while not cannibalize sales from exiting retailers.  Target was one of the first stores selling grocery products to step into this opportunity, but more recently Trader Joe's, Whole Foods, and other more traditional grocery stores have also taken advantage of an existing consumer base and the ability to negotiate favorable rent terms as malls seek tenets willing to lease larger stores.

Obviously, these grocery stores have to realize they are unlikely to pull in too many convenience shoppers who would be resistant to dealing with mall traffic and tough parking.  Therefore, its important for these grocery stores to consider a dual location strategy - e.g., both on and off mall property to successfully grab as much market share as possible.  But nevertheless, seems like a win-win.

Amazon to surpass Wal-Mart?

Some retail experts are predicting Amazon will surpass Walmart as the largest retailer by 2020.  According to yahoo finance, Amazon reached $54 billion in revenue last year vs. Wal-Mart netting $455 billion in revenue - so its anything but a sure bet.

However, there's no doubt that Amazon has dramatically changed the way that many American's shop.  On big ticket items, Amazon stole the show by allowing consumer to skirt paying sales tax - although that advantage is ending shortly in many states.  Then there was Amazon Prime, free 2 day shipping on anything with an annual $50 membership.  Rumor has it, Amazon's next big game changer is going to be same day shipping on most items.  Think about that revolution.  Amazon is without a doubt changing the retail equation and a shift in the balance of power is already underway and their loyal army of shoppers is growing especially with millennials.

Retail giants have risen to dominance only to have fallen in the past (e.g., Sears), so I don't doubt the shift and the very really possibility that Amazon could overtake Wal-Mart in the next 8 years. Still, I for one think there will always be a major role for traditional brick and mortar stores.  Americans are consumers, they like to shop, they like to browse, they like to stumble on surprises and find new items they never knew they needed.  So, it all comes down to how does Wal-Mart react to the obvious shift in momentum.  Do they stay the course and bunker down or adapt and make they're customer experience irreplaceable?  If so they better get started today because the customer experience is a detriment today

BMW Olympics Ads Targeting Women?

Anybody else notice that it seems like BMW is switching up its traditional formula of targeting men and hyping their cars' performance with a focus on speed and handling?

While watching the Olympics, I've noticed a number of new BMW ads that appear off equity for the sports car manufacturer both in that they appear to be targeting women and in that they are talking up all its technology and comfort benefits (e.g., rearview camera, direction/mapping, etc.) vs. driving, performance, handling.  Take a look...



While some of the ads are infused with a nice bit of humor and are selling nice features, they are a far cry for ads like this one, which are more on equity with the ultimate driving machine...

Now I get that the Olympic television audience tends to skew more female than traditional sporting events and there is data suggesting the average woman tends to be more concerned with a car's features than how much horsepower is under the hood, the ads just seem out of character for BMW.  While its always nice to try to appeal to a wider audience, as soon as you have to move off equity to do it you risk diluting the brand, so I'd recommend BMW start selling their performance again.

Cool New Product: McCormick Recipe Inspirations

So I'm the farthest thing from what you'd call a chef or even in a novice in the kitchen, but in a recent shopping trip at my local grocery store I came across McCormick Recipe Inspirations - a line of convenient spice kits that built around sophisticated (at least for a non-cooker) recipes. Recipe Inspirations gives you McCormick’s recipes with each packet including the pre-measured amount of spices and herbs.

The product hits dead on the convenience trends for the consumer, and of course McCormick and the retailer win big because the price per ounce is considerably higher than if a consumer was just buying the regular spice jars.  In reality, it probably also attracts a consumer who typically wouldn't even buy all the traditional spice jars because they are less cooking involved or at least serves as a sampler pack of sorts.  My only knock is it shouldn't be shelved in the spice aisle, it would be the perfect product to place over by the chicken, meat, and fish departments.

Olympic Ads Tug the Heart, but Have No Recall

I posted earlier about how P&G's olympic ads tug at the heart, but I would expect them to have limited brand recall...here's the ad I referenced

Well, I'd conclude that many other Olympic advertisements are brilliant creative, but ultimately all have the same problems...

