January 2008

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Shiny or not?

Fortunoff (or as we say in NY, Fortunoff’s) needs help to bring it back from the brink of bankruptcy. Lord & Taylor is reported to be ready to scoff it up and incorporate it into their larger, upscale retail stores. Here’s the rub — and for the record, I think Lord and Taylor’s new management company NDRC Equity Partners has done a great job reviving that wonderful old brand – Fortunoff sells expensive things that shine. Lord and Taylor’s sells expensive things that don’t.

 
Combining these two stores under one roof, even maintaining separate branded names, is a recipe for lagging sales – at both stores.   I’m all for consolidating real estate to make better use of available money, but not at the expense of diminishing each brand’s gestalt.  

Keep both stores on one retail footprint but separate them. Make them accessible through different doors, play different music, have different lighting, different merchandising and have sales associates wear different sweaters (you know what I mean.)

 
Shiny and not shiny don’t mix.
 

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Faster food

Here’s an idea for McDonald’s as it sets its plans for China. Loose the stores and build just drive-thrus. 

China is the world’s fastest growing major auto market. In many locations, I’ll bet over 80% of the customers arrive to McDonald’s — so why not rid the locations of the big walk-in real estate and simply build 30-40 drive up windows fed by a production facility built underground. The goal would be to get people served in under a minute, including drive-up.

 
With some walk-up windows for bicyclists and a sheltered picnic area for seating and bathrooms, McDoald’s new storefront-less, fully-automated approach, would revolutionize fast food the way it did in the 1950 and 60s.
 
It’s worth a try.  And in a market overflowing with people and cars, it seems a no-brainer. 
 

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The U.S. retail business is set for a downturn, just ask anyone at the Davos Conference in Switzerland. Yet Sony seems quite rosy about its future and rightfully so. Have you seen (or bought) one of Sony’s beautiful flat screen TV’s lately? And, OMG, have you viewed any programs in Hi-Def on them? They are amazing. Sony always kicked butt in TV but now they’re back with a vengeance. 

 
If the average American spends 3 hours a day watching television and that television offers superb color, digital sound and an excellent viewing experience – and all the while those 4 little letters (S-O-N-Y) are staring you in the face — you know that quality story is going to transfer over to other Sony products.
 
Sony TV’s never really left, but competitors had been making inroads. Not any more. Quality-wise, Sony TV’s are back on top. And that is going to pull along the rest of the product portfolio rather nicely, thank you very much. Great strategy!
 

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Two big ideas.

 The Root is a new online magazine targeting African Americans, underwritten by The Washington Post. Its editor-in-chief is Henry Louis Gates, Jr. a writer and Harvard professor . The managing editor is Lynette Clemetson and contributing writers will include Malcolm Gladwell and William Julius Wilson. Donald E. Graham, CEO of the Washington Post and son of Katharine Graham, is its CEO and looks to be putting some serious financial support behind it. With Senator Barack Obama running for president, now may be the perfect time for The Root’s launch.

 
Another interesting fact about the magazine is its focus on genealogy. Building family trees is encouraged as is DNA testing to assist in the tree building. Mr. Gates owns a company www.AfricanDNA.com that will assist in this DNA research as African Americas trace their lineage backward, extending to various regions of Africa.  Very cool stuff.
 
Both of these are powerful, timely ideas, but probably should remain separate business ventures. The mission gets a little blurry when trying to explain how the two things work together, e.g., politcal and cultural news/commentary and genealogy. Were I running the show, I’d keep The Root for the genealogy business and come up with a more today, topical name for the editorial property. And separate them.
 
That said, good luck to both enterprises.
 

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One Ford Campaign.

 “One Ford,” the new rallying cry of CEO Alan R. Mulally, is an internal and Wall Street message intended to build moral among employees and The Street on the heals of crazy losses. Ford reduced losses by close to $10 billion in one year but was still $2.7 billion in the hole in 2007. “One Ford” connotes consolidation of the four Ford companies into one and the reduction of the many, many production platforms around the world into a more economical number. 

