Building a Brand in Specialty Retail Channels

If you love gourmet food, you should visit the Fancy Food Show, at least once, put on by the National Association of the Specialty Food Trade (NASFT). This is a trade show for specialty food retailers and distributors where manufacturers and importers display (and sample!!) the most delightful, exotic gourmet food treats. This summer’s show was held at the Washington DC convention center and my first experience walking the floor, tasting the samples and speaking to small business owners. It was highly enjoyable, but overwhelming, with over 2,400 exhibitors showing over 180,000 products. Cuts of exotic meats and every imaginable type of gourmet cheese, chocolate, yogurts, and pastas are on display in one giant gastronomical extravaganza. The three hot food trends I observed at the show were 1) Regionally authentic, 2) Ethnic, and 3) natural/organic/gluten free.

The Innovation Brand Needs a Makeover

 

in·no·va·tion

noun \ˌi-nə-ˈvā-shən\

1: the introduction of something new

2: a new idea, method, or device

Merriam-Webster dictionary

Innovation is a powerful word - a label for the stream of activity as well as the new things that organizations create.   CEOs increasingly cite innovation as their top priority. It has become the organizational imperative, with the power to revive a company, a category, and create the future. 

What If the term “Innovation” were a brand?  Would it be a strong brand, a profitable brand?   Viewing “innovation” as a brand helps to clarify some issues caused by the overuse and misapplication of the term.  

Should You Change Your Company Name?

I was asked at a branding conference whether it is advisable to change the name of a business when it no longer seems to convey a strong, compelling meaning to the target consumer.

While this seems like an odd question, marketers like to rename things. Brand names are names – that is all.  The power of a brand is in the relationship,the associated meanings attached to the name -- not the name itself.  Changing a name erases all associations in an instant.  In 90% of cases, therefore, the answer to the subject question is no.

Would you rename your dog after a few years because she no longer had a contemporary name that conveys a benefit?  I am warmly reminded of my old family pet lab, Speed, aptly named when he was a pup.  When he was 12, and rested in the yard of every third home, we laughed about his name, but he was still ‘Speed’. 

However, it might be appropriate to consider changing a brand or company name when:

Social Media – The 5 Questions to Ask Before Jumping In

 

Social media’s development as a marketing tool for business has fundamentally changed the way businesses communicate with their consumers and customers. The pace of this change and the choices of tools and measurements are surprising most marketers. 

Most businesses have jumped into social media to some extent with very mixed results. The challenge they find is that building communities and fostering open dialogue takes a major commitment of time with few visible results. While it is much less expensive (in many cases free) for a business to post online, it can be a waste of time if not considered correctly.

Before beginning any social media marketing, it is important to answer the following five questions:

Coke Teaches Another Packaging Lesson - Switches Back to Red Can

Coke is switching its 2011 white holiday promotion can back to red to eliminate consumer confusion. According to an article in the Wall Street Journal, the new “white” coke was rolled out for a holiday promotion but looked confusingly similar to Diet Coke. The promotional can, honoring polar bears (shown walking in the snow), was to end in February but Coke is now saying it will be shipping red cans with polar bears by Christmas and that was the plan all along.

Consumers were confused and complained. They believed the product tasted different than original Coca-Cola and many were a bit offended that the color was changed. Coke executives believed that the scripted coca-cola logo would not be confusing since it was that of the base brand, not the diet version.

There are two interesting packaging lessons:

1. Brand logos are not as important as the total color scheme. A brand tends to regard its logo as a standalone item and the background to be of lesser importance. However, logos and words are always far less important than color and designs. Humans recognize and remember shapes and colors far more than words.
2. Packaging color and design is such a strong indicator of a product that changing it can actually change taste perception. Many consumers complained that the formula had changed and some even thought that coke and diet coke were being mixed together. Packaging therefore affects taste buds.

Coke’s promotion to help bring attention to polar bears was a great idea, and the retailers thought the white can was innovative and exciting. It’s a hard but valuable lesson in the risk of changing packaging.

CMOs Feel Overwhelmed by Change – IBM Study

Top Marketers around the world see huge changes taking place in how marketing will be  conducted into the future and feel ill prepared to handle the changes.

A recent IBM Research Study spoke to over 1700 Chief Marketing Officers (CMO) in 64 countries.  The study concluded that CMOs see four clear challenges today:  the growth in the amount of data available at their fingertips, the growth of social media, the number of channel and devices and the shifting demographics of the consumer base.  Combined, these changes will cause a great deal of disruption over the next 3 – 5 years, forcing an evolution in the role of marketing.

