Brand Autopsy

The Wal-Mart and DELL Relationship

This leaked Wal-Mart Brand Positioning document has given me new insights into DELL’s decision to sell desktops in Wal-Mart.

As we know, DELL prides itself on forging direct relationships with customers be it directly over the phone or directly over the Internet. A by-product of this direct relationship is people are able to get quality customer service to help them make the best decision possible in buying a computer that costs less because the middle-man retailer has been cut out of the equation. (And yes, DELL has had/is having its own struggles in delivering quality customer service.)

We all know Wal-Mart isn’t known for its customer service and the leaked brand positioning analysis highlights this challenge. Wal-Mart struggles to offer excellent customer service from its store associates when selling complicated, higher-dollar electronics. As noted in the report, “People don’t go to Wal-Mart to shop, the go to Wal-Mart to buy things as quickly as possible.”

The report goes on to say that Wal-Mart shoppers believe Best Buy is a smarter choice when it comes to buying higher-dollar electronics like HDTVs and computers because Best Buy employees are able to provide shoppers with product knowledge to help them make a more informed buying decision.

Here’s what this relationship between Wal-Mart and DELL really boils down to … Wal-Mart is an “OR” company and DELL is an “AND” company.

When given the choice between offering low prices OR high-customer service, Wal-Mart has chosen to offer low prices. On the other hand, DELL has always answered this question differently. DELL has purposely chosen to offer low prices AND offer high-customer service through its direct relationship model.

Because Wal-Mart is an “OR” company and DELL is an “AND” company, I question the strategic viability of this relationship. Maybe a partnership with a like-minded "AND" retailer such as Best Buy, CompUSA, or Fry's would be a better strategic fit for DELL.

NOTE: I evoked Jim Collins' "Tyranny of the OR" and "Genius of the AND" thinking into this post.

Fascinating Wal-Mart Brand Analysis

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Today’s NY Times shares fascinating insights into the Wal-Mart brand from a leaked brand analysis report. (Access the article from the nytimes.com site or from here.)

The report was conducted by Wal-Mart’s then agency-of-record, GSD&M, and according to the NY Times, this report, "... offers a rare glimpse of the concerns that are buffeting Wal-Mart’s retailing empire, from its flagging corporate reputation to the ‘near catastrophic’ economic pressures faced by its working class consumers.”

For example, this report shares insights that Wal-Mart shoppers know other retailers offer smarter choices in a variety of revenue-important product categories. The report outlines the following …

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Smart and illuminating fodder for all us marketers. I was surprised to find a copy of this GSD&M prepared Positioning Report for Wal-Mart (pdf) available on the NY Times website. Go upload and get the download on branding insights into the world’s largest retailer.

Expect to read more from me in the days to come after I've had a chance to fully digest this Wal-Mart Positioning Report. And if you have thoughts ... chime in with comments.

Whole Lotta Whole Foods Happenings

Last time we chatted about Whole Foods Market, they had just announced their acquisition of Wild Oats. I followed-up that announcement with some opinionated implications sure to result from acquiring their largest competitor.

There have been a few notable happenings since then, such as …

On June 6th, Whole Foods Market will open their first branded location in London. A few years ago Whole Foods purchased the London-based Fresh & Wild grocery chain, but this marks the opening of the first Whole Foods Market branded location. And as with their recent openings in the States, this London location at the Barkers Building on Kensington High Street will be MEGA-SIZED. Its three stories tall, spanning 80,000 square feet, and Whole Foods is spending about $7.0 million-dollars in fiscal ’07 to bring this London location to life. London has seen nothing like this from a grocery store.

Lily Rockwell of the Austin American-Statesman shares more insights on the Whole Foods “London Invasion”. You can also learn more about the Kensington Whole Foods London location from this online magazine (PDF) published by Whole Foods.

That’s the good news. The bad news is … WFMI stock has been languishing for months now. Q2 financials acerbated the situation further by disappointing the Wall Street types. Plus, the Federal Trade Commission has delayed, for the third time, its approval of the Whole Foods/Wild Oats merger. Not sure what to make of this. Obviously, there is some hiccup in the approval process as someone at the FTC may feel this merger creates an anticompetitive retail atmosphere. (Hmm…)

On a different bent … Whole Foods Market began podcasting last year and now they are video blogging. SECRET INGREDIENT is the name of their vlog and it’s a well-produced show worthy of your viewing. Learn more about the “secret ingredient” of Prosciutto by viewing this…

RSS Readers … click here to view the Prosciutto video.

