Tuesday, February 26, 2013

The Nook No More

In early 2010, I said that Barnes & Noble's version of an e-reader, dubbed the Nook, would not be a success.

I believed this because the Barnes & Noble brand was bookstores, not technology.  To compound their problem, it was a late arrival to the market.  The Kindle had staked out the leadership position in the e-reader category.

Regardless, Barnes & Noble took the bait.  According to Leslie Kaufman in The New York Times, Barnes & Noble is now reevaluating its presence in the e-reader category.  This is somewhat surprising news because as of very recently, the Nook received very significant investments.  Last May, Microsoft invested $600 million in the product and as recently as December, the British textbook publisher Pearson bought a 5 percent stake in the unit for nearly $90 million.

But while the category has seen considerable growth, Barnes & Noble recently warned investors that it will fall considerably short of its expectation of generating $3 billion for 2013.

As is often the case, the problem isn't with the product but consumers' perception of it. Despite earning positive reviews this past holiday shopping season, the Nook brand couldn't compete against the iPad and the Kindle.  If the Nook was first to the market, how its perceived is completely different.

Too many marketers neglect such basics in developing a brand strategy and unfortunately, will always do so.  The epitome of this point is the analyst who cites the reason for the Nook failing to be that "the Barnes & Noble brand is just very small, it has done a great job at engaging its existing customers but failed to expand their footprint beyond that.”

Barnes & Noble, whether they know it or not, is getting this one right.   

Saturday, February 23, 2013

Digital Coupons? That's Not The Future.

"Safeway Envisions Future Without Print Ads."

That headline really jumped off the screen when glossing over the most recent AdAge, triggering a "well no duh" reaction.  So much so that I almost didn't bother reading it...almost.

It's not exactly a bold prediction to say the world will enjoy less paper products in the future.  However, what isn't so certain is where does a brand go from here?  How can it use this technological leap to its advantage?

Perhaps the greatest advantage in shifting away from print to online is the ability to tailor the discounts to the customers' preferences.  In the aforementioned AdAge article, Safeway executives discuss the success their having the "Just For U" program.  This online loyalty program offers personalized deals and digital coupons.  Furthermore, I typically shop at Kroger and every so often will receive a pack a coupons in the mail for lots of the things I buy most along with stuff they want me to try.  Yet, to my misfortune, I often lose them or just plain forget about them, finding them in a drawer months after they expire.  

The problem is that the coupon is the brainchild of different era.  Thus, thinking about the future around the idea of coupons, trying to fit them into a different age, is extremely limiting when designing potentially more effective marketing programs.  This type of closed-circuit reasoning is why newspapers didn't invent Twitter or blogs.      

If Kroger can track my purchases and mail me coupons, what's preventing them from surprising me with "coupon discounts" at the register when I buy the items determined to please me.  Simplify it: nothing to print, to cut out or remember to bring to the store.    

The quite but massively-important added benefit of this program is the surprise factor.  If a store surprises you with a discount, the odds you'll talk about it increase.  But when shoppers buy with traditional coupons, discounts are expected.  Therefore, customers are less likely to discuss the purchase or repeat it without another coupon.  When the element of surprise is added, the customer views the discount as a bonus.

This vision isn't that far-fetched.  If you're one of the 10 million people in Panera Bread's loyalty program, then you already know this.      

Why doesn't the supermarket industry implement a similar loyalty program?  My guess their looking still looking for the coupon of the 21st century.

Sunday, February 17, 2013

How Maker's (Almost) Missed Its Mark

 Last week, Maker's Mark surprisingly announced that it was changing its bourbon recipe, altering its famed-formula from 90 proof (45 percent alcohol) to 84 proof (42 percent), on account of a short supply of bourbon.

Not surprisingly, the consumer push back from this announcement was swift and strong.  According to an article in the Washington Post, within two hours, the company received 2,200 comments on the move.

Today, the bourbon brand announced via Twitter that it's reversing the decision to conserve bourbon by adding a "touch more water" to the recipe.  Maker's Mark chairman Bill Samuels acknowledged that the brand "got it totally wrong" by focusing on fixing a supply problem at the expense of creating a brand problem.  

It would have been the first time in its 59-year history that Maker's Mark had altered the proof of the bourbon and they cite consumers' emotional connection to the formula as a reason for preserving it.

I give Maker's Mark a lot of credit for responding to its customers.  However, it's clear that it was not looking through the consumers' lens when it making the original decision to extend its supply of bourbon in order to respond to growing demand for the product. 

Maker's Mark forgot that its brand is much more than a price point.  They lost sight of a great story they developed and told us about heritage and the quality bourbon that's produced from its unique formula and distilling process.  All that branding stuff actually resonated with people.

Hopefully, the opportunity to look through the consumers' lens is a view won't soon forget.

Harlem Shake Anyone?

"Over 60 Ad Agencies have Harlem Shake videos."  That's a headline from AdAge that screams loud and clear about how broken much of ad land is today.

Those eight words should have marketers shaking their heads.       

Tuesday, February 12, 2013

Luv Lost at Southwest Airlines


Renowned British entrepreneur Sir Richard Branson once said, "that if you want to be a millionaire, start with a billion dollars and launch a new airline."  He should know from experience.  However, the industry exception to this humorous rule-of-thumb is Southwest Airlines, which just recorded its 40th straight year of profit, a stunning feat for an airline.

But according to a recent Los Angeles Times article, customer satisfaction at Southwest appears to on the decline.  Although the company built an acclaimed reputation on possessing a greater empathy for the consumer than its competition, recent moves suggest that the airline is succumbing to pressure from shareholders as its profit margin has dropped from 4.54% in 2010 to 2.44% in 2012.