Another important conclusion was that chief marketers believe that return on spending - ROI – will become even more relied upon as the benchmark measure of investment success but struggle with how to effectively measure marketing results given the overwhelming amount of data that is now available. 
  
Are Marketers Still In Touch With Consumers?

Good marketers have always understood intuitively how media is consumed because they themselves had a heightened awareness and naturally critical eye to the marketing around them.  Marketers are always ready with an insightful comment on the latest Super bowl ads, fashion trend, sports, celebrity and news sources.  That has essentially changed. Now, the report states that while 82% of CMOs see major shifts in marketing budgets moving to social and digital, only 26% of CMOs track blogs themselves.  While keenly aware of this new media, they have little time to “surf the web” and essentially be the new consumer. 


The Future of Marketing

The future of marketing will involve analysis of granular data which will likely require more software, and analytic skills.  We are approaching a point where each consumer’s click on a mouse is tracked and reported in real time.  One outcome will be an explosion in the need for programming, software and data analysis.  This is certainly a key reason IBM conducted this study.  The insights that this data can bring if properly measured will feed unique brand propositions and communications.  Marketing analytics may need a separate stream and structure within marketing.  This new analytics group must somehow capture and synthesize the billions of bits of data and provide meaningful insights.  CMOs will need to establish the right organizational approach in this unfamiliar new world so that powerful brands can continue to be built.

How to Build Strong Brand Communication

“If I only had an hour to chop down a tree, I would spend the first 45 minutes sharpening my axe.” – Abraham Lincoln

For many small to mid sized businesses, brand building has become overly focused on tactical communication through social and digital media. The message is obvious – we are here and we are great, the target is everyone that has a computer and the product will sell itself once people know it exists. Since there is a low cost to accessing online PR and media, it is easy on the budget and is tempting to jump in without doing homework. Many businesses look at marketing strategy this way. While social and digital media are very exciting developments, it is critical not to confuse the work needed to find the media from the more important work needed to construct an effective message and build a brand.

There are 5 things any brand must do in order to create strong communication

1. Know the target – what specific group are you looking to introduce to your product. What are their needs and hang-ups with other products in your category What motivates them? Don’t just observe where they live, age, income and behaviors (demographics), but more importantly find out what they believe in regarding the important benefits your category provides (psychographics). Paint a vivid picture of the exact type of person that will most likely need your product or service. It is then a much easier later to determine the marketing and what media you might choose to reach them.

2. Define the product or service’s unique selling proposition (USP). What specific tangible and or emotional benefits does the product bring to the specific target group that the competition cannot (or does not) claim. Uniqueness can be a functional attribute, a value proposition, a marketing idea (advertising character, jingle, etc). An emotional benefit based on the functional attributes is usually the strongest approach.

3. Determine the brand’s marketing goal – a marketing goal is measured on terms of impact to a target. Examples of deliverables – build awareness among 5,000 physicians in the New York metro area. Gain product trial of 10% of the target market of San Francisco music lovers. Metrics such as “create 5,000 Facebook followers” or “sponsor the catwalk at the NY fashion show” are examples of tactics and not goals.

4. Look for strategies that deliver only your goals. This is where marketers tend to make obvious mistakes. Fun and interesting programs are sometimes huge money wasters that don’t work. Look for effective nuts and bolts programs first. They tend to work, which is why they are used. I’ve seen cases where new brands, needing to build basic brand awareness, spend energy around a celebrity endorsement event. This rarely gains basic awareness of products or services. Post event measurement of success against your goals can help confirm this, but by then it is too late.

5. Build an original plan. Don’t “borrow” a marketing idea. The lure of an interesting campaign idea or promotion execution by a big entertainment property, or soft drink, or internet company, may look like your next “must do” marketing event. But a borrowed strategy or program makes no sense since that other company has entirely different goals. What works wonderfully for one brand can be a huge flop for your unique business situation.

Larger organizations tend to spend much more energy on these building-block activities than they do on the tactical idea execution which is often outsourced to agency partners. They learned over time - due to the enormous costs of traditional TV advertising – that the risk of product failure based on poor communication was enormously expensive. Now that some online communications seem comparatively cheap, companies cannot forget that the brand target, the brand proposition and the message are far more important than the communication vehicle for product success.

Consumer Needs – Functional or Emotional?

Consumers (and customers) have needs that marketers and businesses seek to satisfy.    For consumer goods, the needs are often good quality (product performance) at a decent price. In business services, customers need on-time delivery, low price, and quality of service.  Each of your brand’s attributes are weighed by how well they fit a set of needs.  Sounds simple, right?

