Monday, July 29, 2013

My Benevolent Bank

I got this email from my bank today.  My bank offered to give me $125, only if gave them $10,000.

Do the math and that equals a return of 1.25 percent on a $10,000 investment.  And with a .01% annual percentage yield, my final return doesn't figure to be much more than that (a grand total of $135 after 12 months).  
For a Chase Savings account, the Annual Percentage Yield (APY) for all balances is effective as of 06/07/13 and may change at Chase's discretion. The APY is 0.01% for all balances in all states. Interest rates are variable and subject to change. Additionally, fees may reduce earnings on the account.
The headline of the email read "Don't Miss Out!"  But I opened it and learned that the only thing I'm missing out on is my own robbery.  JP Morgan Chase is worth $211 billion; they're smart enough to know that a savings account isn't the best place for my money right now.

I just wish they would share where that place actually is.

Saturday, July 27, 2013

'King' of the World

Almost a year ago, I wrote that Budweiser had a positioning problem.  After the sale of Anheuser-Busch to Belgium-based InBev in 2008, their ability to effectively position the brand as the all-American brew was severely weakened.  Furthermore, in a category where being one of the "little guys" is a highly-admired brand trait, the size of Anheuser-Busch was becoming as much a weakness as it was strength.

I recommended Budweiser turn that weakness into a strength by marketing itself as the world's first global beer brand. Doing so would create a distinction that would once again reposition the brand as a leader and thus appeal to consumers in a new way.

Interestingly, according to a recent article by Mike Esterl for the Wall Street Journal, this appears to be the strategy that Budweiser is taking.  The company has set its sights on using its size and widespread brand recognition to its advantage, as Budweiser mimics the strategy that transformed American icon Cola-Cola into a brand that's now revered across the globe. 

Thursday, July 25, 2013

Amazon's Murky Brand Position

Buying a $33,000 Rolex online seems like a bit of a stretch in general, but it's completely unbelievable when "online" means  The selling of a Rolex at "Sears" (it's really third-party retailers looking for a platform) is as out of character as the innuendo-laced items that Gawker discovered on the site last year.

But if Sears truly believes that the future of retailing looks something like Amazon, they should take a look at Amazon's latest earnings.  Although for Sears, who recently loss $2.4 billion in a four month span, taking only a small loss might be to die for- it's still not a profit.

Amazon gets a ton of credit, and rightfully so, for being innovators.  Yet, its earnings rarely reflect those significant investments in innovation.  Therefore, I cannot help but wonder if, similar to Sears, that its lack of brand positioning, or basically it's position as a retailer that sells everything under the sun, isn't being overlooked as the a principle cause of their consistently low earnings.

As always, thanks for reading and for sharing.  Please feel free to share your comments below.            

Saturday, July 20, 2013

Shock Journalism

The now infamous pretty-boy selfie that Dzhokhar Tsarnaev, the young man accused of being behind April's Boston Marathon bombings, once took, made its way onto the cover of the most recent issue of Rolling Stone magazine this week.  The relaxed portrait is an ugly characterization for a terrorist and murderer; frankly, we prefer our hate-filled terrorists to look like monsters instead of models. 

The Rolling Stone obviously picked this photo to illustrate its story that something about this kid's life doesn't add up; Dzhokhar doesn't fit the typical profile of a terrorist.  He was just a "normal" American teenager.  But the other side of that same coin is that their cover doesn't add up either; the cover photo is telling the happiest part of a story with an incredibly sad and tragic ending.  The photo, as a perfectly clean image (unlike the Charles Manson cover to which it's being compared and justified against), feels a bit like glorification.

I don't think actually intended to glorify a terrorist as much as they wanted to tell a compelling story.  But compelling stories doesn't have to be sold; they merely have to be told.  

UPDATE:  Not surprising, in the end, the magazine benefits from the hype they created.  

Monday, July 15, 2013

Samsung's Crusade For The Holy Grail of Data

The moment I heard the news that Samsung would be giving away one million downloads of Jay-Z's latest album, Magna Carta Holy Grail, five days before it could be purchased in stores, I could practically hear its marketers plotting.  The plot was officially on when they said the magic word- app.

In general, apps are not built with your privacy in mind, as they're data goldmines for the marketers who are into that sort of thing. Samsung's something-for-nothing Magna Carta app would obviously be too good to be true; Magna Carta Holy Grail would really be Samsung's holy grail of consumer information.

