Wednesday, January 30, 2013

JC Penney's Discounting Addiction

JC Penney continues to exemplify the danger of discounting.  It's that once a brand starts discounting, it's impossible to stop.  I originally chronicled pricing problem JC Penney was entangled in last spring and shortly after they began tip-toeing back to a discounting strategy.   

Now, without those nearly 600 sales per year, its brand is on life support.  Forced to act, JC Penney just announced, what else, more sales.

It cannot be said enough: when you live by the deal, you die by the deal.

Monday, January 28, 2013

Reconnecting With Time Warner Cable


If you live by the deal, it's likely that you will die by the same fate.  I think that's true of every industry; however, it's difficult to find an industry more addicted to the deal than television providers. 

Time Warner Cable is the second largest cable company in the country, although its television business is losing customers at an alarming rate.  In the third quarter of 2012, it surprised analysts when it lost 140,000 customers.  In the same quarter of 2011, it lost 129,000 subscribers.

As a result, Time Warner Cable recently launched a $50 million advertising campaign to reconnect with the subscribers that it lost.  The campaign is centered on Time Warner Cable's "Better Guarantee," which fits nicely into its overall "Enjoy Better" campaign.  This appeal to former subscribers acknowledges that while its service may have faltered in the past, it has made significant improvements to services like smartphone apps, on-demand programming and the length of service call windows.  Time Warner Cable is stamping their "Better Guarantee" pitch with, what else, a 30-day money back guarantee to any born-again subscriber that isn't satisfied with the improved service.

Cable companies are in real jam.  The primary problem is that they live by the deal.  Customers sign up at low introductory rates but are gradually punished for their loyalty until they get fed up and decide to take-the-bait of the next guy's introductory offer.

What if Time Warner Cable had allocated a portion of that $50 million toward client retention rather than client re-acquisition?  They could transform their marketing plan so that customer service didn't begin with a customer problem

Time Warner could contact loyal customers to offer enhanced recording capabilities when they re-up beyond the introductory offer.  And with its intimate knowledge of our show preferences, Time Warner could add and delete programming (or offer sampling) based on known customer preferences.  They could even react to very nuanced consumer behavior too.  For instance, when a customer watches a couple episodes of a new show, Time Warner could offer them the earlier episodes on-demand.  Furthermore, they could make a point of adding customers' favorite shows to their on-demand panels in anticipation of the season premieres.  Or Time Warner could launch a social marketing program by allowing customers to recommend shows to their friends with Time Warner chipping in by sharing the old episodes of that series they missed on-demand for a month or so. 

Yet, as it stands now, most customers are only in contact with Time Warner Cable when something goes awry or when it's time for them to collect the money.  They need to show customers how they're truly "enjoying better."      

Time Warner certainly has more immediate marketing problems; however, its secondary problem may be more troublesome.  Cable operators may start to consider the erosion of the category itself.  It may sound like a wild prediction, but I believe the day when television channels no longer exist is getting ever closer.    

Less than a after this was published, Time Warner breaks this unfortunate news to its Los Angeles area customers.  Make sense?  

Sunday, January 27, 2013

But With Intention

A week ago, I attended the wedding of a family member in Tulum, Mexico.  With the Caribbean Sea serving as the backdrop, their wedding was as picturesque as can be.  Not surprising since the bride and groom are photographers.

As I waited for the bride-to-be to take her first stride down the aisle, I happen to glance at the wedding program.  Printed below the names of the wedding party and the verses to be read, the couple added a poignant quote from photographer Vic Muniz.  It read: "The really magical things are the ones that happen right in front of you... A lot of the time you keep looking for beauty, but it is already there. And if you look with a bit more intention, you see it.”

While Mr. Muniz's quote is a perfect one for a couple getting married as well as a very inspiring one to photographers,  I sat there and though how it can also apply to marketers.

It's exactly that shift in focus that can disrupt industries and build entire categories.  And with a little more intention placed on your product and the consumer experience, a brand can transform itself by creating an experience that strives to delight rather than meet the status quo.

