Shoes, Elephants and Michelangelo

A famous and probably apocryphal story relates how in the late 1800s, shoe companies sent scouts to Africa to assess opportunity. All came back and said: “no one in Africa wears shoes – – there is no opportunity” – except for the rep for Bata, who said: “everyone in Africa is barefoot – – there’s a huge opportunity”. Bata shoes are now ubiquitous in Africa.

Bata1

With its vast population, diversity and resources, why aren’t more companies committed to growth from Africa? Why do EMEA business strategies have no patience for the ‘A’? Certainly with that many people, shouldn’t African commerce, like life in Jeff Goldblum’s Jurassic Park quote, “find a way?”

The challenge is daunting, and figuring this one out is above my pay grade, but thinking about solving for Africa can make just about any other challenge seem pretty straightforward.

africa

There are of course very real reasons that Africa is challenging. A Sept 16 scan of Google News stories across 54 African nations (below), reveals overwhelming existential crises such as Ebola, terrorism, sectarian violence, mixed in with a standard dose of President-for-life type scandal (see: Mugabe, Robert), but not many commercial or consumer focused stories. Where much of the developed world has surplus calories, Africa has a basic food (and water) deficit. A quick look at per-capita incomes shows that African citizens are among the poorest in the world. Barriers, indeed.

Yet we are all still more alike than we are different. We all have needs: food, shelter, entertainment, and yes, shoes.  And so within a mass of challenges, there are opportunities.  Bata figured this out long ago – – it saw millions of bare feet, rather than cultural or economic barriers, and methodically penetrated the continent.

The key, as in eating an elephant, is to take it one bite at a time.  In fact, it’s really just another execution of basic marketing – identifying segments, understanding their needs and barriers, and creatively and selectively applying solutions.  Pricing? Access? Promotion? Distribution? Positioning? Unique benefits?  A solution is almost always available – it’s just not always obvious.EatingAnElephant Unlocking this potential may be gaining traction: PricewaterhouseCoopers’s Africa Business Agenda 2014 report was released last week.  The report, comprising surveys and interviews with 260 chief executives in 14 African countries, indicates that CEOs are optimistic about growth despite volatility and uncertainty on the continent.  From Business Report/Africa: “The Chief Executives acknowledge that a lot more needs to be done in terms of transforming the continent’s potential for exponential growth into tangible business opportunities”. There are examples where creative and focused approaches helped realize growth from similarly unlikely places.

  • In India, Colgate has carved out over 55% of the oral care market (~$600 million+) despite toothpaste penetration of only 55% (and only 15% of them brush twice daily), and a per-capita income ranked 120 of 164 countries in 2013 (World Bank).
    • This was done by offering more affordable sizes, and innovating a multi-layer distribution system to penetrate the largely rural population
  • In Mexico, concrete giant Cemex, through its Patrimonio Hoy (‘Private Property Today’) program, has enabled many low-income families to build onto their homes on an installment plan at affordable levels.
    • For example, in this innovative program, one family pays $18 per month for $960 in construction materials, allowing them to add stepwise onto their home.

Whether it is Africa, India or a mass of consumers (or customers) at home, the same principles apply.  Where there is need, solutions are always possible.

Michelangelo

As Michelangelo said: “Every block of stone has a statue inside it and it is the task of the sculptor to discover it”.

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A Day In The Life of Africa – September 16, 2014

