Brand Autopsy

Has Commoditization Infected Politics?

Over on the FC Now blog there is a conversation on the flame-out of the Howard Dean campaign. That thread sparked a few thoughts within me about politics, marketing/branding and consumer adoption.

It would appear that Dean’s message and methods did not cross the chasm. Clearly, Dean ignited the passions of the innovators and began making inroads to the early adopters, but that is where his campaign stalled. In fact, it could be argued that his campaign stalled as it tried to move past the innovators to the early adopters.

It’s a shame that the politicians who survive the political battlefield of primaries and caucuses are those that are the least polarizing.

The brand called Dean is one that is passionate, seemingly authentic, and is able to connect with “consumers” on a one-to-one level. All attributes that a brand would love to own in the consumer marketplace. So, why doesn’t this branding approach work in the political marketplace? It seems as though politicians that have a distinct personality are too polarizing for the masses. Being too different and too unique in the political marketplace can be damaging if you want to cross the chasm to reach the masses.

Has commoditization infected politics? Are we supporting parity in political candidates? Because it seems as though when all is said and done and all the ballots have been counted, we choose the candidate that is least polarizing. Again I ask, has commoditization infected politics?

This perspective is coming from a registered Libertarian. In case you're interested, being a Libertarian doesn’t mean that I'm a kook, it just means that I believe steadfastly in four words – maximum freedom/minimum government.

A Glitch in The Pitch

I must receive at least 10 pitch letters/packages a week from advertising agencies extolling why they are the best agency in the land and that we should work with them to develop marketing campaigns that get results.

One such pitch letter intrigued me -- not because it was remarkable, but because it was so unremarkable.

This particular pitch letter was 100% cookie-cutter. Nothing in the letter was customized to appeal to me. No mention of key issues that my company faces. No mention of the challenges facing us in the age of parity and commoditization. (Note to ad agencies … sending out “cookie-cutter come-ons” is not going to get my attention.)

In unremarkably remarkable fashion, the pitch began this way:

John, over the past several months I¹ve sent you a number of things in the mail hoping to stimulate a conversation about my company, and our approach to marketing.

Let’s stop right there. If this agency can’t capture my attention (which after sending me numerous pitch packages, they obviously haven't), then how will they capture the attention of our customers?

Seriously. Here is a marketing message crafted by an advertising agency that failed to connect with me and yet, they think they can craft marketing messages that will connect with our customers. Hmm ... that's the glitch in the pitch.

The Inauthenticity of Authenticity

“… there is no such thing as authenticity, only varying degrees of inauthenticity. The traditional Irish bar is assembled from mass produced, cod-Celtic kitsch. The free range chickens are free to range around a fetid factory farm. The classic blue jeans are pre-shrunk, pre-faded, pre-ripped, pre-grimed, and doubtlessly, pre-impregnated with pre-washday adolescent aromas. Authentic authenticity, so to speak, is unattainable. But it can be staged, it can be created, it can be evoked.”

So, if real authenticity doesn't exist ... what is a marketer to do?

“… play it absolutely straight. This product is good, buy it. Nine out of ten cats prefer it. Use our shampoo for silky, shiny hair. A painkiller that kills headaches. Fast. The finest food in town. Here. Delivery in 15 minutes. Guaranteed. Cures hemorrhoids, or your money back (as if you’d ask for a refund … as if they’d check if you did.)”

“The fiendish genius of this apparent straight talking is that it works in two ways. On the one hand, good old fashioned sales pitches work as good old-fashioned sales pitches. This detergent washes whiter. That car is the best value for the money. The other computer has more bells and whistles, but our after-sales service is superior. On the other hand, ostensible authenticity has an air of imputed irony. That is to say, sophisticated, marketing-savvy consumers will surmise that traditional this-product-is-good sale pitches are tongue-in cheek, private jokes between them and the advertising agency. Straightforward sales pitches flatter their intelligence by imitating that - unlike unsophisticated consumers – they can see through the unsophisticated sales pitch and detect the sophistication behind the unsophistication. The key is to play it dead straight.”

Welcome to the world of Stephen Brown, a contrarian’s contrarian marketer. The above excerpt can be found in his latest, and most mainstream book yet, Free Gift Inside: Forget the Customer. Develop Markettease.

Expect to read more from Stephen Brown on Brand Autopsy in the days and months to come. While his style is verbose and acerbic, he will challenge your marketing mindset as most marketing gadflys do. Dig?