 
Today TV stations are crowded with Ford cars commercials — and the cars are very nice. Sales of the Edge and Focus will lead the way thanks to some nice designs and smart partnerships. That’s what we need to be hearing about in the business press, not about employee rallies with people are holding up “One Ford” cards. 
 
Build better cars. Build greener, more fuel efficient cars. Focus on the cars and drivers. Then wrap them in an exciting new brand envelope. There is no need for public displays of company solidarity. Even all the Ford dealers you closed this year would agree with that. 
 
 

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This whole pharmaceutical advertising thing is driving me crazy. Pharma ads today read like investor relations documents: they contain thousands of words, are dense, unintelligible, full of obfuscation and blather. Has anyone other than a lawyer and proofreader really ever read one of these print ads stem to stern(um?)

 
Today Merck issued it a counterpoint ad telling readers not to believe a recent study questioning the combined efficacy of cholesterol drugs Zetia and Vytorin. Give it a read, if you have an extra hour. 
 
I’m old school. I want my doctor to proscribe medicine and to know about and believe in that medicine. I don’t want to make the decision after having read 10,000 words of gibberish, that includes a side effect, such as “in rare cases, your Homer Simpson might turn green.”
 
When we have socialized medicine, I certainly don’t want competition to diminish – a serious possibility — but reducing all of the spending on direct to consumer pharma ads should cut about 25% of the cost.  Sometimes, it seems, too much competition isn’t good.
 

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If you have been watching any of the democratic debates lately you have been treated to some serious sparing between Senators Barack Obama and Hillary Clinton. Nobody really likes the mudslinging which often results in a draw, but I have to wonder why so much time is reserved for this sort of McNasty campaigning? And why does the media focus on it so?
 
Here’s my take. As nasty as it is, and as petty as some of the points and counterpoints are, I think it gives us a view into the candidates under pressure. Do they remain cool? Do they stumble? Do they loose sight of their strategic vision or do they get embroiled in the tactical piss-fest? Who looks ready to crack, America ask. All other policy things being relatively equal, I look to these moments to help me understand who acts “presidential” under pressure and who is wired best to handle the pressure-packed job.
 

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Each year Anheuser Busch invests more and more money in Super Bowl ads. They are convinced it works. And why should they think otherwise? Over the past 10 years AB has earned the top spot more than any other brand in USA Today’s Super Bowl Ad Meter. 


How else does AB measure the success of these commercials? Here’s what they say: “Likeability” of the ads, increased sales and market share, “making our selling system excited,” and, lastly, “making consumers feel we are the leader in the category.” With the exception of sales and market share these metrics are drivel. Anheuser Busch beer sales are down. Bud Light is successful, but the rest of the portfolio is lagging. 

Do you know what really excites employees and distributors? Sales. Crazy sale. Perceptions of leadership, likeability and company excitement are second tier metrics for companies whose sales are dropping.  AB needs to do better job of blocking and tackling, focusing, and refining its core message.  It needs to stop spending 6 months each year on the Super Bowl. The Super Bowl is killing Budweiser. 

Here’s what I remember about Anheuser Busch Super Bowl advertising over the last 5 years: dalmations, clydedales, big fire trucks and snow. I’m not feeling it Mr. Busch.

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I’m not saying the economy is bad and I daren’t use the “r” word, but in all my years of reading the New York Times Business section I don’t ever recall thumbing through an issue without ads. Perhaps September 12, 2001.  Today’s business section had not one page of display advertising. Not a half page. Not a quarter. Oon-gots (I apologize to my Italian readers for the spelling.)
 
Actually, there are three postage size ads touting churches and a cigar-size ad selling a book about the bull market, but that’s it. If businesses aren’t investing in advertising in arguably America’s greatest newspaper, we are in a serious downturn.   

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source: TechCrunch

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