J.Crew Admits It Made Two Critical Mistakes

J.Crew sent an e-mail to its customers this week acknowledging and apologizing (well not really apologizing) for the two big mistakes it has made over the past few seasons:

1. Drifting the fashion style too far away from the brand core
2. Raising price above what the brand value proposition can support.

The email was sent as an informal memo from CEO Mickey Drexler and carries a very casual tone.  Take a read...

The refreshingly simple and conversational style of the e-mail definitely caught my attention.  I believe the messaging does the trick in terms of getting lapsed consumers to at least give J.Crew another look and may even help put J.Crew back in their consideration set the next time they are browsing for new clothes.  Based on a quick trip to J.Crew's website, the styles do feel more aligned with the brand equity than the past few seasons.  That said, the ticket price still feels more premium in many categories than I'd expect many customers to pay full price for.  Sure J.Crew may have invested in the quality, but observing that requires consumers to take a trip to the store and feel the product for themselves.  Given how reliant J.Crew has been on promotions over the past few season, one has to also wonder if they have trained their consumers wait for sales and not pay full price.

Coca-Cola "One Brand" Approach Likely To Fail

Facing declining soda category trends in the United States and flat category growth globally, Coca-Cola is launching a new go-to-market strategy aimed at securing its market share and growth prospects.

The heart of this new strategy is unifying Coke, Diet Coke, Coke Zero, and Coca-Cola Life under a "one brand" marketing brand campaign and packaging architecture design. Historically, the company has treated the variants more as individual brands. The new design will be rolled out in Mexico first this May, with other markets adopting the new packaging throughout 2016 and 2017, with the US likely at the tail end of the transformation.

The marketing campaign will be based on the "Taste the Feeling" concept and supported by 10 TV ads, digital, print, out-of-home, and point of sale materials. The objective of this effort is to have all variants of Coca-Cola will be unified under this message and speak together as one voice instead of separate marketing for Coke, Diet Coke, Coke Zero, and Coca-Cola Life.

The packaging design is also aimed at driving a greater sense of brand unity and halo across the business.  All of the Coke variants will now all display the signature Red Disc, although the different variants will still feature a splash of their own unique colors: black for Coke Zero, silver for Coca-Cola Light/Diet Coke and green for Coca-Cola Life.  Marcos de Quinto, Coca-Cola CMO explained this decision by saying "Packaging is our most visible and valuable asset, . . .The Coca-Cola Red Disc has become a signature element of the brand, synonymous with great taste, uplift and refreshment. By applying it to our packaging in such a bold way, we are taking the next step towards full adoption of the 'One Brand' strategy, uniting the Coca-Cola family under one visual identity and making it even easier for consumers to choose their Coca-Cola with or without calories, with or without caffeine."  Although the company admitted it is still working to determine the exact packaging execution of this vision in the US where Diet Coke has a large market share and utilizes "Coke" on its packaging vs. the other variants, which use the more formal "Coca-Cola".

My take on this brand strategy approach is simple - it's a mistake and will likely fail.

The objective of this strategy is to clearly drive greater scale, which from a marketing standpoint traditionally means driving greater efficiency in advertising spending (e.g., getting a bigger bang for your buck because any advertisement should now drive sales across the broader brand portfolio vs. just one Coke variant like the historic marketing was targeted).  Accepting this premise would obviously seem very financially attractive as it would allow Coke to reduce its overall marketing budget because it no longer needs to run four independent advertisements to support the four different variants, it can now look to drive all four behind one advertisement.  However, I would argue that any shorter-term cost savings will be more than offset by longer-term revenue declines because the effectiveness of the 'one brand' advertisement will likely be lower than Coke's historic variant focused approach.  This is the case because to make this strategy work, Coke effectively needs to dilute its messaging to the least common denominator that halos across all four variants.  What made Diet Coke and Coke Zero so powerful is they each spoke to two very different target consumers than original Coke and I worry that one advertising campaign will soften the brand's ability to both target and resonate as deeply with each individual target, instead opting for being a bit of everything for everybody.

