Category Archives: New Products

Don’t Be Something You’re Not

This week a woman named Federica Marchionni was eased out of her position as CEO of Lands’ End after only 19 months on the job.

federica

Federica Marchionni

This illustrates (fairly predictably) what can happen when a brand tries to be something it’s not.

Ultimately, brand-building success is driven by meeting customers’ needs, not by trying to teach them to want something different. And loyal customers have this peculiar habit of resisting (resenting) signs that they’re being taken for granted.

lands-end-1981

Lands’ End 1983

landsendgroup

Recent Lands’ End

 

 

 

 

 

 

 

 

 

In the case of Lands’ End, since its 1963 founding by Gary Comer as a sailing supplies business, it developed a heritage as a casual sportswear business that was eventually bought by Sears (and spun off in 2014).  Mr. Comer was fond of saying “Take care of the customers, take care of the employees and profits will take care of themselves.”

But Lands’ End had recently been stumbling, so Ms. Marchionni, with a background at high-style retailers Dolce & Gabbana and Ferrari, was brought in and offered an experienced, glamorous executive who could help reshape Lands’ End “into a meaningful, global lifestyle brand”.

That’s when the trouble started.

federica-kate-hudson

Marchionni and actress Kate Hudson

New lines were immediately introduced, meaning loafers were sold alongside stiletto heels. Ms. Marchionni dropped low-profitability catalog shoppers and hired prominent fashion photographers to shoot elegant catalogs at exotic locations. She insisted on working out of New York City rather than the corporate headquarters in Dodgeville, WI, and was often seen hobnobbing with celebrities.

lands-end-canvas

New Lands’ End Canvas Line

lands-end-shoes

Lands’ End shoes – traditional and new

 

 

 

 

 

 

 

 

 

 

 

 

All of this alienated not only customers but employees, who were used to casual access to top management in Dodgeville and who would be critical in execution of plans. And unfortunately sales lagged spending, creating a lot of red ink. Ultimately the board decided it was time for another change.

old-spice

Successful reposition – Old Spice

While there are success stories about brands repositioning to catch a younger/new demographic (think Old Spice or Target), this is not the first time a brand has suffered from trying to fly too close to the sun.

JCPenney famously failed recently; going farther back, the breeding ground (figuratively) of nerds, Radio Shack, tried and aggressively failed to get more hip by calling itself ‘The Shack’. And even staid Dolly Madison snack cakes invented a character called the ‘Snackin’ Dude with a Snackin’ attitude’ to try to become somewhat more hip. Another whiff.

radio-shack-the-shack

Radio Shack unsuccessful reposition

Back to Lands’ End, the acting CEO (COO James Gooch) spends all of his non-traveling time in Dodgeville and is odds-on favorite for the permanent role.

We’ll see how the company and customers respond to an expected return to tradition. On the other hand, Mr. Gooch was recently CEO of the S.S. Radio Shack. Hmm…

Conclusion #1- – ignore loyal customers at your own peril.

Conclusion #2 – – just because a brand isn’t hip, doesn’t mean it isn’t great

Advertisements

Inward Focus is not Customer Focus

Posted on

velveeta1

The apocryphal story goes like this:  at the old Kraft, the Velveeta brand manager crowed during Brand Review (think: Inquisition without the charm) about his 95% market share of ‘pasteurized process cheese spread’.  The senior marketer, Yoda-like, then asked “but what is your share of all cheese used for cooking?”, to which the Brand Manager burped out “around 5%”. The senior manager suggested that maybe there is more to marketing than just comparing yourself to your own internally defined category.  And she was right.

Sometimes as marketers we forget that not everyone (read: no one) thinks about our product as much as we do.  This myopia unfortunately translates to missed opportunities.

Marketers need to consider each product interaction as an opportunity to intrigue and possibly inspire a new user.

What are hardwood pellets?
During a recent Costco expedition I went to grab the traditional, if unexciting, big blue bags of Kingsford for the summer.  My 40 lb snatch and heave into the cart was interrupted when I noticed an appealing orange bag with copy that excitedly extolled the virtues of what was apparently an alternative – – gourmet hardwood pellets!  They promised ‘superior quality you can taste every time’ and ‘food infused with flavor’!

PelletsPellets2

 

Curious about a potentially new way to spend even more money in the vain hope of improving my grilling, I looked further at the package to see what these ‘pellets’ were.  I was up for it!

