September 2008

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Promotions and discounts are a trap easily fallen into, and the Walgreen Company just confirmed its stumble.  Sales were up for the quarter but revenue down which according to corporate spokespeople was attributed to excessive promotions. Promotions are best used to create trial — to get people to do something they wouldn’t do otherwise. When people need an incentive, promotions work. 

 

Walgreens looked at the slowing economy and decided to cut prices and give product away as a tactical means to spark business. I am not privy to the exact product offers and have not seen the supporting communications, but will bet they did not support the core Walgreen brand idea, which if the website is accurate is “The Pharmacy America Trusts.”  And even if it did support the branding idea trust is such a lazy and hard to differentiate strategy for pharmacies, it’s no wonder sales are tailing.  Walgreens needs a real idea. And it’s in their storesevery day. They just have to find it. Peace!

 

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What has driven the amazing growth of the big box concept in retailing? Selection? Price? Volume? Yes three times. Yet as we watch the demise and troubles of many smaller local venues (read about the Jefferson Market, in the NY Times online), it is obvious what we are missing when we frequent the big boxes: personal service. I’m not talking about Customer Care served up by a corporate training video, I’m talking about service by someone who knows you by face, perhaps name, and past purchase context. 

 

Mom and Pop shops are owned and operated by neighbors. To succeed they have to pay attention. Mom and Pops are people not interchangeable sales automatons, they are good listeners and recommenders and in an emergency they are there for you. Mom and Pops are the fabric of America’s commercial strength. 

 

As we begin to bail out the Lehmans and the AIGs, let’s remember the local mom and pop stores in our communities. Peace!      

  

 

 
 

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While the economy is tough, marketers retrench and watch expenses. Larger marketers tend to have lots of specialist companies on payroll: Ad agencies, PR firms, direct marketing shops, media buying services, digital shops, promotion agencies.  As they look at these rosters and think about winnowing the list down they ask “Which of my shops will deliver the best value?” The answer must be the ad agency. They are more strategic and have the best general understanding of all the communications channels. Smart marketers will give more work to the ad agency, while not-so-smart marketers will give more work to the digital agency — trying to ride the ROI wave – where it is believed that digital is more measurable, predictable, and manageable.

 

Big mistake.

 

Digital shops, who admittedly are becoming more strategic, are still to tactically focused. In tough economic times the general ad agency is the most powerful partner. Peace! 

 

 

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I’ve written before about Douglas Conant, the head of Campell’s Soup Company, who in my view is one of the smartest CEO’s in the business world. Click here. Here is another example of his marketing prowess.
 
Campbell’s just broke a new campaign for Select Harvest soups. I’ve seen only one print ad and one TV commercial, yet can tell you it is focused and has a powerful idea. Two actually. It takes on Progresso soups and MSG (monosodium glutamate.)   
 
The print shows two large soup cans with MSG above the Progresso can and TLC above Select Harvest. The copy uses words like “farm-grown,” “sea salt,” and “100% natural.” Very factual, hard hitting stuff. The TV is even better.  Simply produced, a young-ish blindfolded women sits at a table using her palette to determine the provenance of Select Harvest ingredients down to which side of the hill the mushroom field is facing. The spot must have cost $85,000.
 
When advertising makes you want to buy something or change your purchase behavior it usually starts with a clean, focused strategy.  Mr. Conant and his marketing team bring that type of focus to their marketing party. (Oh, BTW, Campbell’s soup sales are up 13% on the quarter.)
 
 

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Circuit City’s chairman, president, CEO Philip Schoonover stepped down yesterday, perhaps from the weight of all his titles. Actually, Circuit City has been performing poorly and needed a change.
 
I’ve been in a Circuit City recently and the stores are nice. A little darker than Best Buy, but that’s soothing and makes the electronics glow a bit more. The place is not cavernous and the employees seem well-trained. Circuit City, though, does not really own a positioning the mind of the consumer.  And it could. I’m not sure Circuit City even advertises — if it does, it probably just uses circulars or price ads.
 
The new CEO needs a smart CMO, a good agency and a clean, ownable branding idea. Best Buy is about selection and price. Radio Shack is about personal service, but the place look like a toy store. Circuit City, with its name and heritage, has the opportunity to be “expert” in electronics.  The place that explains, clarifies and recommends. Think Geek Squad for all things electronic.  Peace!
 