Wendy’s Obesity Problem

Paul, my fellow brand coroner, posted a list of fast food and casual restaurants that have jumped on the DC (dietary correct) bandwagon. I was especially intrigued with Wendy’s and their low-fat marketing strategy given that low-carb is so today and low-fat is so yesterday.

The “Wendy’s 05 in ‘04” marketing campaign promotes their value offering of a “hot, plain baked potato, delicious small chili, and a fresh side salad with fat-free dressing.” Each costing 99 cents and when combined, these three Super Value Menu offerings have a total of 5 grams of fat. Doesn’t this marketing strategy feel 10 years too late?

Or have Wendy’s marketers decided to zig with low-fat messaging since every other food establishment has decided to zag by going the low-carb route?

If that wasn’t interesting enough, there is more. The following “05 in ‘04” print ad is currently running on the back page of Cooking Light magazine.

Wouldn’t you love to be the Wendy’s marketing manager with a bloated advertising budget that they can easily plop down $90K for a back cover page ad in a magazine that seems to be so off target? The Wendy’s potato/chili/salad ad seems so out of place in Cooking Light, a healthy gourmet lifestyle magazine. Sure, the media planner is trying to hit a reach/frequency number with the Cooking Light placement. But wouldn’t People magazine or Entertainment Weekly be a better lifestyle fit for the potato/chili/salad ad?

Or is it a case of the Wendy’s marketing manager having too high a BMI. Not body mass index -- bloated media index.

BANG! – Unfinished Business

for those that need a BIG BANG! refresher course ... click here.

It is not my intention to rip on the authors of BANG! , but I did not like the book. Not at all.

BANG! reads more like a marketing memoir from two advertising executives than it does a marketing book. When I invest my time reading a business book, I expect a positive return on my investment. I expect to generate new ideas that I can implement at work. This book provided me with a negative ROI -- no new ideas that I can implement at work. (Not good.)

Instead of offering solid advice on how to create, nuture, and implement great marketing ideas, BANG! offers readers a glimpse into the happenings of a happenin’ ad agency. The authors glamorize how so many of their best campaigns were created at the last minute -- sometimes minutes before a presentation to their client. Do you really want to trust your company’s marketing campaign to an advertising agency that boasts about continuously developing their best ideas at the last minute? I understand the spontaneity of creativity, but I do not understand bragging about how your BANG! worthy advertising campaigns are developed at the last minute.

The authors also wrote about how they trick clients that come to visit their offices by instructing their employees to look busy. On page 169 you will find this story:
“I (Linda Kaplan Thaler) want all the computers turned on – I don’t care if you are looking at your stock portfolios.” As I would walk the client from the foyer to my office, I’d say, “I’d love to introduce you to everyone, but we’re all so busy.” I’d have people crossing my path, and clusters of people would look up and say, “Oh, hi, can’t talk!” Then, when the client would leave, everyone would scurry back to work and the office would empty out again.”

My advice is to leave BANG! on the shelf and instead pick up Eating the Big Fish: How Challenger Brands can Compete with Brand Leaders written by Adam Morgan. I guarantee that reading Eating the Big Fish will generate a positive ROI as the book will help you develop ideas on how to better design marketing communications to compete in the crowded brandscape.

If you still want to read BANG! ... I’ll make it easy for you. The first person who emails me (see left-hand side bar), I will send you my copy of BANG! absolutely free. Yep … free. Just email me.

(Side note: my blog on the 2003 Marketing Books of Year Awards is still available on FC Now. )

From "PC" to "DC"

For years we have been trying to be politically correct (PC). Trying to use the right / current / proper 'label' for different groups.

Today we're scrambling to be dietically correct (DC). We're filled with angst trying to figure out which diet trend to subscribe to...

Is it Atkins? Low-Carb? South Beach? Low-Fat? Low Cal? Or should I talk to the gal with the bumper sticker...
[ I lost 40 pounds in a week, ask me how! ] Which is it?

It’s interesting to see quick service restaurants (QSR) scramble for a dietetically correct version of their offerings.

Blimpie - is introducing the BCC, the Blimpie Carb Counter and an assortment of low-carb menu combos

Burger King - is offering low-carb burgers in a bowl instead of a bun.

Chili's- (while not a QSR) is offering a choice of low-fat or low-carb items.

Hardee's - started offering a burger wrapped in lettuce in mid-December.