Those moves include changes to its frequent flyer program, adjusting the cabin design to add six more seats per plane, increasing the fee for a third checked bag and an overweight bag as well as adding an optional $40 charge to be one of the first 15 passengers to board the plane.  Customers quoted in the Times article also griped that the difference between Southwest Airlines' fares and that of the competition is shrinking.

It should be noted that the company is keeping its "bags fly free" policy, which the Southwest credits for a 2% percent increase in market share since 2008 and for generating $1 billion annually.  Still, the article includes an odd quote from Southwest Airlines spokeswoman Whitney Eichinger, one that signals a slightly different way of solving problems at Southwest today, when she says "Yes, we have to keep up with the times and, yes, we have to change. But the truth is that Southwest remains a maverick in the industry."

I maintain that solving problems like other airlines have is both proven ineffective and by definition, unmaverick-like.     

The airline analysts quoted point out that, in regards to Southwest Airlines' policy changes, it remains dubious whether they will even have a negative effect because the sky isn't any bluer flying on the others carriers.  That might be true, at least for now.     

Could Southwest solve its profit-margin problem and maintain its unofficial title of industry maverick? Sure, and we can help.  As a thought-starter, I'll suggest a passenger raffle.  Passengers on Southwest flights could opt-in for $10 each (some amount) for the chance to get their flight comped or a future discount.  Southwest Airlines keeps the profits and passengers could have some in-flight fun in the process.

Post your ideas in the comments section or tweet them to me.  As always, thanks for reading.  

Friday, February 8, 2013

Tuesday, February 5, 2013

Most Marketers Fumble Super Opportunities

It all began during the pregame show, when I learned that Hyundai, an automobile brand strongly positioned as dependable and affordable because of its popular Assurance program, would truly prefer itself to be benz or a beamer.  Interestingly, I later learned that Mercedes-Benz prefers itself to be a Hyundai because it was promoting a "luxury" vehicle priced under $30,000.  It's a strange strategy for a brand that not too long ago was the beneficiary of rival Cadillac severely damaging its own brand by introducing a very similarly priced Catera.          

I also learned that Pepsi, which hasn't gained market share in the cola category despite introducing Crystal Pepsi, Pepsi One, Pepsi Blue, Pepsi XL, Pepsi Max, Pepsi Light, Pepsi Kona, Pepsi A.M., Pepsi Raw, Pepsi Natural, Pepsi Twist or Pepsi Throwback, is pretty confident that new Pepsi Next will finally put them over the top.

Similarly, I learned Budweiser is continuing its cannibalistic strategy this year as it introduced Budweiser Black Crown.  The Black Crown variety joins Budweiser, Bud Light, Bud Light Platinum, Bud Select, Bud Light Lime, Bud Light Golden Wheat, Budweiser 66, Bud Select 55, Budweiser American Ale and a host of others on the Bud brand tree.  Yet, as sales of the former King of Beers suggest, each variety is simply feeding off each other, as evidenced by a sales of Budweiser falling from a peak of 50 million barrels in 1988 (seven years after the introduction of Bud Light) to just under 18 million barrels in 2011 combined with a gradual decline in market share. 

Meanwhile, most brands used the Super Bowl as a really expensive attempt to measure a feel-good falsehood such as online engagement or awareness rather than a truer outcome like a sale.  For instance, Coca-Cola and Oreo spent significant resources to prove very little as its ads were more intent on consumers interacting with their advertisement than building a compelling case for consumers to interact with their products.

But even though Jeep and Audi made such a case to consumers, each was merely built upon soft attributes such as patriotism and boldness (described as bravery in the ad) respectively, which cannot truly be linked to either product.  Even as beautiful and poetic as the Ram truck commercial is, the brand will simply never own or become synonymous with hard work.  I believe the lack of emphasis on hard, tangible attributes by so-called marketers to be very disturbing.      

Thankfully, after watching nearly four hours of such marketing nonsense, late in the game, Tide delighted when it cleverly dramatized how it removes even the wildest stains from our clothes.

Isn't good to know the spoils of victory won't ruin our shirt if spilled?

This post also appeared on Talent Zoo's Beyond Madison Avenue blog.  

Monday, February 4, 2013

Your Latest Sale

You can spend a zillion dollars and a lifetime trying to figure it out, or you can accept that your latest sale was likely the result of a million little things done well. 

Sunday, February 3, 2013

What To Watch For Tonight

Will the thrill of being on the big stage ever take precedent over a marketers' duty to deliver a sales proposition?

 

Friday, February 1, 2013

Insincere Subway Keeps Running FebruANY


FebruANY, the hyped month-long promotion of Subway restaurants that serves up regular footlong sandwiches for only $5, is no more.  This February, according to the FebruANY promotional webpage, the $5 rule no longer applies to its Chicken & Bacon Ranch Melt, Roast Beef and Steak & Cheese.  However, this apparent technicality isn't going to interfere with Subway pumping up their promotion with the disingenuous FebruANY trademark.

It's easy to see why Subway would attempt such sleight of marketing hand.  They're obviously concerned consumers won't salivate for a FebruMANY when they've been trained on FebruANY the past few years.

Subway's reluctance to let go of $5 footlongs does keep with the industry trend of fast food marketers having trouble ditching their dollar menus.  Last month, Wendy's announced that its 99-cent value menu was becoming the "right price, right size" menu because, go figure, each item was no longer 99 cents.   

But after Subway's response to a recent international inquiry into their 11 inch "footlong" subs, nobody should be surprised that Subway would stick with their FebruANY name, regardless of how insincere it is, because, apparently that too is a trademark of the Subway brand.