Well, maybe not quite so simple.  Consumers and customers have both functional needs and emotional needs.  Functional needs can be clearly articulated and while strong drivers of consumer choice, they are generic, and hard to own by a brand.  While a customer might demand a low price because that fills a rational and functional need, the stronger emotional need may be “keeping my job by not allowing my division to go over its budget” and can be satisfied in many different ways.  “Organic” label on food products is a functional benefit  for some moms when shopping, while “keeping my family safe from harm” is an emotional need. 

Delivering only functional category benefits makes it harder to build a lasting connection and survive in any competitive category.  A cereal that “tastes great” will be unique only until the next great tasting cereal arrives.  Walmart has the lowest prices……until the dollar store opens up down the street.   Your company has the best on-time delivery..…until your truck broke down last month.  

Satisfying emotional needs – safety, security, acceptance, and love – builds a stronger brand and stronger customer relationship.   You find these needs buried beneath the logical, rational and top of mind lists people carry in their heads.  Consumers don’t talk about their emotional needs, especially to strangers, or vendors, or often focus group moderators.  They want to appear logical and rational.  You have to get close enough to your customer to get to know them on a deeper level. 

Once the functional needs of your customer are satisfied (and they must be satisfied first), then satisfying emotional needs is the path to building a lasting relationship.

Premium Branding Strategy Can Win in the Mass Market

Downward pricing pressure from recession-weary consumers and the retail trade is increasingly forcing manufacturers of brands to fight a battle of competitive pricing.  Mass merchandisers, dollar stores and discounters are, themselves, fighting a battle to capture a larger share of the consumer pocketbook from traditional food stores, and mid-tier department stores.  Private label quality is up and providing additional competitive pressure to brands while delivering healthy margins to the trade.  Brands that chose to adapt slowly to these pricing changes risk severe loss of distribution in mass channels.  Welcome to the new world of brand marketing. 

Brand management was designed during a time in which the population of baby boomers was fueling growth across most channels and companies were building an approach to organize their efforts around the concept of the “brand” rather than the “product line”.  Brand management and marketing departments adapted well to this evolution and put many tools in place to better understand consumer demographics, usage trends and psychological underpinnings of brand purchase and loyalty.  However, we certainly are in a new marketing age due to the recession and acceleration of downward pricing pressure, leaving many a marketing manager living in a surreal world where brand loyalty measures fall, discounting grows and profits for the retailer and manufacturer suffer.

However, there are still a few arrows left in the brand marketer’s quiver.  Consumer insight, correctly applied, can lead to a win-win profit proposition.  Lets look at one such interesting insight – namely, the very shopper that shops bargain prices for school supplies, candy, and vacuum bags at Walmart, is same person that buys an expensive espresso maker, a pair of Bostonian shoes, a hybrid car, micro brew beer, and an expensive 1960s electric guitar (oh wait, that’s me). In other words, paying top dollar for what they care about.  Brands they are passionate about.  A step up in those categories, bottom dollar for the rest.  

So what about those categories that are not quite so sexy.  Household products, dinner entrees, tooth paste, you know, everyday stuff.  Same idea.  Consumers pay a premium for that indispensible product that has the next generation must-have innovation or the premium positioning (Did you know Tag Hauer, the luxury watch maker, is coming out with a cell phone that retails for several thousand dollars?).  Crackers and chips are everyday, but when friends are over, only that imported wafer will do, for some.  Pay $1 more; no problem.  How can that be? We are in a recession.  True, but not for the things we love or reflect our tastes and passions.  We make up for our little indulgences by doing with less of that of which we are not passionate.  You can see the obvious issue for the brand that elicits no passion.   

There is a place in almost every category for the mass premium.  Take the classic case of pasta sauce, being battled out by Ragu and Prego for years, until Four Brothers, Barilla, etc. created another tier.  Now examples are everywhere.  Cheese at the store - plain and imported; coffee – Kenya blends or plain Folgers; beer – domestic, imported, or micro brew; wine – cheap, moderate, expensive. 

The discount retailer does a service providing life’s necessities at the best price possible in these times.  Fortunately, there is still a consumer who will pay for something nicer, more exciting, and enticing.  You, as marketer, must find that niche, understand the expectations and neccesary benefits to please that true category lover, and create that next tier, the premium within the mass.  It is the place that gives your brand a profitable, fighting chance on the downward pricing spiral.

