Jarden Corporation: ready for some boo-yah!?

Would a new approach to branding double Jarden's share price?

I'm not a big fan of Mad Money. The whole Jim Cramer thing--the shouting, the close-ups, the boosterism, the hysteria--it just doesn't work for me. But this segment was interesting. Cramer had invited Martin Franklin, CEO of Jarden Corporation, to talk about why home goods, specifically appliances, are doing so well this holiday season. Also, to harangue him about the fact that Jarden may be one of the biggest companies that no one's ever heard of.

Jarden is a $5 billion plus company or as Cramer put it: "a pastiche of a company, a mosaic of different brands." The brands include (among many others): Mr. Coffee, Crock Pot, Sunbeam, Oster, Coleman Outdoor and, for you skiing fans, K2, Marker and Volkl. It's #1 in 20 different categories and particular strong in home appliances sold through Target and other mass merchants.

Cramer thinks highly of the company and wishes it was better known. Standing in front of a large collection of Jarden products, he told Franklin: "What I'm amazed about, at this moment in time, is that all these brands are yours but no-one knows it. When is this going to be the Jarden Crock Pot? You'd double your stock if you'd let us know. What's the matter? You don't want to double your stock?"

Franklin responded that the Jarden brand is known to retailers and that it was never the goal to make it a consumer-facing brand. But does Cramer have a point when he says that Jarden is undervalued because it's not well known? And would slapping a Jarden logo on all of its products help?

Better known = Better valuation? As Franklin pointed out, retailers all know Jarden and presumably key analysts and investment managers also know the company. So, who cares if anyone else knows who they are? But, in fact, it does make a difference both for individual and professional investors.

Individual investors prefer to invest in stocks they know well and strong brands do better in the market than weak ones. From 2000 to 2008 the top 100 brands generated a 31% return vs. a 28% loss for the S&P 500 according to this article in TradingMarkets.com. For these investors, the challenge is to establish the link between the brands they know (like Mr. Coffee) and Jarden, the company whose shares they buy.

For professional investors it's more about how they classify a stock. In the case of Jordan, its chosen path of public anonymity positions it as a holding company or conglomerate. For a vairety of reasons, these companies typically trade at a discount to the market (as much as 10%, according to CFO Magazine). If Jorden raised its profile it could potentially escape this label.

Logo-slapping? If Jorden wanted to raise its profile, would Cramer's logo-slapping idea work? It's worked for some companies--Nestlé and Mattel for example and it would establish the connection between Jarden and its well-known brands. But would it work? Probably not. The problem is that there isn't a common thread linking all of Jarden's product portfolio. K2 sales would not be helped by association (via Jarden) with Crock Pot. At best, the Jarden brand could be used to endorse a subset of its portfolio (like its home appliances) in the same way that Nestlé is used to endorse its human food brands but not its dog food brands.

The alternative to logo-slapping is to develop awareness and reputation for the company by investing in the corporate brand in the mode of, say, P&G. Could this work for Jarden? Possibly but it would require time, commitment and investment before it paid dividends. To be effective, Jarden would need to find and express a purpose for its brand (something to stand for).

So, could a new approach to branding double Jarden's share price? I'm going to say "yes" but with a high level of difficulty. Agree?

As Copenhagen starts, Brazil flies the green flag

Photo: Brasil, meu Brasil brasileiro... by Andrea Fregnani (Flickr)

Maybe it's because their economy is doing better than almost everyone else's this year. Maybe it's because they are worried about the destruction of their Amazon forest. Whatever the reason, Brazilians stand out for their concern about the environment and their commitment to buying green products.

The 2009 ImagePower Green Brands Global Survey shows Brazilians: Most concerned that the environment is "on the wrong track," most concerned about the environment vs. the economy and most intending to spend more on green products next year. The next two countries on the list? In terms of commitment to purchase green products it's China and India. Lagging behind: The UK, Germany and the U.S.

Is this a hopeful sign? We citizens of the developed have such ingrained bad green habits and it's taking us a long time to break them. The survey suggests that perhaps citizens of developing nations will not follow our poor example but will, instead, choose a greener path.

For more information about the study, there's a podcast and pdf available on Landor.com (here).

