Category Archives: Product Management

Boeing 737 Max – end of a brand?

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One year ago Boeing’s 737 Max was one of the most successful launches in company history.

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A re-imagining of the venerable 737 design, it used updated aerodynamics, materials and engines to achieve 14% greater fuel efficiency vs the base 737, to compete with the Airbus A320neo (and it competed quite well).  It was granted FAA approval in March 2017 and the first copy was delivered shortly thereafter.  The product strategy expanded to include 4 variants.

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Now, after 2 mass-fatality crashes, production is on hold, the global fleet is on an expanding grounding with no firm restart date, and the entire line’s future is in doubt, taking with it the fortunes of a host of related entities including GE, the FAA, and the town of Renton, WA, where the planes were built, among many others.

Is this the end of what we know as the 737 MAX? 

Surviving a crisis seems to be some combination of:

  1. severity of an ‘event’
  2. how likely are negative consequences to occur in the future
  3. A third key factor is management’s action to swiftly and effectively mitigate future risk

Some very well-known brands have survived severe crises.  All are very healthy today.

Tylenolproduct-recall-tread-separation

  • Tylenol – while the fatalities were low, the Tylenol poisonings of the early 1980s were a huge public threat
  • Perrier – – in 1990, a crisis emerged when a toxic substance, benzene, was found in some bottles of Perrier
  • Firestone – – in the late 1990s and early 2000s, hundreds of people died related to accidents attributed to tread separation of Firestone tires, particularly on Ford products
  • There are others: Volkswagen (Dieselgate), BP (Deepwater Horizon), SeaWorld (orcas)

In all of these cases, Management worked to swiftly remove any affected (or associated) product from circulation, provided consumer hotlines, publicized the recalls, and provided clear ongoing updates to the public.

In all of these cases, there was a clear explanation given for what caused the issues, and the solution was directly linked to the cause.

aydsvalujetVioxx

Other brands did not fare as well:

  • AYDS was a very popular diet-suppressant candy in the 1970s and 1980s, but could not survive the mid-80s emergence of the disease AIDS. Because this association was not likely to end, the candy fairly rapidly was withdrawn from the market.
  • ValuJet – a budget airline, its Flight 592 crashed in 1996, killing all 110 aboard. The severity of the crash brought the airline’s poor safety record to light, thus raising doubt about future safety.  A rebrand was attempted but the airline eventually was discontinued.
  • Vioxx – -an anti-inflammatory marketed by Merck, this brand had over 80 million users. It was withdrawn in 2004 following reports that it could accelerate heart attack and stroke, exacerbated by the fact that evidence was known for about 5 years prior to action being taken.

In two of these cases, the severity of consequences was high, and there was low confidence that a long-term solution was possible.  In the third, the brand was associated with a disease with severe consequences – – just bad luck.

So will Boeing’s 737 Max survive?

  • High consequences from failure
  • No definitive cause or solution identified
  • Indecisive management reaction pushes resolution into the hazy future

The longer the lack of clarity lasts, the more doubt will grow around the 737 Max.  (As they said of the moon shot: “a million things have to go right.  Only one thing has to go wrong”.)

collage737Max

After a quick check of the headlines, put me down for a no.

The Perfect Storm, Part 2. Fixing “Pale, Stale and Male”

  • The mood at last week’s Miami Boat Show was sunny, like the weather.  Enthusiastic shoppers, lots of shiny new boats, and based on conversations with manufacturers, not enough new boats to meet demand.

Miami Show Crowd

However, as previously posted, some clouds on the horizon foreshadow the powerboat industry’s vulnerability in a way that will redefine the landscape over the next 10 years.