Here's my favorite of the Citi Olympic Ads:

Again, it's brilliant creative, no doubt, I just doubt few consumers will walk away remembering it was a Citi ad.

Likewise, the creative in this Visa Ad is great...

...and Morgan Freeman nails the voiceover, but really at the end of the day all of these ads have to be running together in consumers minds

Obama vs. Romney is starting to look like Mac vs. PC, a case of reverse branding

Anybody else notice how political advertising has usually the opposite objective of consumer product advertising?  What I mean is political ads are usually focused on trying to rebrand the candidate's competitor as something negative vs. trying to sell the benefits of their own candidates.  For example, Romney has branded himself as a job creator, but the Obama team is focused on branding Romney as untrustworthy.  

Like any good marketer their anti-Romney campaign keeps pushing 'untrustworthy' as the primary theme or essentially trying to develop a reverse brand equity, and the marketing campaign supports this benefit statement with several different platforms of reasons to believe that help reinforce the equity, such as:

1) Suggest Romney will say anything to get elected and switches viewpoints when its convenient

2) Suggest Romney was responsible for outsourcing US jobs while at Bain

3) Suggest Romney lied about when he left Bain and may have committed securities fraud by doing so

4) Suggest Romney is hiding his money in tax havens because he is refusing to show his historic tax returns

This effort has forced Romney to spend a good portion of his time denying these charges, which just makes him look defensive and less trustworthy, especially because he has stubbornly refused to show his tax returns - the only proof of his innocence.  While its unfair, Romney started his campaign with a deficit of trust, not only because he's running against an incumbent, but also because the reality working against him is that many American's have a mistrust of the Mormon religion because different scares many people even in this day and age.

While I will not openly support or condemn these attacks on trust, the execution of the campaign is brilliant from a marketing strategy standpoint and follows the perfect formula for reverse branding and ingraining the equity/benefit in consumer/voters minds. A clear benefit that strongly resonates, supported by a clear reason to believe, and then when that reason to believe's shelf life expires and it's impact/breakthrough starts diminishing, rotating to new reasons to believe that all ladder back up.

Outside of politics, marketers rarely get a chance to reverse brand a competitor.  Though the best consumer product execution of this strategy was by Apple in their infamous series of Mac vs. PC ads:

Is it just me or is Obama vs. Romney starting to look like Mac vs. PC?  Reverse branding works when supported by enough reasons to believe.

Why is Proctor & Gamble advertising P&G?

As a former P&G marketer I'll admit that I have a lot of P&G loyalty, but every time I see one of the P&G Olympic advertisements I scratch my head.  It's not because I don't like the ads, you have to be heartless not to feel the emotion when they air the "Thank You, Mom" campaign...



...it's just I want to understand the end game for P&G.  There's no doubt the ads are emotionally moving, but the brand recall is all about P&G a large corporation that consumers have no emotional connection to, as opposed to say Pampers or Tide, which have a ton of emotional equity built up in the hearts and minds of consumers.

In short, I want to know what is the company's long-term strategy.  I say long-term because if the company was just trying to boost sales of its current business, there's no doubt it would have a higher ROI throwing this money behind an ad that builds up one of its leading billion dollar brands.

Such as these ads:





If I had to guess, the logic is that the overarching ads focused on P&G provide the backbone of the campaign and help tie all the individual brand ads together, but I'd actually suggest that the overall ad dilutes the individual brand ads because at some point they all start blending together in the consumer's mind.  Either way, its tough to try to build an emotional connection between a billion dollar conglomerate, and even if you do, then you still have the uphill battle of educating consumers on which brands are even made by the company.  Love the "Thank You, Mom" ads from a heart strings standpoint, but have a tough time believe its providing the company the biggest bang for its buck

Is Pepsi the "next generation" of yogurt?

Early this week Pepsi announced it is entering the Yogurt market via a joint venture partnership with German dairy company Theo Müller.  The joint venture will be run as the Müller Quaker Dairy and called Müller by Quaker and will begin by being sold in the northeast US.  It appears that they will offer at least 3 different types of yogurt: conventional, Greek, and Fruit Up (fruit mousse in top of the yogurt that gets stirred in).  The yogurt will be packaged in a square contained with one corner filled with an ingredient that the consumer can mix in; including caramelized almonds, tiny chocolate-covered crunch balls and granola.