The Premium Mass Solution

A Consumer Insight

24K Marketing – What’s in a Name?

What’s in a brand name anyway?  A person, a product, a service or a company all have names.  But a name becomes a brand name when it begins to stand for something more than an identifier by offering a product or a service.  A brand name usually becomes stronger as it becomes more widely known.  When the  product delivers on its promises and creates a personal connection, the brand becomes more valuable. Once developed, brand names bring commercial value to the owner – more than the simple value of the product or service itself.

I have changed this blog’s name to 24K Marketing, at 24KMarketing.com.  The blog used to be called Rock Slate Paper at bobclarksblog.blogger.com.  Everything is re-routed automatically so the feeds should be seamless to all who read or find my blog through search.   Many thanks to my daughter Jess for the hard coding work. As a college Information Technology student, she makes complicated stuff look relatively simple. 

24K Marketing is a strategic marketing consultancy with a mission to help companies find growth in tough economic times.  I bring experience leading large and mid-sized consumer brands well over 20 years (see “about me” tab).  So the brand vision is value creation and growth – a place to turn to when a company needs new perspective or is facing new opportunities.

My blog topics will continue to be views on marketing, innovation, and insight, but will be focused more upon topics that bring useable insights for brand growth.  Let me know what you think of the new site; I hope you will follow, join in the dialogue, and help build this new name into a strong brand.  I welcome your insights.  

TiVo – A Brand Tied To a Single Technology

The stock markets are buzzing about a possible TiVo takeover.  The company, which has been an underperforming stock and losing money, won a patent infringement lawsuit settlement from Dish and EchoStar in May for $500MM.  It is also looking for another $300MM more from ATT & Verizon settlement.  Rumors are that Microsoft and Google might like to purchase the company – perhaps to integrate the technology into expanded in-home offerings.

TiVo is  a company that created a technology 10 years ago - a really cool technology – allowing  consumers to “time-shift” their live television viewing.  This “time shifting” technology was a huge game-changer for cable TV, broadcast and even the advertising industry. The brand, itself became synonymous with time shifting.

Fast forward to 2011.  TiVo has lost money in all but one year since it was introduced.  It began to license its technology and equipment to cable companies that were placing digital video recorders (DVRs) into homes around the world.  But TiVo makes very little money on every one of those licensed boxes according to its financials.  It’s stock traded at close to $60/share ten years ago and now is trading at around $10/share.   Cable companies now place generic DVR players into homes.  Cable TV itself is under pressure as consumers are beginning to watch video directly from the internet or movie subscription services such as Netflix. TiVo subscriber base has shrunk from 4 million to less than 2 million since 2007.

What TiVo did upon introduction, was great marketing and branding.  It launched a surprising and delighting technology to the consumer and branded it very well.  Its technology delivered a strong consumer benefit, allowing the consumer to consume  programming on their own terms whenever they wanted.  This benefit tapped into a consumer insight that threatened to make television less relevant in an increasingly internet-enabled world.   This benefit of programming that can be “consumed on my terms” was a much bigger benefit area in the long run than simple time-shifting TV programs.  

TiVo allowed the industry to borrow the technology and deliver it on its own.  They also allowed newer players such as Netflix and web-based video streaming to push it aside and deliver the consumer benefit in a new way.  And finally, it could not price the technology in a way that made sufficient profits. From a marketers standpoint, TiVo is a real example of tying a brand to a technology and not a consumer benefit.  TiVo could have been the next Netflix, delivered new ways to stream video, etc.  The brand was big enough and known by all consumers.  The brand began with a technology, but was ultimately bigger than the technology.

TiVo may live to complete the story.  Some needed cash, a win in court and bigger partners or owners may take it forward.  But the lesson for marketers is this: building a brand around a technology is not nearly as strong as building a brand  around a consumer benefit and using the technology as merely one of many steps of delivery against the ultimate benefit.

How Company Values Drive Brand Behavior

I am surprised by the recent news of how a great company like Johnson & Johnson has allowed their brands to be tarnished through the sloppiness of a manufacturing mess at their McNeil division. Several recalls across their consumer products have led consumers to question their once sacred trust.   It got me thinking about how a company culture can change and affect the brands that it markets. 

Values are a set of core beliefs, which inspires and sets boundaries for behavior. Most companies have a set of core values that guides the work they do. J&J , for example has a strong and recognized value statement.  Good companies regularly communicate and demonstrate their value. What people hear, see and feel everyday tend to be more important than words. Company founders go to great lengths to obsessively communicate these values as a company grows as to not lose them in the bureaucracy. Strong values are forged as the company grows, helping it defy resistance and overcome obstacles. These values are hardened by sheer habit. Great successful examples are found in Apple and Google.