  • The core buyer base is aging. The 55-60 year old buyer base (let’s generalize and call them Boomers), are committed and usually repeat buyers.  And they look a lot alike  (in the words of one industry executive: “pale, stale and male”).
    But there aren’t enough younger first-time buyers (generalized as Millennials) to replace their unit or dollar sales.  Over the last 15+ years, the share of new boats sold to first-time buyers has dropped dramatically.
    It’s the same old dudes buying more boats.
  • Recession bites. The next recession, like the last one, will flood the market with used boats when owners sell, crushing new boat sales – – a sales circuit-breaker if enough Boomer owners exit the market permanently.  Remember, older buyers generally buy the more expensive boats.
Older fisherman

Typical core new boat buyer

This post tries to explain why there are not enough younger boat buyers, and offers some ideas of what can be done to prepare for the future.  While a bit longer than my typical post, there are lots of pictures, so please read on.

Boater_Age_NMMA

Source: NMMA

Following our Miami visit we circled back to get input from senior leaders representing manufacturers, dealers, Freedom Boat Club (the leader in this segment) and the NMMA, the leading trade association.

The upshot:  the core appeal of powerboating is not going anywhere, but the industry will need structural changes to address some fairly major challenges to sustain health (read: sales) over the long term.

And the current pace of innovation is not enough to drive the changes necessary.  Disruptive innovation is needed in everything from boat design, mode of power, sales/distribution channels to marketing.  This is not about reducing price or offering new colors or more horsepower.

Disruptors transform the way a basic demand is delivered.  Myopia has led to the downfall of many former market leaders.

  • Home Video: Blockbuster (VHS/DVD) yields to Netflix (streaming)
  • Personal photography: Kodak (film) yields to digital / smartphones
  • Books: Borders (bricks & mortar) yields to Amazon (online)

Based on appearances, the powerboat industry seems headed this direction – – focused on maximizing revenue with the current model (largely fiberglass gas-powered outboard boats sold through dealers).

There are signs that disruptors are at work — but there is a long way to go.

Buying Cycle - Boating

To explain where the industry has been and where it needs to go, we compared the buying process of legacy (Boomer) core buyers with considerations of potential Millennial buyers, in a 4-step process.

INTERESTEXPERIENCEPURCHASEHABIT

So what are some paths to long-term growth? 

Here are some ways the industry can take action (with some examples):

  • Before addressing new buyers, the industry must keep current owners around as long as possible.
    Slow down defections – – aggressively court current owners and build relationships through CRM, owner events and personal outreach – build loyalty and maybe get another purchase

To encourage Millennial first-time buyers:

INTEREST

  • Accelerate development of more agreeable, alternative power sources:
    • GM’s experimental marine division, Forward Marine, introduced a 100% battery-powered boat. With a max speed of 20mph and a range of 1 hour at that speed, it’s not ready for prime time yet, and won’t get you many dates, but this is the direction some of the industry will go.  Think Tesla.  Maybe a hybrid as well.
GM Boat

GM Forward Marine prototype

  • Indmar just introduced EcoBoost, the marine version of Ford’s EcoTec engine – gets the same horsepower and torque with 4 cylinders as a typical V-8. More environmentally friendly.

    EcoBoost

    Indmar EcoBoost

  • Torqeedo is an established German company offering quiet, efficient electric motors. Due to relatively low gas prices and a maximum of 100 hp, growth is slow but it is steady.  They’re getting traction.
Torqeedo

Torqeedo Deep Blue 80R

  • BlueGas Marine has developed economical natural gas power for boats. Traction is difficult for the above reasons as well as infrastructure (need the gas equivalent of charging stations), but the equation can change quickly if oil prices spike.

More aggressive marketing

  • Cross-market! Boating should not just be for insiders anymore!  Visibility must be increased by pursuing prospects with related affinities:  skiing, hiking, etc.  Not just a booth at the boat show.
  • Be more inclusive, diverse and experiential. Feature a range of age, ethnicity, interests.  Leverage social media to reach prospects beyond the familiar core demographics.