Pepsi, which in addition to its traditional beverage business also owns Quaker, Gatorade, Tropicana, and Frito-Lay, is looking to diversify its portfolio as the soda category continues to be squeezed by health trends and the company looks to jump start long-term growth.


Why Yogurt?
Yogurt offers Pepsi three advantages.  First, its a fast growing category (+9%) that outpaces traditional grocery categories as its alined with consumer health an wellness tailwinds.  Second, it gets Pepsi into a new section of the store - the dairy aisle.  And third, Pepsi could likely leverage its refrigerated Tropicana DSD network to capture significant cost scale.


Will it be successful?  
Pepsi research suggests that Americans consume ~12 pounds of yogurt a year, which is half as much as Canadians and only a third the amount of Europeans.  Pepsi attributes this gap to the US category offerings being boring vs. international offerings: “It’s been an ‘I gotta have it because it’s good for me’ kind of a product . . .The 'wanna have it' was missing” according to Dr. Mehmood Khan, who oversees PepsiCo’s global research and development and was interviewed in a recent New York Times article. According to that article, Müller by Quaker will fill the current product offering void by offering a a new variety yogurt with its own unique texture that is between Greek and conventional yogurts.  The product will be marketed under the tagline "European for Yummy".  


While General Mills (Yoplait) and Dannon make up 50% of category sales, much of the recent category growth has been driven by Greek yogurt brands Fage and Chobani.  The fact that these smaller brands have gained traction and shelf space would suggest a brand backed by a CPG manufacturer with the clout and deep pockets of Pepsi would also be able to muscle its way into the category assuming the product is truly differentiated and delicious.  It also wouldn't be surprising to see Pepsi bring its soda strategy to life in this category by supporting the brand launch with an enormous advertising budget as well as running a significant amount of promotions focuses on BOGO's and bulk discounts.  The yogurt category has seen plenty of innovation over the past several years and I believe many category consumers are willing to experiment with new brands and flavors, but the category will remain highly competitive and unlike soda its wont just be a two horse race.


In conclusion, I believe Pepsi can clearly make a splash in the category and will help fuel overall growth.  However, I have a hard time believing the brand will climb higher than a #4 share behind Dannon, Yoplait, and Private Label, and may even have a hard time in the short-term outselling some of the hot Greek Yogurt brands.  One could see the brand, perhaps, ultimately reaching a 10-15% market share over the next 3 years.

Who let the Red Lobsters into the Olive Garden?

Darden Restaurant Inc, the operator of Red Lobster and Olive Garden, has opened three Red Lobster - Olive Garden combined store locations in smaller cities that they believe cannot economically support standalone locations.

As the picture below shows, the locations have two separate entrances entrances and dinning rooms, but reportedly share a bar area, kitchen, and bathrooms. Customers in one dinning room cannot order from the menu of the adjoining restaurant.

On the surface the strategy appears to make strategic sense, reach new customers by creating economies of scale to control costs and deliver incremental revenue.  Nevertheless, I question the overall strategy.  I would argue both restaurant chains have lost they way from their historic brand compasses and now currently suffer from a lack of authenticity.  For example I would venture to guess that many middle class Americans question how fresh the seafood at Red Lobster really is, while Olive Garden is hardly seen as real italian.  The fact that consumer sentiment has drifted from these initial positions is due to business decisions putting profit in front of brand equity.  The two in one concept further plays up the chain aspects of both brands and helps continue diluting their authenticity.  Then there is the old marketing rule that if do two things well enough it means you don't do anything great.

While Yum brands has executed this strategy on many of their fast food and QSR brands (KFC, Taco Bell, Long John Silvers, and Pizza Hut) with a major difference versus Darden's full-service restaurants being that they usually have joint dinning rooms, which enable families to all order different foods and then sit together delivering a benefit for the customer.