Balloon Payments

Jay Ehret, small business marketing specialist in Waco, TX, shares a story about a car dealership that spends $3,000 a month on flying balloons but refuses to spend $1,200 a month to send a newsletter to existing customers. >> READ MORE

Bryant Simon on Starbucks

Who:
Bryant Simon, Professor of History and Director of the American Studies Program at Temple University

What:
an 18-minute lecture on the cultural ethos of Starbucks

Why:
It’s an intoxicatingly brilliant and thoughtful look at the cultural ethos of Starbucks from a history professor who has spent far too much time deconstructing Starbucks. I am eagerly anticipating Bryant’s forthcoming book, CONSUMING STARBUCKS.

Watch:

RSS readers … click here to watch the video.

Recently Uploaded Glenna Moore videos

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*** Non-Marketing Related Post ***

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Many of you will remember that my Mother is living with ALS. The disease continues to creep along and when I tell others about how my Mom is doing I usually say something like, “Everything with my Mom is bad, but good.”

Bad in that she has greater difficulty breathing and eating. Bad also in that her ability to talk has been reduced to garbled utterances. Good in that she has an experienced caretaker who helps her during the day. And good in that her Bridge-playing and Dominoes-playing friends visit every week. Also good in that ALS has yet to rob my Mother of her abilities to work Crossword and Sudoku puzzles.

Recently, I’ve uploaded two new mini-documentaries telling some great stories of my Mother’s life. If you have some time this Memorial Day weekend, consider learning more about the remarkable life Glenna Keith Coffey Moore has lived through these two videos.

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As they finished dinner recently, my parents started reminiscing about their first dates. Luckily, I had my video camera nearby and was able to capture some precious stories and heartfelt footage.

Al and Glenna have been married for nearly 45 years and to hear the unbridled joy in my Dad’s voice thrills me. He truly found the greatest love of all. Enjoy.

Direct link to the video on Google

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Glenna’s mother, Margaretta, was active in keeping scrapbooks throughout her life. Luckily, many of Margaretta’s scrapbooks have survived the years and are still in good enough condition to flip through the pages.

Before ALS progressed with my mother, she shared stories about the people and the photos from a scrapbook her Mom crafted for her when she was a young child.

The following video documentary shares amusing childhood stories from my Mom’s remarkable life. Enjoy.

Direct link to the video on Google

[NOTE: The audio for this documentary was recorded in August of 2006.]

Chris Anderson on Genuineness

In the preceding post, I raved about Deliver Magazine. Also included in the May issue (PDF link) was an interview with Chris Anderson, Long Tail raconteur and editor-in-chief at WIRED Magazine.

Chris shared smart words on what it means to be GENUINE in today’s marketing world where what gets measured gets manufactured. Good stuff ...

“Genuine is an e-mail from a person rather than a company. If the lead singer of some band that I like sends out an e-mail to those of us who have registered our interest, that’s authentic in a way that a record label sending out an e-mail wouldn’t be. If the lead singer responds to his e-mail, that’s even better. A MySpace page is more authentic than a billboard. A blog is more authentic than a press release. It’s all about having a human voice and re-personalizing the connections.”

“The key is in catalyzing word of mouth. If consumers don’t trust institutions and do trust individuals, if they don’t want to be marketed at and do want to be influenced by their peers, how can marketers influence those influencers, those alpha peers? Some companies have done lots of experiments in this. There are fake blogs and fake viral videos and fake buzz marketing. It sometimes works, but if you’re busted, it turns into a PR nightmare.” -- quotes from Chris Anderson

SOURCE: Deliver Magazine | May 2007 | PDF link

Deliver Delivers

Deliver Magazine mysteriously appeared in my mailbox the other day. It’s billed as “a magazine for marketers” and since I’m a marketer … I reckon it is fitting for me to receive Deliver.

I'll generally riffle through a business magazine that looks halfway interesting. Most times, these magazines end up in a round file cabinet. Deliver magazine didn’t. As I riffled through the pages I found well-written and well-designed articles on the world of customized direct marketing. Have a look for yourself ... download the May issue as a PDF file.

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And while you peruse the magazine online, read about the super-cool direct mail campaign which personalized latte art to include the recipient's name spelled out in the foam (pg. 8). Also read about how Stacy Pita Chips looking to make a name for itself by mailing out packages of product samples to 133,000 women named Stacy (pg. 25).

Oh yeah … this enjoyable and informative marketing magazine is from the United States Postal Service. (Whoa! That's unexpected.)