McDonald's - has brought back a little known program they had over 11 years ago called "What's On Your Plate" targeting school aged kids featuring a cartoon character Willie Munchright.

Subway - has been using nutrition and 'leaner' as a competitive advantage for years. They have introduced two wrap sandwiches that are endorsed by Atkins Nutritionals.

Taco Bell - has new "Fresco Style" menu items where the cheese and sauce is replaced by salsa - this saves you a few grams of fat and 20 to 30 or so calories.

Wendy’s - has been promoting their Chili, Side Salad and Baked Potato combo meal as being under 5 grams (fat) under 4 bucks. It’s an old school approach to losing weight these days as everyone else is going the low-carb route - which doesn’t allow baked potatoes. The ads even feature fuddy-duddy regular people dressed in vintage 70s sweats doing old school exercises (like an African-American struggling on an garage-sale worthy stationary bike and a slightly plump suburban woman in sweats going out for a run… a run to Wendy’s for the 5 grams under 4 bucks deal.

Ah, but there is hope... According the a recent Toronto Star article, there is a group of Amish in Ontario that despite eating fats, sugars and calories has very low obesity levels...

Proving that, while making fun of the Amish is not PC, having fun WITH them may help you be DC.

Few Big Bangs ... lots of "ain't no thangs"

Big Bang week rolls on at Brand Autopsy....

On Tuesday I listed four Big Bang advertising ideas that the authors of BANG! highlight in their book as as being marketing ideas that passed their Big Bang test. Paul Williams, fellow Brand Autopsy blogger, posted his take on the matter yesterday. Today, I post mine.

AFLAC - BIG BANG or small thing?
BIG BANG all the way.

The AFLAC Duck has "become an icon" and the AFLAC brand "exploded onto the marketplace virtually overnight."

The Kaplan Thaler Group (KTG) created a campaign that redefined AFLAC’s identity. Need evidence? Just go to www.aflac.com and see how much the Duck permeates the site. From the Duck Gear that you can buy to the AFLAC Duck screensaver you can download … the Duck is on every page! (Somewhere, Howard the Duck must be smiling.) This campaign has more than solved for AFLAC’s business problem of name recognition. No doubt about it -- this a benchmark BIG BANG advertising campaign.

How long can (should) AFLAC continue to play the Duck card? I fear not much longer. Just compare the first television spot Park Bench against their newest spot, Looney Tunes. What once was a focused and crystallized idea has degenerated into mayhem of messages.

Blimpie - BIG BANG or small thing?
No doubt - small thing.

This spot did not “expand exponentially in the culture” nor did this idea “become an icon.” And by no means did this spot create “an ever-expanding universe for a product” or “turn occasional Blimpie users into fierce Blimpie loyalists.” The advertisement feels like a bad Bazooka Joe cartoon. How could the Kaplan Thaler Group classify this spot as being Big Bang worthy? How?????

On the other hand, the Jared Subway spots did "expand exponentially in the culture" and Jared "became an icon." A classic Big Bang idea. (No wonder Blimpie was jealous!)

Heineken - BIG BANG or small thing?
Small, very small … a small thing of infinitesimal magnitude.

This idea was not “ever expanding” and did not have a “dramatic, immediate and irreversible impact.” Sure, the ad received fleeting publicity, but what Heineken problem was the agency trying to solve for? What business problem did this solve? How can a one-off idea be considered a BIG BANG? This idea never accrued to anything bigger than a chuckle amongst the Kaplan Thaler Group creative team during a Friday after-work pub crawl.

Herbal Essences - BIG BANG or small thing?
Small thing … oh yeah, small.

A solid advertising campaign that had positive branding impact for Clairol but the idea is not BIG BANG worthy. This idea did not have "a dramatic, immediate and irreversible impact." Nor did it "expand exponentially in the culture." No “icon was created” and no “disruption of normalcy took place to create a new universe.” The Totally Organic Experience campaign is good, but not great and certainly not close to being a Big Bang idea.

Big Bang or Small Thang II

Okay, I’ll bite… after viewing some of the commercials and reading the definition of what a Big Bang is here are MY thoughts.

I think one of the secrets of effective campaigns is that the average consumer may not realize or care that they are being pitched to. The execution is so compelling you let down their guard and let marketing tell it’s story.