From a packaging standpoint, the company is also clearly trying to make a scale play by increasing the visual brand block at shelf with a sea of red.  This in theory should grab more consumer attention in store.  Additionally, for a design purist standpoint, the simplicity of the new brand architecture is far more beautiful than the current disaggregated design.  However, sometimes the uglier solution is the more effective solution from a consumer standpoint.  What consumer has ever complained they cannot find Coke on the shelf?  I have real worries that the new packaging will lead to significant confusion at the shelf and in some cases will lead to the consumer either walking away empty handed or with the wrong item.  Simply put the packaging is just too similar across variants to allow the consumer to quickly find their variant of choice - especially in a category dominated by a grab and go mentality.  Additionally, from an on-pack communication standpoint, the variant name is in the wrong location on the can and bottle.  It should be below the brand name where consumers eyes are trained to expect it, as opposed to up top.  The location on the top of the label is likely to be missed by many consumers based on the fact that the packaging pulls their eye directly to the brand logo and consumers are trained to read down, and not glance back up.  Finally, I'd argue consumers have a strong affinity for the can color of their personal favorite variant.  In many ways, what can color can you prefer has come to express something about your personality to yourself and others in our society - not necessarily good or bad - but something about who you are.  I'm a black can (Coke Zero) guy.  I don't think consumers will ever articulate this, but I expect the black can people and the silver can  (Diet Coke) people to have some hesitations about picking up a new red disc can.  I think they'll miss how their old can helped expression a very small piece of their personality.  In this way, Coke will be a victim of its own historic success.

Mr. Clean Re-Stage

As a Mr. Clean marketing alum have to say I love the new re-stage of the Mr. Clean brand.  It does a great job of starting to form a more emotional connection and bringing to life the product benefits in a way no other clean brand can...

"I take down arm wrestling opponents like I take down grime, stains and dirt. Things got pretty intense with these bikers, but we're all friends now" -Mr. Clean

Great job Mr. Clean Team!  

On a side note, I'm also glad to see the the Magic Eraser Handy-Grip is finally being launched, something that was suppose to happen 5 years ago, but that's a longer story... 

JCP, I mean jcpenney

After months of significant sales declines under the leadership of Ron Johnson, Mike Ullman is back in the CEO chair at jcpenney.  Ullman now has the tall task of steering the retailer back to growth.

While most of the attention surrounding Ron Johnson's downfall has been linked to his botched attempt to move from a high-low pricing strategy to every day low pricing, another critical factor that led to the struggles was Johnson's push to try to win with a younger, more fashion forward consumer that jcpenney traditionally never had much traction with. The push included discontinuing several of the retailer's own brands and revamping the marketing strategy to appear more cutting edge, by featuring young, slim models sporting fashion forward outfits. However, this move alienated some of jcp's loyal consumers, leaving many for them feeling that jcpenney was no longer a retailer for them.

While Ullman has only been back for a brief period, there's no doubt he recognizes this mis-step is actively working to win them back. He's moving quickly to turn around the ship, for example in the matter of 2 months he's apologize, brought back old brands, invited consumers back, thanked consumers for returning, and launched a new home goods department. It's ambitious, but the tone and approach for the most part has been right on target:

1. He apologized to his consumers in a campaign called "Yours Truly" where the voiceover read:"It's no secret, recently jcpenney changed. Some changes you liked and some you didn't, but what matters from mistakes is what we learn. We learned a very simple thing, to listen to you. To hear what you need, to make your life more beautiful. Come back to jcpenney, we heard you. Now, we'd love to see you"                                                                                                      
2. He's brought back St John's Bay, a private label brand brought that use to account for over a billion dollars in annual sales. "We heard you. St. John's Bay is back! What will you snag first, pants or shirts?" the brand posted on Facebook
3. He ran an advertisement reminding consumers of jcp's brands and inviting consumers back.  Listen to the end of this ad "So come back to jcpenney and save on his favorite brands. We'd love to see you"                                                                                                                                     
4. He also ran an ad educating that jcp recognizes they screwed up, but has corrected itself and thanks consumers for returning (potentially a little bit premature)                                                                                      
5. While he's moving forward with many elements of Ron Johnon's home goods department makeover, the execution is done in a way that is homy and connects authentically                  