Twittering Daily Specials

Twitter is still new on the scene and it has us marketers scrambling to find ways to effectively use it as a marketing medium.

(For those unaware, Twitter is being defined as “micro-blogging service” where users can quickly update people as to what they are doing. Brevity, connectivity, and immediacy are key to Twitter as users can post text-based messages up to 140 characters long yet reach a wide swath of people using the service with their laptops, PDAs, cell phones, etc.)

The best use of Twitter I’ve seen as a marketing medium comes from Panaros, a Buffalo, NY restaurant. Panaros twitters its daily specials. Brilliant.

*** Kudos to the Brand Flakes for Breakfast blog for the hook-up.

Business Book Liposuction

This summer, Orion Books will publish condensed versions of literary classics including “Moby Dick,” “David Copperfield,” “Anna Karenina,” and "Vanity Fair." The series publisher, Malcolm Edwards, contends that “… many readers think of the classics as long, slow, and ... boring” and therefore, some of these books will be shortened by as much as 40%.

Literary purists aren’t too pleased that these classics are being given the literary liposuction treatment with the editing out of sub-plots and intricacies. While others are pleased that they will now be able to find the time needed to read lengthy classics without succumbing to riffling through a Cliff’s Notes version.

Hmm ... why stop at literary classics? Why not also include business books in the mix? After all, many worthwhile business books suffer from being too long and too unfocused that a little liposuction would be helpful. Much of Peter Drucker’s classic writings have been condensed and reconstituted in a variety of re-issues. Some of Tom Peters’ back catalog (pre-1996 especially) is sure to benefit from being re-issued in compact edition form. (Not sure a compact edition of THE STRATEGY PARADOX would work though.)

(NOTE: Executive Summaries does a nice job of condensing the key themes of business books into handy 8-page pamphlets. However, those summaries are almost too topline to make a meaningful difference in a businessperson’s world.)

My short list of classic business books I’d like to see in a trimmed-down version include: " In Search of Excellence," "The Rise and Fall of the Creative Class," and "Building Strong Brands."

What about you? Which business books would you want to read in trimmed-down version form?

Ad Agency Hires Ad Agency

According to Ad Age, Campbell-Mithun, a Minneapolis-based advertising agency that’s been around since the 1930s, recently hired another ad agency to solve its branding/positioning issues. (Yep, you read that right. Read on for more.)

Unable to define or articulate why Campbell-Mithun is indispensable and how they go about helping improve the branding/marketing efforts of their clients, Campell-Mithun hired Cue, a Minneapolis-based ad agency, to solve for these communication issues.

The end result was the creation of a branding ethos for Campbell-Mithun. This branding ethos consists of seven tenets derived from quotes spoken by Ray Mithun, the agency’s founder. Murals were created and posted inside the Campbell-Mithun offices with the artwork depicting these seven tenets. Plus, these seven tenets are also featured in Cambell-Mithun’s capabilities marketing materials.

I applaud Campbell-Mithun for having the courage to admit they lack the capabilities to define and design branding work for themselves. But that admission could (and should) scare off current and potential clients. Would you want to trust your company’s branding efforts to an ad agency that can’t solve its own branding issues?

The Strategy Paradox … say what?

I wanted to enjoy Michael Raynor’s THE STRATEGY PARADOX … but didn’t. Raynor is at the forefront of strategic business thought as a Distinguished Fellow with Deloitte Research and having co-written the classic book, THE INNOVATOR’S SOLUTION. He has lots of smart stuff to share. Unfortunately, Michael Raynor’s book is chock-full of too much business speak gobbly-gook for this marketer to comprehend.

After reading page 16, I gave up. I couldn’t understand the basic principles behind the book because Raynor’s reliance on using business speak gobbly-gook hindered my understanding.

I’ve read the following paragraph multiple times and still struggle to understand what Raynor is trying to communicate. This paragraph is supposed to serve as the summary for the book. However, it serves better as a prime example for how Raynor hinders understanding. Read for yourself and try to make sense of Raynor’s business speak gobbly-gook.

“The strategy paradox arises from the need to commit in the face of unavoidable uncertainty. The solution to the paradox is to separate the management of commitments from the management of uncertainty. Since uncertainty increases with the time horizon under consideration, the basis for allocation of decision making is the time horizon for which different levels of the hierarchy are responsible: the corporate office, responsible for the longest time horizon, must focus on managing uncertainty, while operating managers must focus on delivering on commitments. This is the principle of Requisite Uncertainty. A critically important tool in applying Requisite Uncertainty is Strategic Flexibility, a framework for identifying uncertainties and developing the options needed to mitigate risk or exploit opportunity.”[pg. 16, THE STRATEGY PARADOX]

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Huh? What was that all about?