Country                                              Story 1                                        Story 2
Algeria                                                al Qaeda                                        Soccer
Angola                                                Sub-Saharan investment             Oil Exploration
Benin                                                  Ebola                                             Trade
Botswana                                           Crackdown on press                     Ebola
Burkina Faso                                      Soccer                                          Trade
Burundi                                              3 nuns murdered                             —
Cameroon                                          Soccer                                            —
Cape Verde                                        Soccer                                         Tropical storm
Central African Republic                 Muslim-Christian violence              —
Chad                                                  Guys named Chad                         —
Comoros                                            Islamic oil deal                   Indian Ocean Comm.
Dem. Rep. of the Congo                    Ebola                                          Mineral dev.
Djibouti                                               al Qaeda                                     Violence
Egypt                                                Fighting Islam                          Muslim B’hood exiles
Equatorial Guinea                           UN Ambass. accused          Call for national unity
Eritrea                                             Leather export trade                   US travel warning
Ethiopia                                           Relations with Egypt                   Egypt opposition
Gabon                                                Soccer                                            —
Gambia                                              Anti-gay legislation                       Ebola
Ghana                                                Ebola                                           Soccer
Guinea                                               Corruption                                    Ebola
Guinea-Bissau                                   Ebola                                           Political instability
Ivory Coast                                        Soccer                                             —
Kenya                                                Cost of living                          Investment/trade
Lesotho                                             Coup attempt                                   —
Liberia                                               Ebola                                                —
Libya                                                 Migrant boat capsizes                    Islamic terrorists
Madagascar                                      Lemurs                                            Locust infestation
Malawi                                               Political scandal                              Soccer
Mali                                                    al Qaeda                                          Sectarian violence
Mauritania                                          Moving weekend to Fri/Sat              Business/trade
Mauritius                                            Foreign investment                          Murder invest.
Morocco                                            Anti-racism demonstrations                —
Mozambique                                      Elephant poaching                           Political rivals
Namibia                                              Foreign trade                                    —
Niger                                                  US drone base                                 Baby trafficking
Nigeria                                               Building collapse                              Ebola
Rep. of the Congo                           Ebola                                              Political corruption
Rwanda                                             Genocide 20th anniv.                Rebuilding efforts
São Tomé and Príncipe                     Infrastructure dev.              New: cellular roaming
Senegal                                             Ebola                                               Soccer
Seychelles                                         Tourism                                            Protected species
Sierra Leone                                      Ebola                                                —
Somalia                                              anti-al Qaeda/ISIS                           anti-Shebab
South Africa                                       Pistorius trial                                    Rugby
South Sudan                                      Foreign aid worker ban            Internal peace
Sudan                                                Condemned Christ. woman         Peace with S. Sudan
Swaziland                                          UK power investment           Royal family antics
Tanzania                                            Foreign investment                       Infrastructure
Togo                                                  Qatar investment                          Soccer
Tunisia                                               Economic pressure                         Security
Uganda                                              Foiled terrorist attack               US warns Americans
Zambia                                              Political leader dies                          Soccer
Zimbabwe                                         $3B mining deal w/Russia                  —

The Loyalty Program That Will Survive the Apocalpyse – – and Why

The future of shopping and loyalty is mobile – – we are continually reminded about this.  Digital loyalty programs can leverage vast storehouses of data and sophisticated analytics, and can deliver individualized promotions at a time, place and shopping occasion that optimizes ROI.

JewelOscoPromoSo why the heck is there, sitting on my kitchen counter, a sheet for gluing small stamps received with each shopping trip at the local Jewel (Albertson’s)?  (If enough stamps are collected, a piece of Cuisinart cookware can be ours!).  

After all, this is an utterly low-tech, old media, one-size-fits-all loyalty promotion here in the digital age.

Ultimately the reasons for this low-tech promotion’s survival are related to its low-techness, and can be helpful to more tech-driven modern programs.

S&H GreenStamps

SinclairS&H_greenstamps

Hard to believe but this is essentially the same concept as S&H Green Stamps, which debuted over 100 years ago and were highly popular from the 1930s to the 1980s.  You got stamps when you bought stuff, filled out books (typically 1200 stamps) and could then win prizes from a catalog.  Stores that gave out these stamps used it as a competitive advantage.

And this is not an isolated grocery type program – – McDonald’s famously runs its Monopoly program, where customers get game pieces on everything they buy, and can win big prizes if they collect the right stamps.

mcdonalds-monopoly2013-300x300McDonalds_monopoly_pieces

 So what accounts for these games’ popularity? 

1) Simplicity – no apps, no logging on or passwords, no points to track online, no devices at all.  Just shop, stick, rinse and repeat.  It’s likely that there is greater appeal among older users for some of these promotions, but that doesn’t explain the McDonald’s popularity.

2) Can visualize success – each new stamp makes progress tangible and encourages continued participation

3) User involvement – Unlike an automatic electronic promotion, manually applying the stamps actively involves the participant, much like adding the proverbial egg to the cake mix turned Mom into a baker – increasing personal commitment level.

4) Closed-ended – a finite promotion period, so no long-term commitment or long wait for a payoff

5) It’s fun! – there’s an excitement to participating in these promotions!  It’s not just a mercenary exercise in repetitive purchases; there’s often an element of chance (and like gambling and golf, hope is what brings people back in the face of continued abject failure).

I’ve not seen any statistics about whether any of these promotions is more effective at driving shopper loyalty than any other.  I know that stamp programs definitely impact our shopping habits at home.

In any case, it’s clear that digital/mobile is the future of loyalty programs, even if the transition will take some time.

But some of the factors that make these old-school promotions popular can help make future loyalty efforts more successful.  

And until tech can replicate all of the above factors, it’s likely we’ll be shopping, sticking and winning, well into the future.