However, a lot more work remains and there will no doubt be some awkward moments during the pivot back to the brand roots.  For example, I just received jcpenney's father's day catalog and there are several inconsistencies that make it appear as if the cover was just slapped on at the last moment, including:

1. The logo on the front is "jcpenney", where as everywhere else Ron Johnson's "jcp" in a box logo still appears
2. The cover says "It's all about you, dad", however many of the models in the catalog (including the ones on the first page) look like they are maybe 20 years old and are wearing styles that are all very slim cut and too fashion forward to be for most of the fathers I know
3. While Ullman has moved quickly to restore sales and discounts, the catalog takes that to the extreme. Every page is tattooed with several value message, from a $10 off coupon, sale prices highlighted in red vs. original prices, % off claims, buy one get one offers, and value pledges. The result is an overwhelming barrage of promotions that looks like a design agency translated a marketing brief too literally

It's an awkward execution and highlights the challenges brands face as they try to jump from one strategy to another quickly. While there is no doubt that Ullman has to move quickly, the brand is stuck in a transition period that is blurry will likely continue to confuse the consumer until jcpenney has the time to get its feet under itself and resources aligned to return to a consistent brand position and execution. 

Rating Pepsi's New Bottle Design

Pepsi recently announced plans to launch new bottle shape for the first time in 16 years, with the new bottle starting to ship as early as next month.

The bottles will feature a swirled grip on the bottom portion of the bottle, a shorter label edged in a "cola-colored" border, as well as, a larger version of the brand logo. A spokesperson for Pepsi explains some added features of the design and how they fit with the equity: "It's not uniform, it's a little asymmetrical, there's a little edginess and playfulness, which is consistent with Pepsi's equities and youthful spirit."

Take a look...

I'm a fan of the new bottle for three reasons:

• The new bottle is more unique.  It's takes on a distinctly more masculine shape (e.g., broad shoulders, narrower waist) than the old bottle, which is also a sharper contrast to Coca-Cola's more classical feminine "contour-design" or "hobble skirt" bottle shape

• The new bottle design, higher label placement, larger logo, location of brand name do a much better job drawing your eye to the logo and brand name, quickening/improving brand recognition and brand building

• There's no doubt this new bottle design offers significant cost savings for Pepsi and lowers the environmental footprint. Part of this comes from the smaller label size and smaller cap size, but I also suspect the new bottle design requires less plastic as well - I just hope the structural integrity of the bottle is stronger than most environmentally-friendly plastic water bottles.

Do I think the new bottle will ever challenge to be on par with the classic, iconic Coke bottle?  No, definitely not.  But it does appear to be a solid effort to modernize the Pepsi bottle, while reducing costs and the environmental footprint.

Coke's 'Coming Together' Obesity TV Ad

Coca-Cola just launched a new tv campaign entitled 'Coming Together' that seeks to address concerns about soda's role in the nation's obesity problem.  The campaign is supported by a 2 minute tv ad...



It's an interesting advertisement in that it pushes consumers to consider better for solutions versus full calorie sodas without fully condemning Coca-Cola, and in fact praises how proactive the company has been about delivering better for you alternatives.  It's done in a smart way as to be honest about the connection of full calorie soda consumption with weight gain, but also actual has an strong underline sales message about many other products in Coke's product portfolio such as Dasani, Vitamin Water, Coke Zero, Diet Coke, and juices.  In reality, the tv commercial is not really an admission of fault, but rather a scale advertisement for all of Coke's better for you products. 

Is it dishonest to be selling products while trying to look like their doing the right thing?  No, I think its a smart business approach.  Granted, I think health nuts (and many non-health nuts) would argue that the artificial sweeteners in many of their no or low calorie beverages are actually worse for you than the full calorie alternatives.

Chevy no longer 'Runs Deep', but will 'Find New Roads'. At least for the time being...

Chevy recently announced that it was replacing its tag-line "Chevy Runs Deep" with the new tag-line "Find New Roads".

"Chevy Runs Deep"was launched in 2010 and only lasted a few years.  Though switching tag-lines is nothing new for the General Motor's brand.  Past tag-lines include "See the USA in Your Chevrolet," "Heartbeat of America,", and "An American Revolution".  The question is will this new tag-line have more sticking power?  