Source: The ImagePower Green Brands Global Survey is put together by Cohn & Wolfe, Landor Associates, and Penn, Schoen & Berland to survey consumers on their perceptions of the rapidly evolving "green" space. This year's Green Brands Survey is the largest yet: Over 5,000 people in seven countries participated. This year Esty Environmental Partners, a corporate environmental strategy consulting firm, helped develop the survey.

Six of the Best: Celebrity endorsement edition

Et tu, Tiger? For a while it looked like stonewalling might work and that the huge amount of goodwill in the Tiger bank might be enough. But, by the end of the week, as voice mails and text messages exposed more and more of the gory details, the great sports icon of our time was under siege. The lesson: If you use celebrity endorsers, you better have a crisis management plan in place as well:

1) Problems: Mike Arauz
If you'd like to get a peek inside Team Tiger's crisis room, read it here.

2) Hand of Frog: Egg Strategy

Gillette must be feeling particularly aggrieved right now. Even before Tiger drove into a fire hydrant, it already had a problem with this Champions ad. The original version showed Thierry Henry holding the ball and, therefore, had to be changed. (Anyone not following World Cup soccer qualifiers may be thinking "why?"--Here's the answer.) C'mon Roger. Your turn!

3) Subway's Brand Has A Large Jared Problem: brandchannel
And Tigers's and Henry's sponsors are not the only ones with problems. It appears that Jared, the guy who lost 245 lbs eating Subway sandwiches, has been putting back on the weight. Perez Hilton posted a picture of Jared not looking as svelte as he does in the Subway ads. As Abe Sauer points out in his post: "The problem with hitching your brand-wagon to a single star is that sometimes that star falls off his or her own wagon."

And now switching gears from fallen celebrities to celebration:

4) What are the best TV ads of the noughties? Guardian.co.uk
Get ready for tons of "best of" lists this year. Not just best of the year. Best of the decade too. The Guardian gets off to an early start with a list of best (UK) ads. Included on the list is a series of spots for John Smith beer featuring Peter Kay, a "no-nonsense" celebrity endorser.



5) OK Go - WTF? OK Go (via brandflakesforbreakfast)


The latest from OK Go. Another great idea as follow up to Here It Goes Again. Celebrities of their own video.

6) Characters for an epic tale: love all this

Companies sign up celebrities hoping that they will be heroes of their epic tale. Unfortunately, they sometimes fail to live up to this hope, playing instead one of the other characters from this great poster.

That's it! Back soon with more stories from the world of brand strategy (and vaguely related areas). More thoughts and comments also available on Twitter (@martinjbishop).

Taster's Choice samplers trying to stick it to Starbucks

Screenshot: www.tasterschoice.com

Who would have thought a year ago that Nestlé would launch a national "taste for yourself" sampling campaign comparing Taster's Choice to Starbucks? The idea would have seemed absurd. Incredible. Ridiculous. But when Starbucks launched VIA, its own instant coffee brand, the doors of opportunity flew open and Nestlé sampling teams are indeed on the march.

From my biased perspective, as a former Taster's Choice brand manager, here are a few observations about this peculiar turn of events:

1) What an opportunity: Typically, a new competitor coming into your market with a bigger brand and a superior product would lead to lots of weeping and gnashing of teeth. But this is a case where such weeping would be misplaced. The VIA launch creates news in a category that never makes the news. It gives the category credibility it sorely lacks. It establishes a price point that makes Taster's Choice seem cheap by comparison (68 cents for VIA vs 17 cents a cup for TC). And it may bring new, younger consumers into the category who would never otherwise have been interested. If VIA is successful, the entire instant coffee category will be revitalized. It's not just an opportunity, it's a once-in-a-lifetime opportunity.

2) The response: To their credit, the Nestlé team has been quick to respond to the opportunity with its sampling campaign. But the approach is defensive, intended to protect and repel rather than leverage. The fact is that Taster's Choice will be better off if VIA succeeds than if it fails. So instead of comparing prices, talking about how the VIA launch is a "lot of hype" and otherwise trying to stick it to VIA, the better approach would be to work out how to live and thrive in a VIA-successful world.