Applebee's "it's not a science show"

Give Applebee's credit.  It seem to understand its consumer and isn't trying to convince people it's something its not...For those that haven't seen it, Applebee's recently launched a new set of tv ads creating parodies off of the latest foodie trends - namely farm to table, heirloom, etc - in an effort to connect with their core consumer who are just looking for reliably good food at a good price.


I like the first ad better than the second ad because it hits home harder on the primary benefit that the food is a "good value and taste good" - because that's really why a consumer would choose to go to Applebee's.  Nevertheless, despite the parody, the ads still help portray Applebee's as using fresh ingredients - which is a nice halo benefit.


While I love the drama of the ads and believe they truly hit on relevant consumer insights, I have two concerns with how effective the ads will be in driving traffic. First the parody drama is a bit long, so there is a risk their core consumers may tune out the ad before the core message, and second, there could be strong brand linkage at the end of the ads. 


Overall though, bravo Applebee's, bravo...

Best Buy have a showroom problem?

It's no secret that Best Buy has had many business challenges lately as the chain faces declining sales and potential door closures.  Many analysts have pointed to showrooming for online vendors as one of the major culprits of Best Buy's woes.

Showrooming is the concept that consumers browse a product in a traditional brick-and-morter store, only to purchase it online at a cheaper price.  The primary case study of showrooming has aways been consumers browse and compare TVs in person at Best Buy and then ultimately purchasing online at Amazon where they traditionally haven't had to pay sales tax.

A recent analysis of the Stevenson Company’s TraQline market studies by the Consumer Electronics Association shows that while showrooming may be allowing Amazon to cannibalize customers away from Best Buy, its actually other brick-an-morter stores that appear to be more of an issue.

The study suggests that when it comes to purchasing a new TV, 48% of all TV shoppers visited Best Buy to browse the TV section.  Of these shoppers, over half (56%) ultimately purchased a TV at Best Buy, while 44% ultimately purchased somewhere else.  So where did these consumers purchase their TVs?  The TraQline data suggests that of the shoppers who visited Best Buy, but purchased a TV elsewhere: 

• 31% purchased at Walmart
• 9% purchased at Costco
• 8% purchased at Amazon
• 7% purchased at Target

So, while Amazon is siphoning of 8% of purchasers and one would expect that number to continue climbing, the data clearly indicates that Best Buy has larger challenges than showrooming for online vendors.  The data suggests Best Buys value equation is less compelling than many competitors.  As Best Buy continues to lose shoppers to multiple competitors that consumers feel offer better value, it needs to reexamine its overall value equation and better define its proposition for consumers.

Walgreens meet Boots

Walgreens announced it is buying a 45% ownership stake in European pharmacy giant Alliance Boots GmbH for $6.7 billion, with an option to buy the entire company before 2016. Together the two chains will operate more than 11,000 drugstores in the U.S., Europe and Asia, under the Walgreens and Boots banners.  While investors appear concerned with the deal as Walgreens stock slide 6%, here's why I like the deal:

• Allows Walgreens to bring Alliance Boots' strong private label stable of products to the U.S., including No7, which is the United Kingdom's leading skin-care brand. Its interesting that while the US drug store industry average private label penetration rate is only about ~14% (30% in healthcare), industry sources suggest Boots PL penetration rate is > 40%. Now some of this delta is due to differences in consumer psychology, but nonetheless, Boots' products and expertise should be an infusion for Walgreens. Walgreens has executed this strategy, albeit on a much smaller scale, following its acquisition of Duane Reade, a New York City based drugstore, which brought them "Delish", a premium private label food brand. So this move allows Walgreens continues to build its stable of exclusive brands that both have good consumer pull and high margins, while enhancing its value equation as according to SymphonyIRI’s recent Brand and Retailer Loyalty survey, >80% of consumers feel that store brand products are equal to or better than national brands when it comes to quality and packaging, while 95% feel that store brands provide a better value than national brands.
• Makes Walgreens the largest single purchaser of prescription drugs in the world, creating significant buying power to increase margins on the the most profitable part of the store already
• Creates the largest global pharmaceutical wholesale and distribution network with more than 370 distribution centers delivering to more than 170,000 pharmacies, doctors, health centers and hospitals across 21 countries
• Boots also gives Walgreens access to emerging markets like China.