Do corporate values have a rub-off affect on that company’s brands? Does company behavior affect brand behavior?  Do you trust an iPhone because it from Apple, Gmail because it is a Google product, or mistrust Benadryl because it is from Johnson & Johnson? 

The linkage from company value to brand delivery is how the brands delivers on its consumer promise. Corporate values (whether applied well or let slip) can and do drive both good and brand behavior and the resulting consumer trust and equity.

The following are examples of good and bad brand behavior as a result of a specific corporate value:

Core Company Value	Resulting Positive Brand Behavior	Resulting Negative  Brand Behavior
Growth	Innovation / Quick to Market	Quick Wins / Lack of Follow Up
Profit Driven	High Price / High Quality	High Price / Low Quality / Cost Cutting
Consumer Trust	Product Driven Surprise and Delight	Lack of Executional Excellence
Employee Focused	High Service Levels	Safe / Slow to Deliver
Sustainability	Progressive /  Eco Leadership	Minimalist / Boring / Clinical

Values have a big impact on company behavior and performance.   Trust in a brand, both positive and negative,  is certainly a result of that behavior.

Pepsi Refresh Campaign - Putting the “Social” in Social Media

Pepsi is encouraging people to take on a social project in their latest “Refresh” on-line campaign – and they will in turn post your project and even help to fund.  Fantastic idea.  A brand the size of Pepsi can make this happen.  The viral implications are great, the example for the young generation is cool, and it just might make a difference in the world. 

So what’s the problem?  Well, Pepsi is not growing.  Actually, Diet Coke took the number 2 spot away form the flagship Pepsi brand.  That hurts.

The bloggers and advertising community are buzzing.  Pepsi took their eye off of the fact that they have to sell soda first.  Too many eggs (media dollars) in one basket.  They even skipped out on Super Bowl advertising to start this viral on-line campaign (sort of makes you long for the days of Cindy Crawford sipping a Pepsi in super slow motion).  Social media is an add-on, not a replacement, to the core media message.  Doing good rocks, but it comes on top of the core.  I agree and applaud.  Case study…closed.

In my humble, expert opinion; if what you are doing does not resonate with your sales team (I assume they had a few skeptics in that group), beware. Put yourself in the shoes of that team.  Are they applauding along with your consumers?  Are you driving sales and helping the team make bonus.  Successful brands do just that.  

Social media is a valid and bold strategy, no matter what the skeptics say.  Your consumers have to love you too.  Just watch out on how you allocate the messaging. 

Hats off to a great idea.  Now, lets sell soda.

Do Brands Suffer in a Recession?

Actually, no.  Recessions rarely have a direct impact on the strength of a brand. 

A brand’s strength is measured in its ability to maintain its identity in the eye of the consumer and how uniquely it delivers on its promise.  That is different than how much product gets sold. Certainly a business can suffer from slower sales due to consumers choosing not to purchase as many things, or even to purchase only at the lowest price, but a brand is measured in its strength of persuasion and loyalty.

Brands suffer when what they stand for is lost – usually to a competitor who is doing a better job of delivering on the promise. 

Here is an example.  A recent article on the beer industry shows that Coors Light beer is vying to take the #1 spot of beer sales away from Bud Light, which has seen its share decline for a couple of years.  While the market is declining –3% per year, Coors Light is seeing sales increases.  Bud Light is a well loved brand but has become somewhat interchangeable with others and has lost some its bond with its user.  Beer are measured by their consumer as to taste and how they fit in with lifestyle and friendships.  Coors Light has turned up the innovation (labels show when they are icy cold), and continued to hammer home with strong ad campaigns.

But these gains and losses in this category have little to do with a recession. A recession may cause consumers to act differently, usually by, more closely,  watching what they buy.  But the brand that stays relevant and tied to the consumer, in the end, will win.

Social Media Marketing – How to Prepare a Plan that Keeps the Focus on Your Brand

Social media’s development as a marketing tool for business, has fundamentally changed the way businesses communicate to their consumers, customers, and within the industry.  This is not news to most executives.  But the pace of this change is surprising to many that have not truly had a close eye on this trend.  Marketing tools and media choices have always evolved, but this time the choices, and measurement are totally new ground to even the most seasoned marketing teams. 