That said, I know that creating/selling a crisis is one of the best ways to get a bigger marketing budget. If more money was obtained by using a sky-is-falling argument (such as: "OMG, Starbucks is launching an instant coffee. We need more money or we'll be ruined") then it's not surprising that the campaign funded by those dollars has gone negative.

3) The problem of taste: The current campaign focuses on the one clear cut advantage that Taster's Choice has over VIA. That it's cheaper. Which is undeniably true. What the campaign doesn't talk about is the fact that VIA tastes a lot better. As I posted earlier, the VIA claim that it tastes as good as a Roast & Ground coffee actually stands up. I have no doubt that the Nestlé product developers could come up with something of similar quality if they were allowed to increase the cost of goods somewhere in the VIA ballpark. Hopefully they are working on that.

4) The media: A while back I criticized Nescafé's Twitter presence (@nescafeusa) as a "rather bland, occasionally ill-fitting, half effort where the toe has barely touched the water." While the new sampling campaign hasn't exactly exploded the number of followers (762 as of Nov. 3oth vs. 558,217 for Starbucks(!)), it has provided some relevant material. The tweets now feature up-to-the-minute reports of where the Taster's Choice samplers are handing out samples. Same for the Nescafé Facebook page. It's a small example of the evolution of marketing and media. Sampling programs help create the content for social media which, in turn, makes the sampling programs a more valuable part of the marketing mix.

By the way, if you want to taste Taster's Choice for yourself and haven't come across a sampling team, you can order from here.

Six of the Best: Thanksgiving edition

Photo: Thanksgiving '08 by reneémudd (Flickr)

Thanksgiving-themed stories:

1) Let's Talk Turkey: Snopes.com (via Fritinancy)
Rumor/urban legend buster Snopes.com verifies that people do, in fact, call Turkey hotlines with the strangest of questions. Of the many listed in the post, my faves are: How to carve a turkey with a chain saw? and Can motor oil be used as a baste? (possibly from the same caller?)

2) New York Bar Owner Says He Will Unveil Nation's First 100-Proof Turkey: Fox News
O'Casey's Tavern in Midtown Manhattan is offering what it believes is the nation's first 100-proof turkey. It's being infused with fruit-flavored, 100-proof Georgi vodka for three days before being cooked. Thoughtfully, the tavern is offering free taxi rides to anyone who eats the turkey.

3) Thanksgiving eating strategies: bloggingheads.tv
Ezra Klein and Mark Bittman discuss how, if you wanted to, you could eat less at Thanksgiving. It's all about you, in rational-mode, plotting ahead of time to outwit your irrational self. Strategies discussed include: keeping food off the table (so you have to get up to some more), using small plates and then increasingly "creative" ideas like chopsticks and tight shirts.



4) Biden Pardons Single Yam In Vice Presidential Thanksgiving Ritual: The Onion
"'Under my authority as vice president of the United States of America, I hereby grant this yam full and unconditional clemency,' a smiling Biden declared as he gently patted "Spud," a Beauregard sweet potato grown in Louisiana."

5) United Airlines works to reconnect with customers and restore battered reputation: Chicago Tribune
As a long-suffering United Airlines frequent flyer, I'd love this to be true. It would really be something to be thankful for. Heck. To get into the spirit of the season, let's give United the benefit of the doubt for a change. Perhaps this time things will change for the better.

6) The Muppets: Bohemian Rhapsody: Muppets Studio
YouTube is all the better for having the Muppets setting up their own channel. An escape from reality. Definitely something to be thankful about, especially if future videos are as good as this one.



That's it! Back soon with more stories from the world of brand strategy (and vaguely related areas). More thoughts and comments also available on Twitter (@martinjbishop). Happy Thanksgiving everyone!

Extended warranties are too expensive. Why are consumers so happy to buy them?

Photo: TVWall2 by justshufflingin (Flickr)

Did you know that extended warranties are often more profitable for retailers than the products the warranties are for? According to Business Week, profit margins on warranties are as high as 60% so they account for a disproportionate amount of retailer profits. (For Circuit City, before it went out of business, warranties apparently accounted for all of its profits.)

So it's clear why retailers try and power sell warranties. But why do we consumers continue to buy them and why are we prepared to pay a price so disconnected from the actual cost? We've been told for years that these things are a waste of money but we just don't listen.