Now it's tough to say from an outsiders perspective if Walgreens paid too much for the deal, but the merger at least opens up a realm of both top and bottom line possibilities.

JC Penney Changing Course?

After only 8 months on the job and in the midst of JC Penney's rebranding/turnaround efforts, Michael Francis, president, responsible for merchandising, marketing, planning and allocation, product development and sourcing has "resigned". Francis who was handpicked by CEO Ron Johnson based on their experience working together at Target had been Target's Chief Marketing officer prior to moving to JC Penney.

As President at JC Penney, Francis was technically responsible for the marketing of a controversial new pricing plan that aims to get rid of hundreds of sales events, as well as, merchandising and product development. However, many outsiders claim it was actually CEO Ron Johnson who was the architect of the new pricing plan. With the turnaround under performing expectations and JCP backtracking on a portion of their strategy, the resignation appears to be a way to buy time with investors - although shares did drop 6% after the news of the resignation became public. In the same press release, Johnson announced he will take direct responsibility and oversight of the company’s marketing and merchandising.

Three things pop to mind with this latest twist in the JCP saga:

(1) Turnarounds/brand restages are never quick and easy, business results usually get worse as a company invests in the future and consumers adjust their habits/practices. Being a public company sometimes creates a barrier to delivering long-term sustainable change because of this short-term pain.  JCP should expect at least 3-4 quarters of pain at minimum assuming they're doing everything right, and a lot longer if they are mis-firing on their strategy.

(2) Turnarounds must be based on significant consumer insights and must pivot off of a solid brand foundation as opposed to try to leap to a totally new brand equity - in other words the best brand restages are evolutionary not revolutionary. Additionally, the relaunch need to be communicated in a manner that consumers understand and in a fashion that's consistent with the consumer insights its based on. It appears to me that JCP is trying to leap too far too quickly and would be better served making a series of pivots.

(3) The CEO is not usually the best person to lead a consumer driven marketing strategy because they are usually the person in the organization farthest removed from the actual consumer.  Here's to hoping that Johnson relies on people closer to the consumer to help guide the strategy and commercialization.

The JCP turnaround efforts will be a fascinating story to continue to follow as its likely to be a long/winding rode for the near future

Pampers "Vertical Chair Climb"

I really liked new Pampers diapers TV commercial comparing a baby conquering his/her first chair climb to an olympic sport:

"The Vertical Chair-Climb. It's not an Olympic sport, but it takes real effort and it takes a diaper that fits their every move. Pampers Cruisers with 3-way fit adapt at the waist, legs and bottom for up to 12 hours of protection and all the freedom to play like a real champion. Pampers. Proud supporter of babies' play"

Not only does this ad immediately grab your attention, but it does a great job of letting the creative communicate the product benefit and reason to believe in a compelling manner, without beating the consumer over the head with a hard sell by packing in branding or forcing in too much of a technical product demo.


In fact the ad is far better than the following ad that's in the same "Olympic" campaign, which overdoses the viewer with very heavy branding and a few rather long technical product demo,

While the two ads communicate a similar message, the first ad does a far better job capturing a the views attention by starting with the 'drama' vs. branding and staying true to a single minded benefit and one clear reason to believe.

Only a Honda is a Honda, or is it?

Honda has recently launched a TV campaign trying to differentiate Honda from it's competitors with the tagline "Only a Honda is a Honda". The tagline is great, but does it really say anything? Or is it trying to draw a point of differentiation where none exists?

Honda rose to prominence in the U.S. in beginning in the 1970's with an equity built around affordable, dependable, and fuel-efficient cars. This strategy helped differentiate it from the American Big 3 and win market share. At the same time, Honda was able to separate itself from its compatriot, Toyota, because it leveraged a slightly sporty look supposedly born from its founder's racing history.