Unfortunately, there was no explanation of what pellets are, no visual of what they look like, nor any indication of how they might be used.  Nothing.  You apparently were either a Pellet Person or you were unimportant to the manufacturer, Traeger Wood Fired Grills.

A quick smartphone check revealed that there is indeed a unique type of grill that uses pellets instead of charcoal.  These devices are also made by Traeger, which features grills from about $400 to $1200, along with a huge array of accessories.  Cool looking stuff.

Pellets!

And it appears that pellet grills are a growing segment, presumably stealing share from traditional charcoal or gas grills.  Because they require less effort.  Of course!  God Bless America!

Raichlen

According to the aggressively coiffed Steven Raichlen, the host of cable’s Barbecue University and writer of the Barbecue! Bible blog, “the Hearth, Patio and Barbecue Association (HPBA) reports that wood pellet grills are one of the hottest trends in the industry, offering consumers the primal flavor of wood smoke coupled with the turn-of-a-knob convenience of gas. Roughly 300,000 units were sold last year—less than 2 percent of total grill sales—but the popularity of pellet grills is surging.” (http://barbecuebible.com/2015/02/20/new-pellet-grills/)

Presumably those people in the pellet grill business would be interested in inspiring avid grillers, like…me.  But they whiffed on this chance.

There is a basic lesson here – – don’t waste a valuable potential messaging opportunity.

TFB88PUB_BLU_01

If you are in a position where potential future users may be exposed to your product or service, don’t breathe your own exhaust – – remember that there are people there who might be interested – – if you just give them a little information.

So even if you consider yourself the king of your particular pellet hill – – remember that there’s probably a bigger mountain to climb out there.

I Know, It’s Only Rock ’n Roll, but…

Posted on

We try to refrain from simply reposting articles but this is a great example of how basic business principles can apply pretty much anywhere.

BN-NW458_Stones_J_20160504165415

The Rolling Stones – Masters of Their Universe

The Wall Street Journal recently ran a short article highlighting keys to the remarkable success and longevity of the World’s Greatest Rock ‘N Roll Band.

Ultimately, following these guidelines (with some caveats) are a pretty good prescription for success.

  1. Choose the right name.  We’ve commented before that a company shouldn’t try too hard on finding the perfect name.  If the product is excellent, the name will seem genius in retrospect  (witness Death Cab for Cutie and the Arctic Monkeys – – or the Beatles for that matter).  So, really, there are 4 tips here, not 5.
  2. Find a unique position in the market.  The Stones realized that they could be the bad boys relative to the Beatles’ wholesomeness.  Everyone loves a bad boy.
  3. Creatively beg, borrow or steal.  The Stones’s early hit “The Last Time” was gently lifted from the Staple Singers’s “This May Be The Last Time”  – only with a more catchy guitar riff and decidedly different lyrics.  They made that song their own, unlike Robin Thicke, who more blatantly ripped off Marvin Gaye.  Be inspired, but don’t plagiarize.
  4. Shed barriers to success before it’s too late.  The Stones’s arguably most talented member, Brian Jones, became unreliable and disruptive.  The group decided they needed to kick him out if they were to succeed.  They did, and a month later he was found in the bottom of his pool, another member of RnR’s infamous 27 Club.

5.  Continually reinvent.  Markets change, competition changes – – to survive long-term you must be able to anticipate and change.  Madonna and David Bowie are great examples of morphing to meet the need.  The Stones’s 1978 album Some Girls was a direct response to the threat of the burgeoning punk scene that included new artists the Sex Pistols, Ramones and the Clash.  Definitely different product than “The Last Time”.  As Keith Richards remembered, “It moved our ass, boy”.

Perhaps not something you’d hear from Peter Drucker, but still illuminating.

Not all Innovation is High-Tech. Not all High-Tech is Innovation.

To borrow an old punchline, sometimes companies innovate around technology ‘because they can’.*

A recent visit to the Hertz facility at the Denver airport illustrates the point – – innovation can only work when it is designed around the user experience.  Innovation that requires the user to adapt to technology, at the expense of experience, is not usually a blueprint for success.

My key car rental criteria are price, convenience and how fast I can get my car. At the counter, I preemptively say I don’t need an upgrade, don’t need insurance, and will fill it up myself. I also tell them they’re on the clock and my personal record is out the door in 3 minutes (although I had a wonderful 1:30 experience just this past week). It works, and it’s not nearly as jerky as it sounds. (really)

photo-1

So I was eager to experience the Denver Airport Hertz facility, which is huge (2500 s.f.) and bristling with open format desks, high-tech kiosks, and bumblebee-colored employees. The car rental facility of the future, right?  I’d be out of there in no time.