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Wakesurf photo

 

  • Innovate beyond current offerings – materials, design, features
    • New boaters don’t have the burden of tradition and will likely be more open to unconventional but more functional approaches (after all, someone had to buy the first Prius)
    • RIBs – Rigid Inflatable Boats (Axopar, Technohull) offer more efficient performance using different hull design and materials. They are really cool, perform great, look different, and that’s ok.
Technohull

Technohull (top); AxoparAxopar

  • Powered catamarans look different but offer advantages of smooth ride and more space

EXPERIENCE

Leverage technology to reduce fear as a barrier to purchase

  • Self-docking boats will be available in 2020
  • On-board digital video tutorials can provide much more effective learning than paper manuals
  • Controls are shifting from analog to digital, to mimic/integrate with smartphones

 

 

OWNERSHIP

  • Offer more versatile/multi-use boats at attractive price points – not single purpose (e.g. fishing) but can handle a variety of activities on any given day (analog: SUVs), making purchase more acceptable
    • Sea-Doo introduced a jet ski that converts to a fishing craft – – and it starts at $15k

 

 

  • Yamaha’s 2018 Boat of the Year (the FSH 210) is an affordable, do-it-all boat that is an excellent choice for first-time boaters.
  • Don’t require purchase to participate
    • Freedom Boat Club is a franchisor with 178 locations, with a model based on eliminating some key barriers to purchase (includes lessons, takes care of maintenance and insurance). The goal – make participation frictionless.
    • Members pay a monthly fee for unlimited access to a variety of boats in a huge number of locations, rather than committing 6-figures for a single boat.

FBC logo

  • Other similar models such as peer-to-peer rental, fractional use, etc. will undoubtedly increase as there is less reliance on solely purchase
  • More fully integrate the internet in the shopping/buying process – as in the auto industry, reduce reliance on aggressive final-mile dealer salespeople.

HABIT

No surprises!

  • Full transparency in the sales process, specifically costs/ obligations of ownership
  • Continuous on-boarding/learning  from the dealer, not just 2 hours when the boat is picked up
  • Aggressively encourage new boater networking to share tips, experiences, and create peer communities
  • Mentoring programs linking experienced boaters with new boaters.  Older boaters would love to pass along insights; a no-judgment setting makes it a win-win.

Mentor

These are just a few things the industry can do to mitigate unavoidable changes.  It will take foresight, patience, and investment – – and may not pay off immediately.

lots-of-boaters.jpg

But an industry that proactively and creatively adapts to the needs of new boaters with great product and a great experience, will be much more successful than what we currently seem to have – – an industry that asks potential new buyers to adapt to the way things have been.

Is This Any Way to Treat a High Value Customer? Ask My Mother.

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Do You Know Your Most Valuable Customers?  Do they know that you love them?

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It’s 10 times harder to get a new customer than to keep an existing one.  Loyal customers are more profitable and have the highest Lifetime Customer Value. They love your company already.  They have already been acquired, qualified and taken through the funnel – – you have them where you want them!

So why, with today’s sophisticated customer management systems, are loyal repeat customers too often just an afterthought?  Or missed entirely?

In today’s post we will try to demonstrate that marketers must make extra effort to identify and appreciate these great customers.

Customer Relationship Management (CRM) data-based systems have given marketers the illusion that they not only know everything about their customers, but that their email outreach perfectly motivates everyone.  This is not always the case.  They don’t always get it right.  Customer targeting algorithms written too narrowly can miss the bigger picture.

Case in point: my very own Mom.

  • Mom’s primary indulgence is periodically taking her 5 kids and their families (20-25 people total) to an all-inclusive resort. Club Med has been the most frequent (but not exclusive) beneficiary. (Yes, I chose my mother extremely well). Her aggregate investment is well into 6 figures over the past 20+ years she’s been doing this.

ClubMed1

In the case of Club Med, the algorithm failed.  They were focused on the last 3 years only.  And they completely missed the fact that she’s a long-time customer who brings a group. Mom turns out to be a mere Turquoise!  A rookie in their eyes!

ClubMed2

ClubMed3

———

ClubMed6

  • Mom selects the location, makes the reservations and all expenses go through her. She has 99% of the decision-making power on where we go. She should be a Big Kahuna to Club Med. They should make sure she’s happy, show their appreciation, and make every effort to acknowledge her loyalty.