Fast forwarding to 21st millennium, American, European, and Korean cars have all essentially caught up with Honda/Toyota's reliability and fuel efficiency - essentially eliminating a big portion of what had made Honda a Honda historically. Not only that, but the Korean car manufacturers have enhanced the pressure on Honda/Toyota by continuing to undercut price, while offer a superior warranty and even including some historic luxury items in at base prices - thus creating a highly competitive value equation to help overcoming their weaker historic brand equity. Thus not surprisingly, Honda’s U.S. sales which were more than doubled the combined U.S. sales of Hyundai and Kia as recently as 2007, were only 1 percent higher last year.

So, when Honda says "only a Honda is a Honda" in their latest TV ads its moving into damage control mode.

While the ads don't mention any competitors by name they do make remarks implying that Honda is still the most reliable car on the market. For example one line claims that just because the competitor's warranty is reliable, it doesn't make the car dependable - clearly a reference to Hyundai's famous 10 year warranty. However, it's notable that Honda makes these assertions in a very vague and understated fashion - suggesting it may no longer have the ability to legally claim superiority. While Honda's brand equity gives it a reservoir of credit when it comes to dependability, the gap to all other car companies will continue to deteriorate as other manufacturers catch up. Thus, Honda must look to evolve its point of differentiation in order to remain a leader in the long-run.

Investment Thesis - Making Toys R' Us fun again

Toys R' Us was founded in 1948 and went on to become the biggest toy retailer in the US. But by the mid-2000's, Walmart, Target, Amazon, Big Lots, and Dollar Stores had jumped into the game and all cut prices on toys forcing many toy stores out of business. Facing declining sales Toys R Us was taken private in 2005 by KKR, Bain Capital and Vornado Realty Trustin a $6.6 billion deal.

Under private ownership, Toys R' Us tried to remain a relevant player in the toy industry by increasing private label and exclusive toys at the retailer. The company also bought KB Toys, eToys, and F.A.O. Schwarz. The company also converted ~25% of its locations into combined Toys R' Us and Babies R' Us stores. These moves were an effort to protect itself from competition and drive traffic into the stores.

However, these points of difference have not proven sufficient to fully stop the bleeding. The competitive pressures facing Toys R' Us continues to intensify and as its Private Equity owners consider an IPO, its time for consider options for future growth of its toy business. More specifically, given Toys R' Us is being cannibalized by both low cost vendors as well as more convenient vendors and the shift to a more exclusive assortment mix and co-locating doesn't appear to be sufficient, the company needs to find an additional factor that will draw customers into the store.

A solution is to dramatically change the in-store customer experience in order to build a stronger point of difference from competitors, to help limit price competition. One potential game changing move would be to turn the center of the store into a large play area taking the best of the playground and combining it with the best of Chuck E. Cheese, while merchandising toys around it. This play center could even potentially be turned into a revenue generator via ticket purchases. Not only would the play area would operate as a traffic driver, but also a testing ground by taking the toys out of the box and let the kids (and adults) play. For anybody who can remember walking into the original New York City F.A.O. Schwarz as a child, it would also help bring back the magic toy store once seemed to have.


The concept of "shoppertainment" has been proven out on plenty of smaller scales.  For example, Jordan's Furniture, a Boston based furniture founded in 1918 and now owned by Warren Buffett, applied this principle in one of their stores by building a Motion Odyssey Movie (MOM) theater/ride in one of there stores in 1992 and then later added an Imax theater in a different store in 2002. These moves not only created an instant traffic driver, but also a clear point of difference that couldn't easily be duplicated by its competitors.

Toys R' Us growth can come from expanding their mission from selling toys to entertaining children in and out of the store.

JC Penney offers "A Not So Square Deal"

As part of JC Penney's turnaround strategy they launched a new "Fair and Square" pricing plan at the beginning of 2012. The chain that for decades relied on multiple promotions, percent-off sales, and coupons to drive incremental consumption, has decided to put an end to all of those promotional vehicles in an effort to become less reliant on trade activity. 