Some insights into this question come from a new paper in the Journal of Consumer Research. The authors--Tao Chen, Ajay Kalra and Baohong Sun took a look at purchase data from an electronic retailer and they've concluded that the decision to buy a warranty depends a lot on the shopper's mood. Turns out that people are more likely to buy warranties on fun products (like flat screen TVs) than for functional products (like computers). The authors think that people buy warranties for the fun products because they care about them more and would feel a greater sense of loss if they broke and weren't covered. That means that the price we're prepared to pay for a warranty reflects our expected pleasure from the product purchased rather than from a rational assessment of whether it's likely to break or not, thus providing retailers their profit opportunity.

Any chance that retailers can wean themselves off these over-priced warranties? No. But they could and should do better and not exploit their customers failings. One way forward would be to add more value to warranties. The best example I could find is AppleCare. Rather than just a basic warranty coverage, Apple adds outstanding service and support from its experts. That adds value and it's a big hit with customers.

Meanwhile, when it comes to extended warranties, I'm just going to say "no," however happy I am with what I buy.

Businesses move forward with purpose

Photo: Vintage Woman Soldier Veteran Bugler, WAF U.S, Air Force 1950s by Beverlykahuna (Flickr)

Two powerful forces are combining to push businesses to catch up with Peter Drucker's ideas about them serving a higher purpose--just in time for his 100th birthday (which would have been today).

Drucker was a strong proponent of businesses going beyond maximizing quarterly profits for shareholder benefit. Why? In his words (from this HBR tribute): "Most people need to feel that they are here for a purpose, and unless an organization can connect to this need to leave something behind that makes this a better world, or at least a different one, it won’t be successful over time.”

So what forces are pushing companies in this direction?

1. The Recession: The recession may be technically over but the current economic conditions continue to impact both consumer confidence and marketing budgets. As Landor-colleague Allen Adamson points out in this Forbes article, such conditions foster purpose-driven branding: "a company whose employees can answer the question, 'Why are we here?' will be the company that makes stronger connections with consumers in search of solutions to life's new normal issues." This Advertising Age article and this WARC News item list a growing number of companies that have become mission-marketers in the U.S. and the UK including P&G, Unilever, Heinz, Wal-Mart, General Mills and Sony.

2. Changing Media Dynamics: The challenge with social media for traditional marketers is the "social" bit. It's less about broadcasting and publicizing, more about 1:1 conversations and dialogue. And the fact is you just can't have a very interesting chat about a box of cereal or a can of soda. As Dove shows, there's much more social media potential talking about real beauty than there is talking about the new range of beauty bars and lotions. As the media change and evolve, so will brands.

To what purpose?

Back to Drucker. The sort of purpose he had in mind was not something superficial as represented by so many mission statements that companies have today. But something grand-- like GE's ambition to be: "the leader in making science work for humanity."

I'll leave you to pick through the current crop of examples (here and here) to decide which of them seem grand vs. less grand. But, to give you some guidance:

More grand if:

The purpose is connected to the intent of the founder (or a later visionary): Pre-recession, Wal-Mart went though a few years where it was struggling to define itself. Should it move more upscale? Should it be more like Target? But then it looked back at its history and chose to embrace the vision of its founder, Sam Walton, which was, yes, to offer low prices but with the intent of helping people provide better lives for their families. With a renewed sense of purpose, Wal-Mart now has direction and energy for its marketing programs and employee engagement with its "Save money. Live better" tag line. Charles Schwab is another company that has rediscovered its purpose by considering its heritage.

Less grand if:

It's mainly about saving money: An umbrella campaign that features all the products in a portfolio can be much less expensive than spending money on each product individually. It's a temptation for companies looking for ways to cut their marketing budgets. All they need is some kind of mission-statement-thingy that can cover all their stuff. With this kind of thinking, they usually end up with something bland and uninspiring to customers and employees alike. Or, as Jack Neff describes in the Advertising Age piece, mission statements that: "Can provoke eye rolls nearly strong enough to cause head trauma among journalists, not to mention the more cynical or maverick elements within corporations."

In case you missed it: 10 Peter Drucker quotes (from earlier this week)