AFLAC –The latest TV spot features an animated AFLAC duck along with a collection of Warner Brothers animated characters (Bugs Bunny, Daffy Duck, the Coyote, and Road Runner). (I’m so disappointed in Warner Brothers for loaning out their characters to co-star with the AFLAC duck. What in the name of so-called co-branded synergies is going on here?)

The AFLAC duck, while successful in repeatedly stating the AFLAC brand name, is a flash in the pan when compared to the enduring and culturally significant Warner Brothers characters. (Does Warner Brothers really need to associate with the AFLAC duck to make their animated stars relevant? Is this a case of Warner Brothers over-licensing their characters? From my vantage point, this commercial did Warner Brothers no favors.)

While the quacky sounding catch-phrase “AFLAC!” may be more in the minds of consumers I don’t see folks squawking this to each other in the halls at work or on the subway. It gets the name of the product out there, but not in the “expand exponentially in the culture” as outlined as a Big Bang criteria.

The AFLAC duck's quack is annoyingly catchy, but it does not instill confidence in the American Family Life Assurance Company or drive me to check out their offerings.

However, talking about it here has built awareness in my mind that they exist as an insurance company and the ads say to “ask about AFLAC at the workplace.”

AFLAC -> Big Bang duck? No. Kung Pao duck? Perhaps.

Blimpie – I haven’t seen this creative execution but the idea sounds off-base. I've always tried to follow the path of creating marketing messages that say 'who you are and never who you are not.' In this ad, Blimpie seems to be saying more of who they are not (Subway) than who they are.

Blimpie -> Small Thing.

Heineken – I’ll give them points for being in the right place at the right time. This ad makes you grin and think ‘how clever of them to be so timely.’ To me this was more of a flash in pan than a Big Bang.

Heineken -> Small Thang (with some extra fizz for taking advantage of a situation).

Clairol Herbal Essences – I tried this shampoo and it didn’t even make me blush. I’m not sure what the big deal is. Ah, but wait… is that the secret? Did I try it because the woman on TV found it so pleasurable? Actually, I liked the way it smelled. I admit that on the first or second viewing the TV spots had me looking twice thinking “what’s going on?” But some of the most recent executions where the woman is surrounded by build men escorting her around her oversized bathroom as if she were in a 50’s musical left me wondering what the true benefit of the product was.

Clairol Herbal Essences -> I guess they'd want this to be ranked the Big "O" vs Big Bang?

With all this said, I was able to comment on many of these brands with top of mind awareness of how they advertise. But, the most important measure is purchase. The ads haven’t driven me to purchase, but they do ‘stick out’ among the brandscape. So perhaps if a good friend mentioned the great taste of a Heineken or a co-worker mentions she uses AFLAC and ‘they’re great’ I may consider trial.

I still refuse to say the words “Can you hear me now?” I’m not going to cave.

BIG BANG or small thing?

Big Bang week continues at Brand Autopsy...

Below are four case study examples from BANG! that the authors celebrate as being a Big Bang. Refer back to the ten-point Big Bang criteria and judge for yourself whether or not these four examples are Big Bang worthy.

AFLAC
KTG was challenged to create an ad campaign for American Family Life Assurance Company (AFLAC) that would make AFLAC a household name. KTG ultimately created the “AFLAC Duck” campaign. Introduced in 2000, the “AFLAC Duck” campaign has spawned about 15 different television commercials. (Click here to view the commercials.)

BIG BANG or small thing?
(You make the call! Cast your vote by replying via the comment link at the end of this blog entry.)

Blimpie
KTG was approached by Blimpie in May of 2002 to create an advertising campaign. Blimpie was losing market share to Subway and according to the authors, “(Blimpie)… was just furious that Subway was so successful with these ads.” (pg. 94). (Blimpie was referring to “Jared” Subway ads.) KTG created a television spot that portrays a floor mop impersonating a woman telling her friend how she lost weight thanks to “the commercial where the guy loses weight by eating subs.” She (the mop) then reveals the real secret is that she doesn’t actually eat the sandwiches because they are made with pre-sliced meats. The spot closes with her (the mop) craving a Blimpie.

BIG BANG or small thing?
(You make the call! Cast your vote by replying via the comment link at the end of this blog entry.)

Heineken
Immediately following the announcement that a sheep (Dolly) had been cloned in 1997, Linda Kaplan Thaler (working for Wells, Rich, Greene) received a call from a Wall Street Journal reporter inquiring if she was planning on doing a cloning ad. The reporter went on to say that the first cloning ad she sees will receive coverage in the Journal. Linda replied back, “Well, your story is going to be about us.”