This new strategy seemed to make sense given they ran 590 distinct sales in 2011 and drove 70% of its revenue from products sold at least 50% off full retail price. Rather than slowly peel back on the number of promotions, JC Penney decided to go cold turkey and rip the band-aid off with its "Fair and Square" plan, which simplifies their pricing strategy around three levels: "Every Day", "Month Long Value", and "Best Price". The "Every Day" or EDLP price was also lowered 40% vs. the prior traditional high-low pricing strategy.


The only problem is somebody forgot that consumer habits are hard to break and consumers, especially consumers of brands with weak equity and low consumer loyalty, also have very low brand engagement. The low engagement means that consumers are unlikely to realize you changed your pricing strategy in store or in your tv ads, but they will notice you no longer have sales or coupons.  Therefore, even if the absolute price in store is the same or lower, the consumers perception of the price point may actually be higher or they may not be motivated to visit your store without the promotional stimuli.


Hence, nobody should have been surprised when JC Penney announced its latest sales figures: "Comparable store sales for the first quarter declined 18.9 percent. Total sales decreased 20.1 percent, which includes the effects of the Company’s exit from its outlet business. Internet sales through jcp.com were $271 million in the first quarter, decreasing 27.9 percent from last year."


CEO Ron Johnson reacted to results by telling investors “We have work to do to educate the customer on our pricing strategy and to drive more traffic to our stores”.  Anytime a business leader or market says we have to "educate consumers" that should be an immediate red flag. I'm not a believer that consumers can be "educated", and even if they could, its going to be extremely expensive. 


If a new product or retail customer experience aspect isn't intuitive enough for consumers to figure out in a 10 seconds glance, then its not going to sell very well to mainstream mass market. This is why any good new product or brand building strategy has to start with a strong consumer insight and be brought to life in a simple manner that is intuitive.


Now, just months after the launch of the new pricing strategy, Johnson is admitting JC Penney made some mistakes. First, they layered back in 5 extra best priced Friday events, and second, announced that "We're moving away from the word 'month-long value' because no one really understood that, to calling it what we intended to do, a sale . . . Our marketing isn't doing the work . . . We've got to get our pricing across"


While this moves will likely help some, I for one am doubtful this will fix all the woes. As coupons and deals, spur incremental purchase not only because of the low price, but also because they make consumers feel like they are outsmarting their peers and adding time limitations drives consumers to act versus month-long promotions that don't feel as special.

Presidential Symbolism

I'm just as fascinated by presidential politics as I am by brand building. With the upcoming presidential election, I'll be sneaking in the occasional posting on how the candidates are building their own brands, or in both candidates cases partially re-staging their images. As the campaign heats up, pundits will be analyzing every last word the candidates say, while Obama/Romney will each will look to twist the other's misspoken words against them. This got me thinking on the importance of leveraging classic American symbolism to convey a message, while both leaving the pundits no place to run and elevating themselves to Presidential status. To this end, below is a reposting from a blog I started (though only had one post) on election strategery.

ORIGINALLY POSTED ON FRIDAY, AUGUST 20, 2010

Mosque Mess

Overview: On August 13, 2010, the President spoke about the proposal to build a mosque two blocks from the site of the September 11 terror attacks.

What Obama said: "Muslims have the right to practice their religion as everyone else in this country...And that includes the right to build a place of worship and a community center on private property in lower Manhattan."

These comments have been criticized by many on both republicans and democrats alike because they either disagree with his opinion that the mosque should be built - a CNN poll finds nearly 70% of Americans oppose the mosque - or they worry that his image will take another hit as he becomes further linked with Islam.

While I am one of the 30% of Americans that agrees with Obama and appreciate his want to do the right thing, I believe there was a more appropriate way to address the situation given the sensitivity of the subject.

What Obama Should have Said: "On January 20th, 2009 when I was sworn in as the President of the United States I put my hand on the bible and I took an oath . I took an oath, solemnly affirming that I would preserve, protect and defend the Constitution. And that oath, obligates me to preserve, protect and defend freedom of religion for all Americans."

While the substance of the message is the same, by invoking the power of the presidential oath, the constitution, and finally the bible, Obama's message would have carried more weight. In changing his approach, he would have left less rope for his critics to run with and lifted him above the messy debate.