My guess is no.  My guess is Chevy will be searching for a new tag-line in another few years and they could have better spent the few million dollars they invested on this re-launch effort on something else that better built the brand. 

It's not that I don't like the tag-line from a creative standpoint.  And, I'm confident all the consumer research GM surely did prior to rolling out the new tag-line showed positive consumer sentiment.  After all, "Find New Roads" is very likable.  Its optimistic and it points towards the future not the past.  It grabs hold of the current America sentiment for wanting something new, something better.  The problem is that being popular with consumers in testing, doesn't necessarily make it a successful tag-line.

So what makes a successful tag-line?  There are four elements that have to be true:

1. It has to be unique
2. It has to be ownable (by connecting to the brand heritage or underlining equity)
3. It has to brings to life a consumer benefit (ideally a high order benefit than just the product performance)
4. It has to have the potential to tug at the consumer heartstrings or make an emotional connection

To me the biggest problem with the new Chevy tag-line is it doesn't resonate as an unique, ownable benefit that only Chevy can deliver on.  What about find new roads distinctly connects with the Chevy brand?  For me, the line fails to connect with the brand heritage and brand equity.  While it is clever, I struggle with the brand linkage to Chevy and that makes the tag-line feel empty and somewhat soulless to me.  

Aspirational for sure. A great internal compass to guide the future development.  Just not a great fit from a consumer branding standpoint.

     

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.

"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.

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

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.

Gap, heading down the wrong road?

Gap's struggles over the the last few years are no secret. In 2010, the Gap division has a total revenue of $5.8 billion, well below its pre-recession revenue peak of $6.2 billion in 2007. Unfortunately, 2011 isn't looking too much brighter for the Gap division, as North American stores report a same-store sales decline of (9%) versus year ago, while many of its competitors reported stronger than expected sales. These declines are despite the fact that Gap Inc. reportedly spent $70.5 million to advertise the Gap brand over the past year, according to the Kantar Media unit of WPP.

Given these troubles, its not a surprise that Gap management has been trying to shake things up in order to reignite growth. First, Gap tried refreshing its brand image by altering its longstanding logo - this effort turned into a public relations fiasco by causing a significant consumer uproar. Within what seemed like a matter of hours, Gap reversed course and restored its old logo, but not before proving just how out of touch the fashion giant is with its core consumers.

Now Gap is back at it again, trying to put a brand-aid on its sales challenge. Gap announced last week it would refreshen its image as the "People's Brand"

http://www.nytimes.com/2011/04/08/business/media/08adco.html?_r=1

The effort is being led by Gap's new chief global marketing officer, Seth Farbman, a former advertising executive from Ogilvy & Mather Worldwide. Farbman describes the “a people’s brand” positioning as a focus on fun, optimism and value for money.

Hmmm...does this positioning raise red flags to anybody? Thinking about this positioning from both a consumer and marketers perspective "Fun, optimism and value" sounds like the company may be confusion its Gap brand with its Old Navy brand. Doesn't Old Navy owns fun and value (at least in the mind of this consumer)?

So, why is Gap treading on its own tracks? Farbman claims “This is not a five-year turnaround strategy . . . This is a right-now.” Farbman is correct in that Gap needs to “set a clear point of view for the brand”, which it has clearly lost over the past few years; but Gap is losing sight of the bigger picture by not thinking about the longterm equity of both Gap and Old Navy.

I would venture to say Gap has struggled in its consumer positioning for a few reasons. First, Gap over-expanded its brand, which has caused it to lose some of its specialness. Second, as Gap Inc.'s other brands Old Navy (position: fun and value) and Banana Republic (position: sophistication and style), have effectively sandwiched the positioning of the Gap brand in the middle making it harder to find a unique space to own.

To get back to a position of growth, Gap needs to get back too its roots and focus on the basics.  Instead of trying to chase what it is not, Gap should embrace what it is - America's brand.  What made Gap so iconic in the first place.  The positioning should be optimistic and patriotic, with a focus on selling a modern take on the classical American lifestyle (bring on the swing dancing and all) - in summary a middle class version of Ralph Lauren.