Wednesday, January 23, 2013

Mercedes Ad Stalls On Strategy

As was often the case in the past, I typically favor keeping Super Bowl ads under lock and key until the big game.  However, in this case, Mercedes-Benz might be grateful it previewed their Super Bowl ad to the public this year, because based on its reaction, they might reconsider leaving it in the garage for the biggest audience the year.  

Yet, watching it this afternoon, that should have been obvious.  The ad is many things: cliche, tacky, simple-minded, uncompelling.  Each one in and of itself would be a valid reason to have left this one on the cutting room floor.  Moreover, the best reason would be that the Kate Upton spot is so incredibly off-brand for being a Benz.

While Mercedes Benz does in fact sell cars, a desire for transportation isn't the reason to own one.  Rather, a desire of status, above all else, is the reason people opt for a Mercedes Benz.

There's nothing about this ad that appeals to a one's desire for status.  Further, it doesn't even allude to Mercedes Benz strong secondary perception of having superior performance.

For Mercedes Benz, it's simply a lemon-of-an-ad.  Unfortunately, the spotlight of the Super Bowl can have that effect on marketers who too often showcase everything but a strategy.

Tuesday, January 15, 2013

Coca-Cola's Caloric Confession


Let me start by saying that I love Coca-Cola. And I particularly love Dr. Pepper - it's by far my favorite soda.  Truth be told, I pretty much love every sugary soft drink that I've ever tasted and would probably have it everyday if I could.  But I don't.  In fact, I try like hell to avoid drinking it and only consume it when absolutely I'm treating myself.  I confess that it's my number one vice.

Sugary beverages like Coca-Cola have been made public enemy number one for several years by health advocates who have growing concerns about our nations' ever-expanding waistline.  Sadly, I am a testament to how soda appears to be losing the battle.   

However, as I've suggested in July 2010, October 2011, July 2012, November 2012 and probably on several more occasions. As I've said repeatedly, I don't believe beverage marketers are protecting their flagship brands from being perceived as unhealthy by engaging them in a conversation about health.  It's comparable to fighting fire with fire. 

That battle continued yesterday when Coca-Cola launched a new advertisement to defend itself.  But every caloric-centric marketing decision it makes unwittingly confirms the accusations against the classic taste it introduced 126 years ago rather than defends it.  An acceleration of the decline of the cola category will result.

The truth is that if a consumer is going to make a beverage choice on the criteria of health, then grabbing a Coke is poor choice.  Nevertheless, there isn't a health group on the planet that can argue against anything tasting as delicious and refreshing like a Coke can.

Appealing to our collective common sense, Coca-Cola's new ad explicitly says that "all calories count, no matter where they come from including Coca-Cola."

Our common sense should also tell us that not all calories are created equal.  The calories from a salad are better than that of a burger just as the calories from a juice are better than that of a Coke.  It's all about the nutrients packed inside those calories.  Therefore, regardless of the calorie count from your next Coke, the fact remains that they're still be unproductive calories.  Our bodies cannot really use them.

All that said, the Coca-Cola Company is very well positioned for the decline of the cola category.  It boasts numerous waters, juices, teas and other low-calorie beverages that lead their own category. 

I just wish that they weren't in such a rush for that day to arrive.

Monday, January 14, 2013

Process

Measure outcomes but really focus on the process of getting there. 

Sunday, January 13, 2013

Forgetting Frequency

Four million dollar Super Bowl ad spots get marketers buzzing about about the potential reach of an impression even though the half-life of that impression is short.  

While enamored with big numbers, many marketers neglect how vital frequency of contact is to creating a lasting impression. 

Information versus Content

Contained within the endless stream of content your brand is being told to distribute, regardless of the medium, how much real information is it actually delivering?

That information is the essence of the pitch.   And while not always buzz worthy stuff, be assured it will slowly seep in.

Wednesday, January 9, 2013

Suffering From Agonizing Slogan Swaps

If you were paying attention, then you probably noticed a change in Toyota's advertising in the new year.  In 2013, the Toyota is no longer "Moving Forward" but calling the public to say "Let's Go Places."  