ClubMed5

————-

ClubMed4

  • Yet Club Med scores loyalty on a per-person visit basis over the last 3 years. So despite influencing a lot of spending, Mom is classified as entry-level Turquoise, with the same status as a 10-year old who goes along with her parents. There is no acknowledgement at the corporate level, and none at the local Club level – – no one has told them who this is. No bottle of wine or fruit in the room. No upgrade. No ‘thank you for your continued loyalty’. Nothing.

ClubMed7

  • Small victory!  But it took a lot of effort.  Shouldn’t have to.
  • What defines your best customers? Longevity? Frequency? Cumulative $ spent?  Early adopters of new products?  This is really important to figure out.

Club Med of course doesn’t want to ignore their best customers. It’s just that their system isn’t set up to recognize them all the time.  To their credit, they handled my email rant with grace – – and came through in the end.

ClubMed8


ClubMed9

——–

So figure out who your best customers are and take care of them!

Right after you take care of your mother.

 

Peace of Mind as a HUGE Competitive Advantage

Some of you may know that I recently moved from the Chicago area to Raleigh after some 35 years.

While I have moved away from many close family members and old friends, the person I will probably miss the most is Mr. Lee (who, like my elementary school teachers, has no known first name).

Mr. Lee runs a humble shop called North Town Auto, and took care of our out-of-warranty cars, both domestic and foreign, for many years. It helped that he was only 2 blocks from us in Northbrook (convenient to the Metra Station!). And while there are probably mechanics who could do a certain thing for a slightly lower price. I would use Mr. Lee even if it required a drive to get there.

The reason? Peace of mind. Peace of mind that the car would be fixed correctly, that I would not overpay, that I would not pay for unnecessary repairs, that things would be done on time, that if he said I needed to do something, then I actually needed to do it.  That there was service with respect and a smile.  No worries, as they say.

I had complete loyalty to Mr. Lee.  And when it comes to loyalty, peace of mind turns out to be a huge competitive advantage.

Americans spend a lot on lots of stuff. They generally don’t seem to mind spending a lot.

However, Americans HATE the thought that they might be over-spending. And they don’t want to worry about it.

Think about institutions that offer what Mr. Lee does:

  • fair price (not necessarily the lowest)
  • high quality
  • consistency in delivery – no surprises
  • customer focus – great service, you don’t need to be on guard

Here are a few that come to mind that deliver great peace of mind:

unknowntj

  • COSTCO – – once I pass through those portals with my oversized shopping cart, I’m pretty sure that anything I put in my cart is a great deal and great quality (even if in the back of my rational mind I realize that some things are better value than others)
  • Trader Joe’s – – great value, interesting selection, fun experience – 2-Buck Chuck!
  • Amazon Prime – – I know my selections will be delivered on time and at no cost
  • Tire Rack – – awesome customer service, great pricing, instant shipping – – it’s the only way to go
  • Online window treatments – seriously – – it’s so automated and competitive that you’re not going to make a big mistake
  • Spirit Airlines (just kidding!)

Here are a few organizations that seem to fall down on the peace of mind continuum – – you might be overpaying, you’re not sure of the quality delivered, etc. And that bugs you.

chipotle

  • 1-800-Flowers – – sometimes works, sometimes doesn’t
  • Chipotle – – unfortunately moved from the other list – – love their food, but still have a vestige of doubt
  • Car Dealers – – sorry, guys – no change
  • Movers, painters, realtors, various local contractors – – until you build a track record like Mr. Lee, you’re not on my speed dial.

Why is peace of mind so important? Because we’re so stressed with just the basics of surviving from day to day that we need to simplify and eliminate unnecessary decisions.

dog

While Mr. Lee is a small businessman, the Peace of Mind list includes enterprises of all sizes.  We all have our examples of who provides peace of mind and who doesn’t (would love to hear about yours).

In the end, it’s about delivering consistent, dependable value. And that’s good advice for everyone.

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.