Social sites grew up catering to the mobile phone carrying younger generation.  This “generational” gap soon closed and services such as Facebook, blogs, Twitter, etc. are now mainstream.  But the social sites were not initially designed for business the way early television and radio broadcasting came about – those media,  hugely supported by a sponsored programming model. 

We are in new territory, with new capabilities, technologies and rules for engagement.  Many manufacturers and services are struggling with this development.  They do not have the technological know how, nor the consumer communication strategies to take advantage of this “open dialogue” , originally intended to occur amongst friends.

Utilizing this medium to simply take advantage of this new world is not always a good strategy. Building communities and fostering open dialogue, which is what social media is all about, takes a major commitment of time and messaging. While it is much less expensive to get into the discussions (in many cases free), it can end up adding very little to a brand activation program.  And quite honestly, the paid advertisement banner approach, while familiar, is not very engaging.

While there are thousands of experts and agencies to help you navigate the technology, for the strategic marketer, it comes down to a few simple rules.

1. What does your Brand stand for - it is important to define the vision of the brand as well as its unique selling proposition (USP) that will define all communication.  
2. What is your Consumer insight – important to understand the consumer insight that helps shape the need of the consumer and how your brand solves this need.  
3. How does your target use Social Media – consumers are adding online and social media sites to their media consumption. Online and social media consumption is not replacing time spent with other media. Consumers are literally doing both with the rise of simultaneous viewing of TV, online and mobile technology. 
4. What role should social media play in your mix of communication – based on an analysis if the time and energy your target devotes to social media, you MAY want to consider it as a part of your mix in accomplishing your goals.  Remember, social media means participating in a two way conversation – which involves discussions and searching out kindred spirits to build community. 
5. Can you invest in building a presence – if in fact you choose to use social media, then you will need to begin to invest in the development of a community.  Lower in cost, yet much higher in terms of people commitment.  the best way to build a presence in in discussion, giveaways, tips, and discussions.
6. Try new things  Test and Learn – it is relatively easy to try new things here.  The medium is fluid and the responses are rather immediate.  therefore, it is great to see what works and improve as you go.
7. Track and Validate – Social media has different metrics than traditional media but this media is measurable.  As in any marketing plan, it is important to find the most meaningful measurements.  This is a medium that is measured in real-time so it is easy to course correct and see where the dialogue is going.

Many established companies have a profound skepticism regarding social media and its impact on sales results.  Smart marketers can champion this new media with case studies and in-market results that will keep healthy skepticism from turning negative.  As a marketer, embrace the new social media but remember that it is just another opportunity to delight your consumer target with your engagement to them as a brand.

How “Brand Vision” Leads to Brand Growth

Defining a brand vision is an often overlooked task within a company mostly because it is not well understood as to its purpose or usefulness.  Strong brands and companies, however, usually do have compelling visions.  The purpose of having a brand vision is to state clearly a direction for the brand,  allowing differentiation in the market, standing for a set of core values, and ultimately gaining a loyal consumer base and building strong market share.

What is a Vision Statement?

My simple definition -- a vision statement is a description (or snapshot) of the world, that has been changed by having your brand accomplish its goals.    In other words – once you have changed the world for your customer – what does the world look like?  That is a “vision”.  

Here is an example.  Microsoft, back in its earliest days (mid 1970s), had a vision for their company. 

"We started with a vision of a computer on every desk and in every home...

– Bill Gates
Chairman and Chief Software Architect

This was a radical statement at the time, as  computers were never in homes (they didn’t fit in terms of size or household activity).  Brilliant -- home computers would require stand alone software systems for these individual boxes (a key enabler).  See how the vision works?

I love some non-marketing examples.  Martin Luther King, Jr. famously stated, “ I have a dream - that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”  Wow – what a great snapshot of the inspiring side of vision.  John F. Kennedy said in the early 1960s that the US would have a man on the moon by the end of the decade.  While this was a bit more of an objective than a vision, its radical-ness alone made it a compelling vision. 

These statements (vision statements) were all unimaginable (at the time the were made) snapshots of the future for the the affected population (consumers), but inspired those who went to work on changing the world.  And, broadly speaking, these visions were achieved through the power of that inspiration.  Visions say nothing about how to accomplish this future state as that is not their purpose.

Why is Brand Vision Important?

A Brand, too, can have a vision and that vision can spark positive change in its direction and ability to satisfy the needs of consumers.  The point is to inspire and set the benchmark of how consumers live happier lives, have more time with their families, live on a more sustainable planet, etc. because your brand exists.   Today’s top brands have created loyalty, not only in delivering functional performance, but in ‘delighting’ consumers in their approach (2011 Brand keys Customer Loyalty Index).  A brand should clearly articulate the happiness, satisfaction or changed behavior in a world where problems have been solved by that brand having existed.  It is especially important in breakthrough ideas and new brands, but as the study also shows, mature brands can take advantage also.  