It was a disaster.  First, 25 minutes in a standard Disney-style winding line; then left the line and went to the separate line for a kiosk on the recommendation of a Hertz employee.  10 minutes to get to one of the kiosks, which needed assistance to operate.  The disembodied head on the kiosk video screen informed me that while I had a reservation, my car would not be available for at least another 30 minutes.  Except, of course, if I wanted to upgrade (at extra cost).  (we’ve seen this before)

I got mad and tracked down a manager, who finally gave me an upgraded vehicle without the upcharge (duh).  That was 45 minutes of hell in a facility that was presumably built on research and smart engineering.

The expensive technology and fancy building did nothing to help this experience.  The difficulties I had (kiosk operation, being held hostage for an upgrade) were resolved with the human touch.  The same human touch that gets me in-and-out of low-tech counters in under 5 minutes (often with a high-five to the counter person).Hertz charging

(Perhaps I should have thought more when I passed the cute ‘recharge’ station – under what conditions would you be using one of these at a car rental place?!).

photo 3

On the other hand, a recent Delta flight showed how smart innovation made the experience much better.  This was on a newly refurbished plane.

The overhead compartments had signs asking passengers to load their rolling bags vertically rather than horizontally, which gets more bags on the plane, and therefore keeps me from gate-checking.  Smart!  I win!

photo 1-1photo 5

Facing me on the bottom of the seat in front was an electrical outlet. I’ve seen these before but they’ve been awkwardly placed in a hard to reach place around my ankles, presenting the constant danger of feeling up my seat mate’s leg.

In both situations there was an outlet on each seat.  Delta figured out it’s better when you can see it.  Smart! I win again!

Technology has transformed our world and has fueled amazing innovation.  But this innovation has only worked when it has improved the user’s experience.  

Technology with no benefit is usually not lasting.

*it’s a guy joke.  If you don’t know it already, you probably wouldn’t appreciate it.

Donald Trump and Bernie Sanders are Bags of Chips

…and the other candidates are furniture.

There is a marketing lesson here; allow me to explain.

Everyone and their mothers and the horses they all rode up on have already weighed in on what’s driving the surprising dominance of Trump and Sanders in the polls to date.

Donald ChipsBernie Chips

The Armchair MBA looks at this as a lesson for marketers:

There is a clear difference between an impulse purchase and a considered purchase, demanding different approaches.  Depends on whether your goal is short-term or long-term (or maybe both).

  • Impulse purchases (like chips):
    – immediate consumption, no long-term commitment, low-risk, who cares
  • Considered purchases (like furniture):
    – longer-term implications, significant commitment, meaningful risk

As chips and as candidates, Donald Trump and Bernie Sanders present the most powerful, clearly articulated and differentiated propositions that are intriguing to a segment of the population.

With virtually no risk in trying a chip (or answering a poll), the chips (and candidates) that stand out as different are more likely to get early trial and short-term success.
Other chips (candidates) have less extreme claims, are consequently less differentiated, and thus any one is less likely to gain a majority of trial (poll votes).

Candidate Chips

After trial (polling), however, things could change.

Trump chips, while very spicy, might present an unexpected burning sensation after ingestion.
And Sanders chips, while appealing conceptually, might not be particularly palatable or affordable.

In both cases, these chips will still likely retain loyal users, but would likely represent a smaller niche
– as candidates, the same might also be true

Chips that may be designed for more long-term market success will necessarily be positioned to garner a broader share of the population and have staying power. While less overtly exciting, they may have a more balanced combination of ingredients and claims.

As election time nears, candidates become viewed less like chips and more like furniture: a longer-term commitment that demands (at least hopefully for most people) more thoughtful consideration, doing research, shopping, weighing benefits vs. cost and risks.

NET: For short-term impact (trial), claims must be clear and differentiated.

For longer-term success, both claims and performance must be carefully crafted to meet the needs of a meaningful portion of the population.

Barbie-Glam-Dining-Room-Furniture-Set

Hopefully our voting public exhibits at least the same care in choosing their candidates as they do in picking furniture.

SAP spells ‘Trust Me’: S-I-M-P-L-E

Say ‘SAP implementation’ to someone who has been through one and you are likely to get a look conveying some combination of pain, pity, terror and dread (and perhaps schadenfreude).

Enterprise Resource Planning (ERP) giant SAP recently announced an approach and suite of applications called ‘Simple’.