According to Toyota Division general manager Bill Fay, the new position is "energetic, aspirational, inclusive, and very versatile."  He continues that its "dual meaning of physically going places and taking off on an adventure, while also expressing optimism and the promise of exciting innovation that enriches people's lives."

Although "Moving Forward" isn't an awe-inspiring position, it did reinforce Toyota's leadership position in pioneering the mainstream hybrid car market.  However, Toyota's new marketing position is kicking it in reverse with the pedal to the floor.  "Let's Go Places" doesn't have a dual meaning;  it has zero meaning.  Those three little words don't actually convey energy or aspire anyone to anything.  But they are versatile.  So versatile in fact, they could slapped on an advertisement for any other brand in the world and communicate just as much.  When developing a unique marketing position, the more versatile a slogan is, the less it will say about the product and attributes the brand is designed to represent.

Sadly, the most cringe-inducing element of these three pointless words isn't even how little they communicate but that they are the product of a collaborative effort by six marketing agencies - Saatchi & Saatchi, Dentsu America, Conill, Burrell, Intertrend and Grieco Research.  

If that wasn't sad enough, Chevrolet is right behind Toyota in replacing a position with new one that manages to say even less.  "Chevy Runs Deep," which at least suggests something about the history and America heritage of the product, is being replaced with "Find New Roads."

In an interview with AdAge, Chevrolet's Chief Marketing Officer Alan Batey explains why he believes "Find New Roads" is an upgrade.  "We know it creates a lot of meaning and is also very flexible. You can think of two vehicles, in very different spaces, perhaps a Volt and a heavy duty truck [and it applies to both]. We also think it translates into the services we provide our customers; it gives us an opportunity to surprise and delight our customers."

In reality, customers won't think of either vehicle. But, unintentionally, Batey pinpoints the biggest problem with the Chevy brand.  Everything from a tiny electric car to a massive heavy-duty pick up truck carries the Chevy name and obviously, they all have wildly different key attributes.  Therefore, it's difficult to communicate meaningfully relevant positions about each of them with a single statement.

To most effectively communicate important differences with consumers, they need to use different brands.

Unfortunately, I have my doubts about brand marketers' intent on finding and taking this road.

Monday, January 7, 2013

Interesting Dichotomy


At lunch, I noticed this interesting contrast on the backside of a can of Arizona's Arnold Palmer.  The can boasts that Arizona is "an American company" but less that an inch way confesses that its a "Product of Canada."

Friday, January 4, 2013

Why Fast Food Cannot Divorce The Dollar Menu


Fast feeder Wendy's officially announced yesterday that it would be replacing its 99-cent value menu with a new creation called the "Right Price, Right Size" value menu.  The "Right Price, Right Size" menu will include fan favorites from the old 99-cent offering complimented with slightly pricier items that are capped at $2.

Why would Wendy's end such a fixture to its brand?  They say costs are the culprit.  The prices for key ingredients like meat and cheese are cutting into their slimmed-down value menu margins.

However, there's a strong warning that Wendy's "Right Price, Right Size" menu could be a marketing wrong.  They should look no further than category-leader McDonald's.  After sluggish 2012 third-quarter results, McDonald's CEO Don Thompson blamed marketing higher-priced items on its highly-comparable "Extra Value Menu," which didn't "resonate as strongly" with consumers as the dollar menu.  He then proudly proclaimed "we're going back to talk of the Dollar Menu."

I think there is something perfectly simple and straightforward about a dollar menu.  Consumers not only know their favorite items but they also have been trained to only pay $1.  In their mind, the price of the product is fixed because it’s been branded that way; which is why price and product should never be married.

Pairing the product and price can certainly provide a short-term boost.  The dollar menu at McDonald's, the (formerly) 99-cent value menu at Wendy's and the $5 footlong at Subway were critical to the success of each brand during the cash-strapped consumer days these past four years.  However, even as economic conditions improve, marketers are discovering that it’s difficult to divorce themselves from these branded bargains.

Thursday, January 3, 2013

Wednesday, January 2, 2013

The Google State of Mind

Is your strategy focused on being on the mind of the customer or being at the top of Google's ranking?

I think the answer to this question says more than you might think about your brand.