Key to Effective Vision:

1. Snapshot of a changed world
2. Simple, compelling and inspirational for the people who must work on the task
3. Has a specific date when that vision is realized
4. The brand should be inseparable and a key enabler to the realization of that vision

When a brand has a vision, the people working on it are inspired to change the world. That leads to consumers that are in love with the brand, and that leads to sustainable growth.

Private Label Here to Stay

Nielsen released a Global Private Label Report this month that states that the value conscious consumer is driving private label share up around the world in consumer packaged goods.  This is due to what is now several years of economic downturn and the resulting consumer sentiment to save money on the purchase of staple items in the store.  

Importantly, 90+ percent of shoppers report they will continue purchasing private label even after the downturn.

In many categories in the grocery store and mass merchandiser, private label is now the number two brand and retailers are getting rid all but the strongest brands and private label counterpart. In some categories, this means that only one or two brands remain. 

Private label overall share of all categories in the USA is 17%, far lower than the big markets of Europe where private label is closer to 30%.  But in Europe the retail strength and dominant share of supermarket chains such as Tesco and Carrefour allow growth of private label with greater ease.  US supermarkets shares are more fragmented across many more retailers thus lacking the market dominance to boot out national brands.  An indication as to what is to come can be found in the drug channel, where the big 3 payers (Rite Aid, Walgreens and CVS) are quickly replacing branded offerings that are not the clear market leader and replacing that shelf space with significantly improved private label.

Private labels here in the US will continue to gain more share if they are managed correctly by the retail chains and if consumer sentiment stays in their favor, which leaves number 2, 3, 4 national brands in any category in a predicament.  Instead of jockeying for share growth against the market leader, they are now fighting not to get delisted from the supermarkets altogether (and in many smaller categories they are not winning that fight).  Ultimately the number 2,3, and 4 player must have a unique offering, generate category growth, or be delisted.  The value brand strategy is no longer viable as private label moves in.   When the little guys do get delisted, private label generally picks up their share rather than the branded market leader that is priced higher.

Private Label does compete very effectively on price as well as quality.  The growth strategy of private label, after the recession, will certainly be to grow further with innovation and product upgrades. This will require new investment and infrastructure into the retailer organization.  But the watch out for the branded players is that once supermarkets have eliminated all but the lead national brand and private label, private label can then expand margins to build that infrastructure growth. 

Pepsi Max and Snoop Dogg - Great Product, but Strange Ad

Pepsi and Coke are both going after the teen market with full flavor versions of the base brand in a zero-calorie option.  To target teens, you certainly can’t talk calories and diet.  More like – you better be cool and connect.

Which makes this a cute but rather odd commercial execution.  First we start with the familiar story of our over-eager Pepsi and Coke route sales guys (you know -- the Coke guy who really likes Pepsi better…) who meet each other in the store and go for broke to win the day with their new Zero products. Each is out to outdo each other by building the best in-store display while “Anything you can do I can do better” plays in the background.  This section of the spot seems like it would be interesting only to the sales division of Pepsi and Coke.

Ok, so after all this comes the cool teen part.  Snoop Dogg comes out on top of that big Pepsi display doing his “g-thing” rappin’ with the ladies.  This big surprise is cool, but…  did you lose the teens by this point? 

Pepsi Max is diet cola aimed broadly but going for the teens – the sweet spot for Pepsi versus Coke.  I love the product concept and I love to see cool diet products for the younger generation with big powerful taste.  To connect with teens, Snoop is a great way to go. While 30 seconds of Snoop rapping may not be the best start for this ad, I am not convinced that the Pepsi and Coke route guys are the right route either. Overall, it’s fun, and Snoop shines bright in a “just OK” ad.

Should You Tweet?

A study by eMarketer concluded that Twitter advertising revenues will reach $150 million in 2011; quite impressive.  It is not as impressive as Facebook’s forecasted ad revenues of over $4 billion, but still not bad.  Advertising revenue on social media is growing fast. Many companies want to test the waters in a market of over 170 million subscribers globally. 

This begs a question.  Do you tweet?   A lot of us don’t.  Why not?  Shouldn’t we, as marketers and business professionals, be deeply absorbing new media?