A Note To My Subscribers re: Links

To those who have subscribed to The Armchair MBA blog:  Thank you!  I continue to work hard to keep your eyeballs.

I’ve just learned that in some browsers the links I embed in my posts don’t show up.  Today’s post, for example, was all about some rather shameful WalMart TV commercials but for some people the links didn’t appear at all.

For future posts, I encourage you to go to http://www.thearmchairmba.com (bookmark it if you feel particularly tech-savvy) – –  I typically put several links in each post.  This way you’ll get every last drop of goodness from each post.  In the meantime, I’ll try to figure out a workaround.

www.thearmchairmba.com

Thanks.

Dave

WalMart Sets Nutrition Back 50 Years With These Spots

I don’t remember where I was when I saw the first of these spots, but it smacked me upside the head like a pouch of pasteurized cheese food product.

In the sausage-making process wherein retailers devise merchandising schemes and then pressure manufacturers to fund them, WalMart seems to have inadvertently sewn together a nutritional monster of an advertisement (two, actually).

The tagline on the spots: “Get a Smarter Start to School” couldn’t be more off the mark.

These ads take us back to a time when nutrition is an afterthought at best, and where the convenience of instant food is paramount.  
Sorry, but quick + non-nutritious ≠ smart.

UnhealthyWalMart

The setup:

A typical impossibly lovely and fit TV family is gathering before dinner and Mom asks what they want.  Of course the young kids, being kids, throw the long ball by asking for their favorite processed foods:  Hot Pockets and Chef Boyardee.  The husband, being, well, a guy, goes to his mental bacon file and all he can come up with is…Bacon Mac and Cheese.
Mom, the savvy and conscientious gatekeeper, decides she can easily avoid hassle and effort by immediately capitulating; three package openings, three microwave beeps and a token salad later, dinner is served.  Mom is hero.

No problem, right?  Well, let’s assess the nutritional damage (Daily limits according to Netrition.com).

WalMartDinnerNutritionals

(We’ve assumed the young lady would eat one Hot Pocket, the young man would eat one can of Mini Ravioli and Dad would eat until interrupted by dessert).

In terms of calories, these are not horrible (but also don’t include other things served with dinner).  In the case of protein, they perform well (particularly Dad’s, because bacon).  On the other hand they provide a fairly heavy dose of saturated fat, carbs and sodium.  And not much fiber.  So nutritionally, this isn’t particularly ‘smart’, and in restaurant terms, steers more toward Bloomin’ Onion than Chez Panisse.  It is definitely not a model for a balanced, nutritious meal.

More insidious is the positioning of convenience above everything, where instant food, regardless of its merits, is the solution to ‘what’s for dinner’.  The entire family seems to have completely slept through years of nutritional messaging, PSAs and school programs, and I’m guessing Michelle Obama would not endorse this spot.
The audience gets a great reinforcement of instant food as good habit, and a great opportunity to model simple, nutritious eating is missed.  Not good.

There is a breakfast companion ad in this campaign, where the featured items are Froot Loops, Frosted Flakes and Jimmy Dean’s Pancakes and Sausage (on a stick).  No additional comments necessary, except if the same family is bookending its day with WalMart’s meal suggestions, that puts a LOT of pressure on lunch.

On the other hand, it’s probably not easy to match program participants to be nutritionally balanced.  And at the end of the day, business is business.

Check out this Kraft Mac & Cheese ad from the 1950s, and hang in there for the hot dog meal suggestion.

We have some significant weight/health issues in this country, and I wish we could do better.

Little League Whiffs on a Golden Opportunity

For most people in Chicago, and many across the U.S., this year’s Little League World Series rivaled any other sport in excitement and inspiration. This was in no small measure due to a few unexpected subplots.

Yet Little League, with a chance to embrace a unique opportunity to broaden its appeal, missed a golden opportunity in its TV marketing effort.

For those who didn’t follow the LLWS (which ended yesterday), two story lines completely dominated the coverage, and for good reason:

chi-jackie-robinson-west-fans-20140823-004 jrwcoverDJButler

1) A team of kids from Chicago’s South Side, Jackie Robinson West, overcame significant odds to reach (and win!) the U.S. Little League Championship game (falling short in the World title game to a very strong South Korean team). These kids, all African-American, are generally from less privileged backgrounds, yet showed how far a person can go, through preparation, determination, poise and pluck. It was a joy to watch these kids play, and they truly united the city of Chicago across all socioeconomic and demographic strata, a particularly welcome shift from Chicago’s more typical tragic stories of violence.  They are true role models for everyone, not least those for whom organized sports may be less accessible.