Not only did this app give Samsung all the typical access they normally would receive when consumers downloaded an app, such as permission to read the phone’s identity, the e-mail addresses and social-media user names connected to the phone, but it also demanded permission to post on Facebook and Twitter accounts.  Thus, consumers were forced to spam their social networks with posts about the album and the supposedly benevolent smartphone company that was hooking them up.  

However, it turned out that dangling Jay-Z wasn't enough to mesmerize music fans into loving Samsung.  People actually read the terms and said no thanks. Samsung's limelight quickly soured into an embarrassingly desperate marketing ploy.

Ironically, as Samsung's Magna Carta ploy unraveled, they announced the company missed sales estimates due to "Galaxy fatigue." In other words, its marketing is quitting on them; consumers are less responsive despite increasing their 2012 expenditure by 58 percent to over $4.3 billion globally.
Interestingly, extremely popular music festivals Bonnaroo and Cochella, are taking a completely different approach, balking at major sponsors and a large revenues because they believe brands in this space would detract from the overall fan experience.  As Matt Frampton of Pitchfork Media put it, marketers lacking authenticity can become that "embarrassing uncle trying to fit into a world where he doesn't belong."

This July, uncle Samsung definitely crashed the party.

Wednesday, July 10, 2013

Sizing Up The New Hostess

While it may be scientifically impossible for a Twinkie to actually go stale, among consumers, they absolutely have.  Consequently, this led to Hostess' second Chapter 11 bankruptcy in December and subsequent liquidation earlier this year.    

This Monday, the Twinkie makes its triumphant return to stores under the ownership of Metropoulos & Co. and Apollo Global Management.  The private-equity firms paid $410 million for the right to resurrect iconic brands like Twinkies, CupCakes, Ho Hos, Ding Dongs, Zingers, Suzy Qs and Sno Balls.

Although the new owners have the distinct advantage of being freed up from $1.3 billion of debt and the highly restrictive union contracts of previous owners, it's vital to consider the health of the baked goods category that they'll be entering.  Debt and unions weren't the only culprits in its past failures.   

The consumer trend toward healthier eating has been a giant hurdle for the marketer's of baked goods.  But some bakeries are booming.  Under the current market conditions, the growth of the baked goods category is coming from more decadent, premium-priced treats; not the mass market that Twinkies, Ho Hos and Ding Dongs serve.

I suspect that the Hostess' owners know this.  When asked about innovating with healthier ingredients like whole grains and sugar substitutes, Hostess' new owner C. Dean Metropoulos confirmed "those are the categories we're exploring." 

However, I have my doubts that his private-equity firm is developing new brands, which they will need for the healthier snack category, because in that arena, wide-spread distribution and an 83-year-old brand like Twinkie is actually less of an asset and more of a liability.

As always, thanks for reading and for sharing.  

Thursday, July 4, 2013

Swimming With Sharks

The screenshot above is the homepage of the Democrat and Chronicle, a Gannett owned newspaper in Rochester, New York.  At that moment, the site was running two rather distasteful, fear-mongering advertisements, that read "5 Signs You'll Get Cancer" and "5 Things That Start Cancer in Your Body."  The ads were obviously paid for by some anonymous scam artist with whom the newspaper never dealt with directly.
However, it's not enough for the newspaper to claim that these ads are farmed out and that they're not involved. 

If crap like this appears on your webpage, then it will ultimately reflect upon your organization.  Easy money is easy for a reason.  Hopefully your real estate and your reputation is too valuable for it.

Tuesday, July 2, 2013

No Turning Back

I recently agreed to "rent" a parking space in downtown Cincinnati.  Compared to other surrounding lots and garages, the price was great - only $45 per month in addition to the slight inconvenience of walking an extra city block twice a day.

However, my excitement about this deal was quickly dampened when I learned about the $15 activation fee after signing up and filling out all the forms.  Sure, a single fee of $15 is not going to be a deal breaker for most people; but every customer hates discovering fees when they're halfway to the finish line.  Worse yet, the element of surprise only helps customers remember the wrong thing about their experience.

 Conversely, a willingness to be straightforward about the bad stuff can  greatly help to build a consumer's trust in the brand.

As always, thank you for reading and sharing your thoughts.