HarperCollins Teaches Us About Brand Management

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Watchman A strange thing happened during the recent launch of ‘Go Set A Watchman’, the new(ly discovered) first novel by Harper Lee, author of the classic ‘To Kill A Mockingbird’:

  • Publisher HarperCollins advance printed more than 2 million hardcover books
  • Presses were globally coordinated to simultaneously deliver versions in multiple languages
  • Extremely tight security was used, including shrink-wrap, security cameras, and secured shipments by truck to retail locations
  • Barnes & Noble was in the news

BN-IL593_HARPER_P_20150517145924

A new book shrouded in mystique, focused on retail distribution sounds more like a 1980s release than 2015. Especially for a book that was written before TKAM, which no one had yet read! Why the throwback approach?

HarperCollins very shrewdly realized that it had an opportunity of huge proportions, which could be optimized by understanding the audience and delivering what they would want.

  • A brand, named Harper Lee, with enormous equity from over 50 years of visibility
  • A built-in audience of several generations who first enjoyed ‘To Kill A Mockingbird’ in book form
  • A heavily covered back-story concerning the surprise discovery of the secret manuscript and inquiry into the mental state of the author
Watchman at Costco

Display Shipper at Costco

As of now, the book has already been reprinted several times and is the fastest-selling book in HarperCollins history – remarkable in this digital-centric era.   The fact that ‘Go Set A Watchman’ has gotten generally mediocre reviews is almost beside the point.

HarperCollins scored a big success by understanding the audience, the environment, and having the courage to act accordingly and decisively.

Diet Pepsi drops aspartame: Gilding the Lily?

PepsiCo just announced that it will be taking the artificial sweetener aspartame out of Diet Pepsi and replacing with another artificial sweetener, sucralose (known more commonly as Splenda®), combined with another sweetener named acesulfame-K (‘Ace-K’), which is a lower cost ’sweetener helper’.

apm-free D Pepsi

The stated reason is to respond to consumer objection to aspartame, as stated by a Pepsi Sr. VP: “Aspartame is the number one reason consumers are dropping diet soda.”

The more likely reason is that Diet Pepsi volume is down over 5% in the last year, part of a long-term slide, and nothing so far has worked to reverse the trend.

But this change is unlikely to make a material difference, for a few key reasons.

First, let me risk public embarrassment to try to establish my bona fides.  I marketed aspartame (Equal® Sweetener) for 6 years, and sucralose (Splenda) for another 5.  Did a lot of consumer research during those years.

DavesSweetenerBonaFides

Left: failing the dorky marketer test. Right: at a trade show, excitedly pitching sweeteners

Here’s why I don’t think this will make a difference:

1) Consumers generally don’t know what’s in their diet soda to begin with.  When asked open-endedly about ingredients in diet sodas, they have a vague notion that they contain artificial sweeteners, but the sweetener is not often mentioned by name.  When prompted, they will recognize aspartame.  But while consumers may theatrically claim that they avoid aspartame when they’re in a focus group, in reality very few actually check labels.

2) Consumers are generally full of it when it comes to stated preferences.  They will tell you all day long that they want less fat, less sugar, less salt, etc – – but in reality they will rarely change ingrained habits if there’s even the slightest risk of compromise (such as taste or cost).

3) Non-users or lapsed users have a handy reason for why they don’t use the product.  Aspartame has enough negative PR that it is an easy, politically correct and inarguable reason as to why surveyed consumers aren’t using the product.  But the true answer is a more complicated mix of dynamics including macro consumption trends, emergence of new alternatives, and changing demographics (‘modern’ diet sodas were first introduced, and gained loyal followings, in the early 1980s).

4) Changing out one artificial sweetener for another just reminds consumers that diet sodas generally contain artificial sweeteners.  Not a great plan to bring in new users. 

5) Changing ingredients to meet claimed consumer preferences is no guarantee of success.  3 years ago ConAgra changed its Hunt’s ketchup back to High Fructose Corn Sugar after a 2-year switch to sugar, ostensibly to answer consumer objections to HFCS.  Sales volumes showed that consumers didn’t really care.

Hunts No HFCS

6) Most importantly, consumers like their products the way they are.  ANY CHANGE in a loyal user’s product formulation will arouse suspicion.  A product as iconic as Diet Pepsi owes its unique taste to the specific combination of sweeteners in its formula.  It is impossible to improve the taste of Diet Pepsi, because its ideal is defined by its current taste.  So any change will alienate current users, who are currently drinking it even knowing in the back of their minds that it contains an artificial sweetener.