For a company with a reputation of being anything BUT simple, this casting-against-type positioning could be tricky business; successful transformation will not be immediate.

And one look at their recent 2-page WSJ ad indicates they may not yet be fully embracing this ‘Simple’ concept.

SAP

5 years ago Domino’s acknowledged that it didn’t taste as good as it should, and used this acknowledgment to justify a reformulation that was the focal point for a new campaign.  By many accounts, this bold ‘we sucked, now we’re better’ approach has yielded good results.

DominosCombined

But ERP software is not pizza – – with pizza, a $10 or $15 mistake and you’re on to someone else.

Do a search for ‘SAP Implementation’ and it’s obvious that the stakes are quite a bit higher – – not only $100 million or more, but years of organizational churn and resources, as well as lost opportunity if/when things go awry.  You can’t say ‘we know we’ve messed these up in the past, but going forward we’ll be awesome – trust us’.

A few examples here, some others below:
Avon Products halts an SAP implementation, leading to write-down of $100-125 million
– Waste Management and SAP in $100 million lawsuit
– HP claims $160 million damage from flawed SAP implementation
Select Comfort abandons SAP ERP implementation
SAP issues at Hershey prevents $100 million in shipments for key holiday
While client’s management often has a hand in screwing things up, at the end of the day, it’s SAP’s name in the headline.

SAP has chosen to own ‘Simple’ as its defining principle going forward.  In the ERP space, this is a compelling proposition. And some industry experts are cautiously optimistic.

But based on SAP’s history, it’s a tall order – – and prospective clients will certainly have a ’show me’ mindset.

Requiring 2 full pages to explain Simple is not a great start.

A Wilde Affair – 5 Lessons for Marketers

By now you’ve seen Chevy Sales Executive Rikk Wilde’s cringe-worthy presentation of the World Series MVP Award to the SF Giants’ Madison Bumgarner, as reporter Erin Andrews and Commissioner Bud Selig both looked to be trying to flag down a cab.

Wilde

Not surprisingly, this clip immediately lit up the Twitterverse and generated a remarkable amount of media attention (and references to Chris Farley, with whom Mr. Wilde was frequently compared).

Farley2

But perhaps unexpectedly, rather than distancing itself, GM took advantage of it with a wink and a smile, embracing Mr. Wilde’s performance and his instant classic utterance “Technology and Stuff”. Within a few days of the event, there was a full-page ad in USA Today playfully referencing the World Series MVP ceremony.

T&S-tweet

Chevy Tweet

T&S - USAToday

USA Today Full-page ad

So of course, The Armchair MBA has decided to spoil the moment by trying to extract object lessons from this episode.

And there are clear lessons from L’affaire Wilde that today’s marketers need to keep in mind:

1) Expect the unexpected.   Speed is key, so be ready.

2) Serendipity can be your friend – be open to improvisation to marketing plans.

  • Even the best plans need to be able to stretch sometimes to take advantage of marketplace events
  • The Chevy Colorado pickup had just (Oct. 3) been named in a large airbag recall, which was limiting sales
  • The publicity surrounding Mr. Wilde’s presentation drew new attention to the Colorado, and the recall went from front burner to a secondary issue, at least temporarily

3) Consumers like authenticity and the little guy.   And they hate to be manipulated.

  • Wilde’s memorable performance, while not pretty, was also clearly not slick corporate-speak, and therefore broke through the clutter, arguably much better than if a senior executive, or GM CEO Mary Barra herself, had presented the award
  • We will use ‘little guy’ in the figurative sense. Mr. Wilde, by virtue of his stammering, sweating performance, reminded us that we’re all human, and if faced with a global TV audience, might be a little nervous ourselves.  So in an unplanned way, this helped connect the audience to the product.
  • This was 100% authentic. If it turned out that it was at all scripted, it would have backfired on GM in a huge way
  • (As a side point, apparently Mr. Wilde was selected to give the award mostly because he was a long-time Royals fan and his management thought it would be a thrill for him — even though he was obviously not a media trained spokesperson.  Good for you, Chevy!)

4) Consumers like humility and a sense of humor

  • “Technology and Stuff” was a perfect way for GM to gently poke fun at itself
  • In contrast, denying or attempting to spin would have been futile

5) Branding is very powerful for people too

  • Unless you, as new parents, know with 100% certainty that your precious child is headed for a career path involving heavy metal bands or the adult film industry, for heaven’s sake, do NOT name him Rikk Wilde.