Linda had her team contact their client roster to see who was interested in doing a cloning ad. Heineken agreed so Linda and her creative team developed an ad at breakneck speed. The print ad developed was “an image of two Heineken red stars, side by side, with the tagline, ‘Which one’s the clone? Scary, isn’t it?” (pg. 60)

BIG BANG or small thing?
(You make the call! Cast your vote by replying via the comment link at the end of this blog entry.)

Clairol Herbal Essences
To say the Herbal Essences shampoo brand was a brand in decline in the early 1990s would be an understatement. Popular in the 70s, the Herbal Essence brand had been pushed aside by offerings from emerging natural and organic personal care boutique brands like the Body Shop. KTG was challenged to revive the Herbal Essences brand through advertising.

Instead of following the path paved by other shampoo brands in promoting benefits like shiny and silky hair, KTG went the direction of promoting the “experience” that using Herbal Essences shampoo gives consumers. Inspired by a scene from When Harry Met Sally … you know the one - where Meg Ryan fakes an orgasm in a diner and a woman at another table tells the waitress that she’ll “have what she’s having” … KTG created the “Totally Organic Experience” television spot that features a woman in a shower having a veritable orgasm while shampooing with Herbal Essences.

BIG BANG or small thing?
(You make the call! Cast your vote by replying via the comment link at the end of this blog entry.)

On Thursday, Brand Autopsy will weigh-in with our thoughts on which concepts are Big Bang worthy.

Big Bang Explained

Big Bang week begins at Brand Autopsy...

The authors of BANG!, Linda Kaplan Thaler and Robin Koval, run the Kaplan Thaler Group (KTG), an advertising agency based in New York City. Both have enjoyed a storied career in the advertising game having been involved with numerous well-known advertising campaigns. KTG's current client roster include AFLAC, Pilot Pen, Ruby Tuesday, Clairol, American Red Cross, Blimpie, and Gruner+Jahr Publishing.

Like most advertising/marketing agencies, KTG designs their communication strategies using their own uniquely developed system. This Big Bang theory is KTG's official business strategy to creating ideas.

In an interview, the authors explained KTG’s Big Bang theory this way: “It's a marketing idea that is wildly successful because it is disruptive and illogical. Big Bangs alter the landscape forever by introducing a way of thinking about a product or service that did not exist previously and that changes our entire pattern and attitudes about it.”

In the book, the authors outline a ten-point definition of what constitutes a Big Bang.

A Big Bang “...expands exponentially in the culture.” (pg. 4)

“A Big Bang is designed to help make a brand explode onto the marketplace virtually overnight.” (pg. 6)

“A Big Bang creates an ever-expanding universe for a product, and turns occasional users into fierce loyalists.” (pg. 6)

“A Big Bang disrupts. It is about ideas that are simply too outrageous, too different, too polarizing to go unnoticed.” (pg. 6)

“A Big Bang bucks conventional wisdom and stops people in their tracks.” (pg. 6)

“A Big Bang is illogical.” (breaking through conventional thought with illogical thought) (p. 8)

“A Big Bang has a dramatic, immediate and irreversible impact.” (pg. 11)

“A Big Bang can’t be ignored. Big Bangs are intense ideas. They are intentionally polarizing.” (pg. 13)

“A Big Bang becomes an icon.” (pg. 14)

“A Big Bang disrupts the norm and creates a new universe.” (pg. 214)

Our next blog entry, Big Bang or Small Thing?, will ask you if the Big Bang examples mentioned in the book are indeed Big Bangs or ... are they Small Things?

Big Bang Week at Brand Autopsy

Fast Company’s Reader’s Choice Book-of-the-Month for February is BANG! Getting Your Message Heard in a Noisy World. I had rifled through this book on the shelves at BookPeople before, but was not motivated to buy it. On Saturday I found myself with some free time so I decided to pick it up.

While reading this book I developed a slew of HMOs -- Hot Marketing Opinions. Throughout this week I will be expressing these HMOs and some posts will request blogger participation. (Hopefully you will be inspired to join the conversation.)

If you haven’t read the book yet… no worries. I will recap the major points in subsequent posts. However, if you are chomping at the bit to learn more about this Big Bang marketing theory, satiate those desires by perusing the Big Bang companion website.