Ironically, this is the same category where New Coke infamously demonstrated what happens when you change the formulation of a well-loved product.  It will be interesting to see whether this ‘New Diet Pepsi’ fares any better.

Below is an introductory spot for New Coke in 1985.  In retrospect, a product and spokesperson that ultimately followed similar paths, albeit on different timing.

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.

We Tested it On You, So It’s Probably OK for Your Pet

I had the pleasure of attending a brand new trade show – Petfood 2.0 – in Chicago recently.

Petfood2.0logo

Not surprisingly, this show is still getting its furry legs under it – – a very manageable group of 35 disparate exhibitors made for a quick and interesting, if not yet cohesive, experience.

Overall, though, a larger theme presented itself:
Following thousands of years of dogs serving man, the tables have turned.
Man now serves dog.

Exhibit 1:  Hemp for Pets.

Now available from our friends at HempMeds, is a line of products made from hemp to benefit your pets.  aNew™ Pet Nutrition‘s products provide essential fatty acids (EFA – – Omega-3 and -6) and are made from a blend of hemp seed oil and raw hemp stalk oil (which is rich in cannabidiol – CBD).  EFAs, as we know, are highly beneficial – – just don’t ask the industry to agree on what the top benefits are.

pet_oil250

This innovation in pet health could not have been possible without the committed testing of hemp products by millions of Americans in the 1960s and 1970s.  So while the outcome of all that testing is up for discussion, your cat or dog is possibly benefiting now from what you did in college then.

OK, that’s not accurate.

While hemp is illegal to grow in the US, it is perfectly legal to import any part of the hemp plant in all 50 states.
And while the prospect of Fifi or Rover lying on his or her back contemplating the ceiling tiles for hours on end and giggling is intriguing, these products contain virtually no THC – the active ingredient that makes marijuana psychoactive.

Although it would be interesting to see if Nigel would behave any differently with the munchies.  Doubtful.

Hempmeds

Exhibit 2:   Functional ingredients for pets – – it worked on Man, so it’s probably safe for Rover.

We long ago realized that we could do better than feeding our pets Ol’ Roy (WalMart).  Thus emerged added value feed (e.g. Iams, Eukanuba, Science Diet, etc), offering different formulas for large breeds, older pets, etc. as well as some medical needs.

Meanwhile, human foods and beverages have increasingly been stuffed with a dizzying array of functional ingredients, many of which have no empirical basis in efficacy.  But we humans have shown that we’re willing to buy them anyway.  What did Charles Revson say about hope?

Based on this massively-scaled test market on mankind, it apparently has been deemed that animal-kind is now ready to safely ingest all sorts of functional ingredients that may or may not actually ever benefit them.

Petfood2.0

Incorporating things like ancient grains, fiber, medium-chain triglycerides, probiotics and ionic trace minerals, your pet can now get benefits heretofore only considered for the human species (notwithstanding hairballs and a healthy coat).

One company, PetNaturals of Vermont, offers products to address the following areas:
– Agility, Antioxidant, Bladder Support, Breath, Calming, Daily Multivitamin, Digestion, Hip & Joint, Immunity, Slim-down, Urine pH balance (really – to avoid yellow spots on the lawn), Periodontal health, Fecal function, and Skin/Coat health.

You dog and cat owners will probably recognize some of the benefit areas in the products below.

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We live in a world where the things we eat promise magical powers to fix whatever marketers insist needs fixing.  And regardless of the effectiveness, manufacturers have made a tidy business catering to hope.

Now, due to the significant sacrifice, expense and effort expended in testing on humans, our pets will soon be able to have their diets enhanced, and your wallet may end up just a little lighter.  So when your pet looks up as if to say ‘Thanks, Man’, now you know what’s going through that little brain.

I have no doubt that many of these ingredients can provide real benefits to some of the 150 million dogs and cats out there.

Except I’m not believing anything that promises intelligence to an Irish Setter.

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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.

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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.

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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                  —