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Well … as a public service project, I’ve spent time translating Raynor’s business speak hieroglyphics into everyday words. Some particulars might have been lost in translation so feel free to improve upon my translation in the comments section.

Businesses must make decisions today despite not knowing what the future will bring tomorrow. The business solution to this today/tomorrow paradox involves separating out the need to better understand year-over-year future uncertainties from the need to handle the day-to-day business activities.

Businesses can better anticipate and act upon uncertainty by having “strategic-thinking” employees focused on the future and by having “tactical-doing” employees dedicated to managing the business on a day-to-day basis.

The process of overcoming the today/tomorrow paradox involves having “strategic-thinking” employees creating multiple scenarios of what the future may bring. From there, detailed menus of next-step options should be developed and when one of the future scenarios becomes reality, “tactical-doing” employees should act upon the appropriate next-step menu option.

Starbucks TV News Story

(Click above to watch)

Sue Kwon of KPIX-TV in San Francisco recently did a story on the influential power of Starbucks as a retailer of products beyond coffee like books, music, and other stuff. Sue included me as a talking head in the piece. If interested, watch the segment by clicking here or by clicking the image above.

And rumor has it the Biography Channel is finishing up a documentary tracing the history and the impact of Starbucks Coffee. I’ll share more when the airdate becomes known.

Big Boxes Becoming Smaller Boxes

The Wall Street Journal ran an interesting article yesterday on reasons why big box retailers like Best Buy, Circuit City, Home Depot, and Office Max are opening smaller locations.

In particular, new Best Buy and Circuit City locations are 30% to 40% smaller in size from the stores they opened a decade ago. The majority of Best Buy locations are 45,000 sq. ft. but new locations are no more than 30,000 sq. ft. And new Circuit City locations will be 20,000 sq. ft., down from their past average of 34,000 sq. ft.

“With more consumers buying entertainment online, Circuit City stocks 30% fewer CDs and DVDs at its smaller stores than in larger ones, primarily by keeping fewer of each title on hand. Meanwhile, televisions require less storage space now that prices are plummeting on flat-panel TVs. Likewise, laptop computers have increasingly displaced larger desktop machines. "Frankly, in most of our categories...the devices are getting smaller," Circuit City Chief Executive Officer Phil Schoonover said on an April 4 conference call with investors.” [source]

The article also mentions how big box retailers “… now need smaller structures to penetrate fast-growing suburbs, rural areas and gaps between their larger stores -- places that can't support one of their superstores.”

Hmm … can’t help but revisit the RadioShack situation. What if Best Buy or Fry’s Electronics were to wrestle control of RadioShack locations? I wonder what they would do with 2,000 sq. ft. of selling space? Could they make better use of RadioShack’s locations? Could they make RadioShack relevant again?

Subway Pizza. Yum or Dumb?

Photos from "Slice" off flickr.com

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In 2005, Subway began using speed ovens to toast sandwiches. In June of 2007, Subway is set to use those speed ovens to flash-bake deep dish personal pizzas in 13,000 U.S. locations. Stores will use pre-baked pizzas and customers will be able to top their pizza with any of Subway’s sandwich ingredients.

I know what you are thinking … what’s a sandwich shop doing baking personal pizzas? You are also thinking … doesn’t Subway position itself as healthy fast food? Lots of questions.

But Subway has been answering these questions by field testing the personal pizza concept in select markets. It must have passed store-level operational feasibility tests and sales tests for Subway to roll-out pizzas nationwide. According to Brandweek, one of the NYC test stores sells about 25 personal pizzas a day.

Hmm…

I’m not sold on Subway doing pizzas—smacks of being all things to all people to me. But I’m not opposed to Subway doing pizzas.

It would feel less like a desperate and unfocused marketing ploy if they used their fresh-baked breads instead of using pizza dough. (Think Stouffer’s French Bread Pizza.) Subway could remain truer to its core sandwich roots if it used its bread to bake pizzas. Not sure about the myriad operational and product implications though. On paper, this sounds like a smarter idea than to use pizza dough.

Reckon we’ll have to see if Subway doing deep dish style pizza is yum or dumb. (My money is on “dumb.”)