Hair Brained Scheme

As a marketer, when watching TV, I often pay more attention to the WAY a product is being sold than WHAT is being sold. I know they are trying to appeal to some unknown need and that every single element has been carefully chosen to enhance the message and drive interest. So, it takes a lot to pique my interest in a product pitch.

JUST FOR MEN, the company that makes hair color for men, has created a product (that they're offering for free if you call or visit their website) which allows you to temporarily color your hair to see how would look if you were to use their product. It darkens your hair and takes out the gray - but washes out easily with a single shampooing.

"New Just For Men Try-Out rinse-out hair color sample. Comb It In. Check It Out. Rinse It Away. Finally, you can see how you'd look without gray with no guessing about the results. And no commitment." – from the JUST FOR MEN website

I applaud JUST FOR MEN for finding a creative solution to provide product trial without risk. I'm sure this has been a challenge for a while. I would have enjoyed being a part of those brainstorming sessions where they examined the challenge and developed their ultimate approach!

A rather simple, but innovative solution.

Book Review – GUTS! Companies that Blow the Doors off Business as Usual

This is the first in what will be an on-going series of business book review blogs.

Book: GUTS! Companies that Blow the Doors off Business as Usual
Authors: Kevin and Jackie Freiberg

GUTS! is a sequel to the Freiberg's first book, “NUTS! Southwest Airline’s Crazy recipe for Business and Personal Success” and unfortunately, GUTS! falls victim to the sequel syndrome that befalls many successful motion pictures – its not as good as the original. As I read this book I kept thinking that the authors simply picked up literary litter from the editing room floor of their first book. GUTS! relies far too much on regurgitating the Southwest Airlines story told in NUTS!.

The title of this book (GUTS! Companies that Blow the Doors off Business as Usual) is a misnomer. Inside the book, you find chapters like, “Gutsy Leaders that Blow the Doors off Business,” “Gutsy Leaders Make Business Heroic,” and “Gutsy Leaders Lead with Love.” Yet the title of the book is about companies and not leaders.

GUTS! is more a book about how by companies can achieve extraordinary results by creating a culture that is caring, employee-focused and fosters a spirit of ownership amongst employees. It is not about how leaders make gutsy decisions. Essentially, this is a case study book on companies whose leaders lead by practicing Servant Leadership principles and by infusing Servant Leadership principles into the culture of the company.

Primer on Servant Leadership
Servant Leadership eschews the classical definition of a leader as being a stand-alone hero. Instead, Servant Leadership asks leaders to focus on creating a shared vision for all employees, encouraging entrepreneurialism and creativity throughout all levels of an organization, fostering a spirit of interdependence, embracing humility and promoting a sense of shared fate. For furthering learning, start with the man who first introduced the term Servant Leadership – Robert Greenleaf.

While I found much of the book to read like an extended magazine article, I did find the guts of the book to come from two very rich chapters that are chock-full of great company culture-related ideas. One chapter details how companies like Semco, Quad/Graphics, Southwest Airlines, Planet Honda are creating a sense of ownership amongst employees. The other chapter that I found worthwhile details how companies such as GSD&M, USAA, SAS and USAA attract talented employees. Those two chapters alone are worth the investment of money to buy the book and of time to read the book.

The authors researched this book exhaustively but they failed to adequately list their sources. Many of the quotes from the leaders they profiled came from published articles but those quotes were not thoroughly credited. (Failing to credit sources in a business book bothers me to no end.)

I encourage you to read the reviews from others found on amazon.com because all the reader reviews give GUTS! five stars with nary a disparaging comment. On the other hand, I rate GUTS! as a two-and-a-half star read.

K Sera Sera

an open letter to Julian Day, Kmart CEO

Julian Day
Chief Executive Officer
Kmart Corporation
3199 West Big Beaver Road
Troy, MI 48084

January 6, 2003

Julian:

Congratulations on breaking out of bankruptcy and for recording a profit with your 3rd Quarter financial numbers and with your November/December Holiday sales. While your comparable store sales have fallen significantly, you have improved your gross margins and stemmed your losses.

But survival is not enough.

You must differentiate or die.

Focus entails sacrifice.

Wal-Mart stands for “low prices, everyday” and Target stands for “cheap chic” through their "expect more, pay less" positioning. But what does Kmart stands for?