I confess that I just started tweeting, and, so far, have only a few followers. I’m not yet in the groove, but I am trying.  It is somewhat disheartening to see that the “popular” tweeters I follow  have achieved rock star status with thousands of followers.

Back in 2004, I attended a conference where the keynote speaker, Rishad Tobaccalowa, challenged the group.   Rishad is the Chief Innovation Officer of Chicago-based Publicis Group Media and is a polished presenter on new media.  I was struck by a conclusion of the presentation which was a challenge to all marketers.  To paraphrase – Go out and join the conversation, sign up for Facebook, Twitter, Linked in and others so you are part of these new communities and will know how to interact. Basically, don’t sit on the sidelines watching.

Is your world of social media limited to email and texting?  OK, Facebook?  no question, its how we keep up with friends.   Blogs – maybe we read them once in a while. Linked in?  a little bit, don’t want to look unprofessional, you know. Twitter?  Who really has time for that?   You run a business, have a day job, working too many hours and never getting enough done. 

Should you be signing up for new social media platforms?  YES.   I encourage you to try every possible social media vehicle.  Some of them are easy, some hard, some interesting, some seem like time wasters, but you have to be there.  Your future customers are already there.  You don’t have the luxury of waiting on the sidelines.  Some people are starting to own the markets you believe you still own because you haven’t yet shown up.  Most importantly, your business needs technology and trend leaders, not followers. 

By the way – since this stuff is very social – Follow me!!! I would be so happy and I will try to hold up my end of the bargain with as much insight as I can muster and a simple, insightful view of the latest marketing trends.

On Twitter http://twitter.com/BobClarkMktg

On Linked In   http://www.linkedin.com/pub/bob-clark/1/a49/93a

On Facebook  http://www.facebook.com/profile.php?id=1277447300

or just sign up as a follower to my blog.  Thanks!

TASTYKAKE – the “Value” of An Iconic Brand

I grew up loving TASTYKAKE products.  They were a treat in our household and were often the high point of my lunch box.  Chocolate cupcakes were my favorite while my wife loved the Butterscotch Krimpets……yummmm. 

As many of us in the Philadelphia area know, the company has been under pressure lately. Costs of ingredients are way up, the new factory at the Philadelphia Navy Shipyard is up and running, but not yet realizing its promised savings.  And finally, a big customer, A&P and Pathmark, has declared bankruptcy. The company’s sales and gross profits are no longer high enough to cover their fixed costs.  As loans were coming due against big debt for the factory, Governor Rendell pledged $1 million of taxpayer money, over the $5.5 million obtained in private financing, to keep the company running while it explores strategic options.

The Value of a Brand

Successful iconic brands have built consumer loyalty by consistently delighting consumers.  TASTYKAKE certainly lives up to that measure.  Generations of consumers across the northeast, and especially in Philadelphia, would agree. 

A successful brand also has “value”.  That value is the intangible asset that that makes a company worth more  than tangible equipment and plants.  It allows a company to profit in a segment when the low-price competitor that has a lesser brand cannot command pricing, and profitability. Given this yardstick, TASTYKAKE might be loved and cherished in the memory of a consumer, but is not giving “value” back to its owner. 

Lets look at TASTYKAKE “Value”

These numbers from the company’s Published financial reports:

	2009	2008
Net Sales	$180.6	$173.9
Cost of Sales	$116.6	$119.2
% of Net Sales	64.6%	68.5%
Gross profit	$64.0	$54.8
GP % of Net Sales	35.4%	31.5%
Selling/overheads	$67.6	$62.2
% of Net Sales	37.4%	35.8%
Profit before tax	($3.4)	($7.5)

If you compare their 35% Gross profit to an industry “average” (I eyeballed about 5 other big food companies – remember, this is a blog) the gross profit is always north of 40% and the Selling / overheads is usually 30%) leaving 10+ points of operating income.   For TASTYKAKE bakery, its SG&A of 37% is too high and needs to come down. But the real issue is ultimately that the pricing they can command is not high enough to cover the true cost of making these wonderful products and is probably hindered by the strength of the trade and the strength of its competitors (Hostess and Entenmann’s, for example).  They really need to merge with a large company or at least pair with another midsized company to gain efficiency if they cant price higher.  Also, they need to optimize the product line for profitability.  Running a mid-sized bakery is not for the feint of heart.

This all brings home a hard truth about a brand.  Consumer love is extremely important, but should lead to creating “value” for a company.  The true measurement of strength is in translating consumer love into the ability to command sustainably strong profits and higher prices in the market.  

Philly is rooting for them.