ReFocusing RadioShack

With all the recent RadioShack chatter here (and here), Kevin from Mine the Data blog wants to know what I advocate RadioShack doing to remain relevant. Let’s begin answering this by pointing out something Adelino said in the comments, “Cost cutting is not a sustainable strategy for growth.” Well said Adelino.

At some point, RadioShack needs to focus on its strengths and not its weaknesses to grow sales. RadioShack should stop trying to sell Plasma TVs and start focusing more efforts on being the “eclectic electric hardware store.” Their strengths are being known for selling most any electrical do-hickey needed to make something work.

I advocate RadioShack refocusing its efforts to become a convenience store version of Fry’s Electronics. They should sell only the most-popular, most-obscure, and most-needed electrical gadgets/gear to make our stuff work.

Would you buy a Plasma TV at RadioShack? Would you buy a Cell Phone package at RadioShack? I wouldn’t. I would buy those somewhere else like Costco for the TV and the Sprint store for the cell phone.

However, I would buy USB 2.0 cords, blank DVDs, replacement power cords for my Laptop and Digital Video Camera, etc. at RadioShack. Not sexy stuff but stuff we consumers need in order to make our gadgets work today.

In a way, this strategy of focusing on being a convenience store version of Fry’s is like going back to the future for RadioShack. Will this strategy drive mondo sales? Maybe not mondo … but it is sure to drive consistent sales and make RadioShack relevant again.

That's my quick take ... what's yours????

Austin Business Bloggers | May 7

On the first Monday of every month a gathering of Austin Business Bloggers takes place. We start gathering at Guero’s Taco Bar around 5:30 pm and at 5:45 we get seated. From there, chit-chat happens.

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The next gathering of Austin Business Bloggers happens on Monday, May 7.

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So ... come for the grub and grog but stay for the gab at Monday’s Austin Business Blogger’s meeting.

PARTICULARS:
WHAT: Gathering of Austin-area businesspeople hip to blogging
WHEN: Monday, May 7
TIME: meet at 5:30 pm (in the foyer bar area)
WHERE: Guero’s Taco Bar (1412 South Congress [map])

Three Reads | May 4

ONE | Do Business Books Work?
Would you go see a doctor who hasn’t read the latest industry articles? Probably not. Now flip that question to ask if you’d trust the marketing of your business to a marketer who hasn’t read the latest marketing articles. (Hmm …) That’s just one intriguing point in Seth Godin’s recent post about the importance of us business folk reading business books and business blogs on a regular basis.

TWO | The Marketer’s Guide to Personal Finance
Another smart posting from Seth Godin … this time he’s riffing on bootstrapping and get-up-and-go-ism.

THREE | Marketing Time
A Seth Godin Trifecta. Read Seth’s take on how the story of ‘time’ is an important marketing trigger.

What’s Next for Zingerman’s Deli?

I’ve never been fortunate enough to experience Zingerman’s Delicatessen in Ann Arbor, MI. (Read a lot about this company to know I admire it though. It’s a classic small company that acts big.)

Zingerman’s purposely decided not to franchise its renowned deli restaurant and take it from being local to being global. Instead, Zingerman’s decided to grow itself by adding additional stand-alone businesses like a coffee company, a barbeque restaurant, a bakery, and a customer service training company.

Zingerman’s is now turning 25 years old and at yet another crossroads in its existence. Zingerman’s first crossroads came fifteen years ago when it began asking the difficult question of what it wanted to be when it grew up. Well … with $30-million dollars in sales and its operation of eight distinct businesses, Zingerman’s is all grown up now. So now, Zingerman’s is again asking questions about what it wants to be when it grows up yet again.

Learn more about what’s next for Zingerman’s from this worthwhile New York Times aticle (May 3, 2007). And, re-learn the story about how Zingerman’s first answered the question of what it wanted to be when it grew up from this vintage Inc. Magazine article (January 2003).

RadioShack: Profits Up, Sales Down

We’ve read the satirical take on RadioShack. Now let’s read about the actual take on RadioShack. The company released its Q1’07 financials yesterday and reported:

• Net sales fell 14.5% as same-store sales struggled, falling 9.2% due to "the highly promotional nature of our business in the first quarter last year."

• Profitability jumped as new management focused on cost-cutting and better inventory management to stem the sales slide.

• Because of increased financial discipline, RadioShack was also able to increase cash on hand, reduce debt, buy back shares, and improve cash flow.

SOURCE: Motley Fool article.

Scott Ginsberg's Newest Book

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