I applaud you for choosing to strategically position Kmart to appeal to an urban, multicultural mix of Hispanic, African-American, and Asian shoppers. However, by attempting to appeal to a very broad, eclectic, and diverse customer base, you are violating the old marketing adage of “If you try to appeal to everyone, you ultimately appeal to no one.”

In the advertising campaign that you ran last fall, you featured Kmart’s exclusive brands (Martha Stewart, Joe Boxer, and Thalia Sodi) intermixed with urban imagery all underscored by a hip rhythm and blues interpretation of the popular tune “Right Here. Right Now.” Target also actively promotes their exclusive line of offerings from Michael Graves to Issac Mizrahi to Todd Oldham and to Mossimo. While Wal-Mart has a limited selection of exclusive brands that have resonance, their private label line dominates nearly every category it competes in. Are Kmart’s exclusive brands of Martha Stewart, Joe Boxer, and Thalia Sodi compelling enough to promote as Kmart’s point of difference?

I’ll cut to the chase here and offer you advice on how you can strategically focus Kmart to accomplish more than just survival and to differentiate the Kmart brand so that it will not die.

MAKE KMART THE BRAND OF CHOICE FOR HISPANIC CONSUMERS.
The Hispanic consumer has long been underserved. At about 40 million strong and nearly $600 billion in buying power, Hispanics represent the largest and fastest-growing minority group in the United States. Incredulously, there is no major retailer that solely focuses on serving the needs of the Hispanic consumer. Instead of trying to appeal three distinct and viable customer bases (Hispanics, African-Americans, and Asians), focus supremely on the Hispanic audience.

CREATE UNIQUE, MEANINGFUL, AND MEMORABLE ADVERTISING.
Your fall advertising campaign creative (especially the television spots) felt overly contrived because you showcased ultra-happy, super pretty, and ethnically diverse people shopping at Kmart. (No one is that happy shopping, even at Tiffany’s, Anthropologie, or Build-a-Bear Workshop.) Take out the Kmart logo and you could slide in all sorts of retail brands (from Kohl’s to Marshall’s) that would fit the Kmart “Right Here. Right Now.” positioning.

It's in the K? What was up with all those people flashing the “peace sign” or “victory sign” in those television spots? Wait... that peace sign is actually sign language for the letter “K”. (Your marketing department and advertising agency over-thought this one.)

A BILLION DOLLAR IDEA... FOR FREE
Own the letter “K”, it’s about the only thing you can own when competing with low-price owning Wal-Mart and cheap-chic owning Target. But own the letter “K” in a meaningful way that will resonate with Hispanic consumers. Phonetically and linguistically, “K” translates beautifully into Spanish - “QUE”.

Resonating with the Hispanic audience truly is in the “K”.

K Bueno roughly translated means, “That’s Good.”

K Bonita roughly translated means, “That’s Pretty.”

K Pasa roughly translated means, “What’s Happening?”

Julian, funnel all available resources to maximizing this simple creative concept. All Kmart advertising (print, television and radio) should supremely focus on communicating the "K". It’s easily understood (unlike the sign language "K" concept). It’s meaningful (especially to the Hispanic audience). And it’s rich with applications that Kmart can tap into for years to come.

In the end, it’s your call Julian. K Sera Sera.

John Moore
Brand Autopsy

Is this loyalty or bribery? III

John Moore (from the UK) commented that he doesn't think the Nintendo program "qualifies as a loyalty programme because it still retains the idea of Nintendo managing the loyalty." He went on to comment that he is not sold on the exclusivity design of the program as some loyalists may not "want to be part of a secret society." Finally, John questioned the hierarchical nature of the program and compared it to the frequent flier mileage design of airline's loyalty programs.

I agree with John that meaningful loyalty comes from real fans enthusiastically creating websites and fanatically sharing their Nintendo experiences at every turn. And fervent followers of Nintendo have done just that. A google search reveals myriad websites dedicated to sharing cheat codes. Another google search reveals an exhaustive list of websites created by evangelical Nintendo fans that are sharing their enthusiasm for all things Nintendo.

I admit, it does come across as somewhat self-serving and a tad contrived that Nintendo has created a community section on Nintendo.com to give their loyalists the venue to share their enthusiasm for all things Nintendo. Nevertheless, Nintendo has created a forum for their gamers to learn and to share from each other. I am not sure how closely moderated this section is on Nintendo.com, but I give them credit for at least doing something to foster community with their consumers.