Mo'Ne 2) Mo’ne Davis, from Philadelphia’s Taney Dragons team, became the first girl to pitch a complete game shut-out in the LLWS, with pitches over 70 mph. For opposing batters, that would equal a major league pitch of over 90 mph (due to the shorter distance to the plate). Mo’ne’s heroics helped her team to third place overall, and created significant publicity for her, including the cover of Sports Illustrated.  For girls everywhere, Mo’ne is a fantastic role model.

These two stories elevated Little League to a meaningful place in cultural significance, with stories about opportunity, teamwork, dedication and perhaps above all, inclusion.

Unfortunately, during the broadcast Little League, in a continuation of its ‘I am Little League’ campaign, showed a PSA that completely missed an opportunity.  The faces in the otherwise well-done spots were for the most part straight out of Norman Rockwell circa 1950: charming kids but not a person of color, and certainly not a girl, in sight.  (I saw this spot but was unable to locate it online.)   

Here’s a fairly typical PSA from earlier in 2014; based on this past week, ‘I am Little League’ is now quite inaccurate:

https://www.youtube.com/watch?v=zfcTqCj3hqg

In a world where organized sports for kids are increasingly specialized and expensive, there are too few examples of kids participating for the sheer love of the game (as opposed to a stepping stone to a pro career), or examples of girls competing effectively with boys on equal terms.  

This year’s LLWS was a tremendous chance to say “We’re Little League – – we don’t care where you’re from – – if you want to play, we want you!”.

So perhaps this year’s LLWC was two big steps forward, and one back, but at least it’s headed in the right direction.  Now if you’ll excuse me, I need to make plans to attend Chicago’s parade Wednesday for the Jackie Robinson West team.

Why does my phone company want to be my girlfriend?

For that matter, why do an insurance company, car company, and fast feeder also want to be my girlfriend?  (and where were they when I was an undergrad?)

Well, actually, they want to be your girlfriend too.  And I’m talking about long-term girlfriend, not quick little fling girlfriend* (example of that below).

Why?  Quite simply, they want you to like them.  And likeability is very good for a brand.   All else being equal, people would rather do business with a company they like. 

If you’ll work with me on the analogy, these are companies in very competitive, undifferentiated, and more functional than fun businesses.  We’re talking AT&T, Progressive, Toyota and Wendy’s.  They know there are other comparable offerings out there, so they do not want to play hard to get.  They want to be the brand you’re comfortable with and want your parents to meet (if you’re a guy).  If you’re a woman, they’re someone who’d be fun to hang around with.

Here’s a directory of the most prominent of the current ‘girlfriend’ spokespersons.

Girlfriends

Why do these spokespersons work so well?  They’re funny, smart and pretty.  Not beautiful, pretty – – girl next door pretty.  There’s a difference.  Progressive’s Flo, of course, started this recent wave, but all have serious comedy/performing chops.  They are naturally funny, and they’re in on the joke.  All are dressed conservatively, as if to maximize appeal without overt sex appeal.

In short, you like them for all the right reasons.  And if the advertising is successful, some of this likeability/appeal rubs off on the brand and helps you like the company just a little bit more than the competition.

Here are sample clips from each of these spokespersons.  They would seem to appeal to all major genders equally.

Toyota’s Jan (her expression at around :15 is pure comedic genius):

Progressive’s Flo:

AT&T’s Lily Adams:

Wendy’s Red:

These are fun spots, they build the product into the story, they catch your attention, and refreshing the campaign minimizes wearout.  And — they respect the viewer – wow!

So what’s wrong with beautiful?  Well, none of these women is Gisele Bündchen.  (actually if you look closely, Gisele Bündchen isn’t even Gisele Bündchen.  But that’s another story).

The reason:  beautiful just wouldn’t work.  Like it or not, it seems that model-beautiful and funny are virtually never celebrated in the same person (quick – – name a supermodel who cracks you up).   Using someone known primarily for their looks would be distracting, confuse the messaging, and rather than be likable, would make the spokesperson seem unattainable for guys and threatening for women.

*For an example of the exact opposite of the ‘girlfriend’ approach, check out the most recent Carl’s Jr. ad.  Suffice it to say, if you want the Texas BBQ Thickburger, you want it once, so you can tell your friends you had it.  But you would probably not respect yourself in the morning (warning, barely safe for work):   https://www.youtube.com/watch?v=MvKuhpZjA4M

The Carl’s Jr spot, like most of their work, has it all:  contrived, cynical, pandering, insulting, demeaning.

Likability is good.   I wish more brands tried it.

Mr. Selfridge’s Philosophy is Timeless – And Still Valuable

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