 

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In tough times conspicuous consumption and wastefulness are uncool. In tough times we eat more leftovers, think about all the plastic water bottles we put into landfills, and ride our bikes to the store.   It’s the way we should live all the time, but what we really need is to have our kids remind us to be more thoughtful about waste. Just like when they told us not to smoke or drive after drinking a beer. Kids are our conscience.
 
In tough times, marketers that help educate our kids about the perils of wastefulness and poor environmental habits will be viewed by adults as more worthy of our business. And marketers who don’t just “preach” but “do” will be viewed most favorably — like the milk company that changed the shape of its gallon jugs to save energy consumption 3 ways.
 
 
 

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Crispin Porter is a very, very good ad agency. I don’t always agree with their creative, but more often than not it has a positive effect. As they get bigger, though, they run into client issues, category issues, and problems they haven’t seen before, making it hard to succeed all the time.
 
One issue they are currently addressing with the new Microsoft advertising is the corner they have been painted into by TBWA/Chiat Day’s “I’m a PC” campaign for Apple. The campaign uses a Bill Gates-like nebbishey figure to represent the PC and he is never as cool or consumer-friendly as the Apple figure. Moreover, he takes shots like a hockey goalie.
 
Crispin Porter has done a campaign that plays defense against the Apple campaign, in a sense whining about being mistreated and made into a “stereotype.” This defensive position is a mistake and very un-Crispin-like. They are best when on offense. Secondly, the genius of the Apple work is not in dis-ing Microsoft so much as it dis-ing the PC. Microsoft has taken the bait…focusing on the PC not the software. Microsoft needs its own idea. About software. And “Life without walls.” (the new line) isn’t it.
 

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The city council of Berkley, Ca just passed a program that will allow home and business owners to purchase solar panels to reduce energy consumption from the grid, while it reduces emissions and global warming therms.   The panels will be paid for through monthly property taxes, to the tune of about $180 per month – a number in the neighborhood of the resultant energy savings paid to the local electric company. Many other America cities are watching. Which brings me to solar power and Sharp Electronics. 
 
Sharp, long been known for its AQUOS TVs, copiers and consumer and business appliances, is not really well known for being the world’s leading solar company, but it is, “providing more solar energy around the globe than anyone else.” Inventors of the LCD and many other breakthroughs, Sharp has an amazing R&D department.   Here’s a business winning challenge to Sharp:
 
Design the world’s first solar power roofing tile. The tiles needn’t be small like current roofing shingles or large like tin roofs, they just need to capture the rays and heat of the sun, withstand 20 years of weather, and be fairly economical to own and install. 
 
Sharp Solar, has an opportunity to be the world’s first truly green company…and it already has a mighty head start. Good luck. Peace!
 
 
 
 


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Wild days are these. General Motors is going to Washington with hat in hand trying to get some gov’t cheese bail out money to help retool its factories to build more Chevy Volts. Late to the table with the new electric Volt, GM finally strapped on a pair and decided it was time to do something about its hemorrhaging business. 
 
Chrysler, on the other hand, is launching the biggest ad campaign of the year in support of — are you ready for this — the Ram truck.  I’m not kidding. Is it any wonder Chrysler? Chrysler is owned by Cerberus Capital Management (capital, as in financial crisis.) Some dolt must have said in a marketing meeting “the Ram is our largest selling brand, let’s give it everything we’ve got.”   David Lubars (of ad agency BBDO,) Deborah Meyer (CMO of Chrysler,) and world class film director Tony Scott should all be ashamed of themselves. Does anyone hear a fiddle playing and smell smoke?
 
GMnext is the signal General Motors is sending into the market. Good idea. And Chrysler is sending some cowboy shizz called the “Ram Challenge.” OMG!

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MySpace Music is doing some really smart things making music available for free to its social network members via MySpace Music, launching very soon. The idea that music companies might make more money from advertising than from actual sale of CDs and songs is pretty forward thinking…and believable. Think free TV model.
 
But my money is on Best Buy who just bought Napster. Have you been to Best Buy lately? If Best Buy was a pie, close to half of that pie would be in CDs, DVD, Blu-Ray disks and other digitally recorded media. Another huge chunk of that pie is dedicated to the display and sale of the devices over which this media plays. 
 
I would love to be the CMO of the new Best Buy because this is going to be the entertainment company. Best Buy will smartly leave content development to the experts and OWN the pipeline/channel to the consumer. WOW!
 

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