Let my clarify my thoughts on why I think “rewarding loyalists with insider information is very cool.” By leaking out privileged and insider information to these mavens, Nintendo has the opportunity to generate word-of-mouth starting with an audience, their loyal gamers (mavens), that have the credibility necessary to make others take notice. It so much more compelling to learn of a cheat code from a fellow gamer than to learn of the cheat code that has splashed on the homepage of Nintendo.com for all to see.

Frequent fliers for the airlines have essentially bought their way into the hierarchy loyalty game. The price of admission for these consumers to receive Platinum-pass, Premier-level, Medallion-status (or whatever name an airline calls their exclusive rank of customers that get to board the plane early) is that they have all purchased their way to become a part of this exclusive club. An airlines seems to measure a loyal customer not by how engaged they are but rather, by how much money they spend with them.

On the other hand, the price of admission to become a Sage-level Nintendo gamer is predicated more on how active they are in participating within the Nintendo.com community and not on buying the most games. Nintendo is rewarding their engagement within the community rather than their loyalty to buying games. (Sure, the admission price to enter this loyalty program is that a consumer will have to purchase the Nintendo game system and a few games. It’s not like Nintendo is asking these consumers to buy a set number of games and turn in proof-of-purchase certificates in order to participate.)

I do praise Nintendo for creating a community for their fervent followers to gather in order to share and to learn from one another. (There are very few companies of scale that have done that.) I also praise Nintendo for crafting their loyalty program based more on participation within the community than with buying the most Nintendo product.

Is this the perfect customer loyalty program? Does this really qualify as a “loyalty program” since it is being administered by Nintendo? I cannot answer for a fact that the Nintendo Customer Loyalty Program does just that. However, I do contend that the design of their program is one that I think does a very good job of inspiring and fostering a spirit of loyalty amongst their customers.

Is this loyalty or bribery? II

Jackie Huba and John Moore (the British one) agreed with me that the Pizza Hut VIP program is bribery and not loyalty (see the comments section).

What about the recently announced Customer Loyalty Program from Nintendo... does this program foster loyalty?

Keep in mind that I last paid significant attention to the home video game market in the late 80s and have only casually kept up with the battle for home video game supremacy that is currently being waged between Sony’s Playstation, Microsoft’s Xbox and Nintendo’s GameCube. It appears Nintendo has struggled to maintain relevance given the technologically superior offerings from Playstation and Xbox. So in an effort to cultivate a more loyal customer base and to maintain relevance, Nintendo recently launched a customer loyalty program for their American customers. (Nintendo of Europe introduced a similar loyalty program for UK gamers some time ago.)

I’ve written two other blogs on customer loyalty programs (“Is this Loyalty or Bribery?” and “High-Touch, not High-Tech”) and generally, I am not impressed with most customer loyalty programs. However, I am impressed with Nintendo’s customer loyalty program.

Nintendo has structured their loyalty program into three levels with the lowest level being nothing more than a classic permission marketing play and with the highest level being an inner circle of influential and fanatical Nintendo gamers.

The basic level is simply called My Nintendo and all one has to do to participate is visit nintendo.com and register by providing some personal information in order to receive an email newsletter and other announcements from Nintendo. (Nothing too special here.)

The next tier is the NSider level. To become an NSider, one has to register at least one Nintendo product and you will receive access to hidden game content, cheat codes, and exclusive news. (Okay, now we are getting somewhere.)

The highest level is the Sage tier. Only the most active NSider members will be asked to become Sage members. If one is deemed worthy enough to become a Sage, then they will have access to preview new Nintendo games/products and they will help to moderate community forums on the Nintendo.com website. (Rewarding loyalists with insider information that is only privy to a select few is very cool.)

I applaud Nintendo for rewarding their most loyal customers with exclusive news and special access to cheat codes. I especially like their multi-tier loyalty approach as this structure serves as a motivator by tapping into aspirations and emotions to encourage fervent followers to be that much more fervent. Nintendo seems to understand that the power of influential and evangelical gamers is a tremendous lever to maximize.

Now, I also read that this customer loyalty program will go beyond offering special access to offering rewards. The first reward is a Legend of Zelda® Collector’s Edition disc for gamers who register two game titles and their GameCube at Nintendo.com. Hmm… I’m not sure if I like this element to their loyalty program.

So, what do you think? Is this customer loyalty program from Nintendo designed to foster loyalty?