Remorseful Starbucks tries to revive the category it strangled half to death

The new Starbucks ad (wait, it's a 1985 Folgers ad, apparently). The real ad (aired on SNL) is here

Once, in America, there was a thriving instant coffee market. There were brands like Brim, Maxim and Sanka and manufacturers came up with fun, technical ways to differentiate themselves: Folgers had its crystals, Taster's Choice had its freeze-dried process. There was even Postum, a roasted grain coffee substitute. The coffee, to be honest, didn't taste that great but you could get used to it. It wasn't like unlimited refill, diner-style coffee or even coffee from the famous "Anthony's in Atlanta" was all that fantastic either.

Then, blowing in from Seattle, came the winds of change. Not only did Starbucks coffee taste better, but you got a whole third-place-experience thrown in too.

Those were cruel times for those (like me) working in the instant coffee business. We watched, aghast, helpless, as people changed their drinking habits and abandoned us. The average age of the dwindling instant coffee population kept going up and up and the shelf space allotted to us by supermarkets kept going down and down.

Now, after all hope should logically have been abandoned, it's Starbucks itself riding to the rescue. After a seven-month test, Starbucks is going national with VIA, its own instant coffee product. And it's giving the launch the full treatment. There's a TV campaign and taste challenges and it all adds up to what CEO Howard Schultz calls "the biggest investment that we've made in a national launch."

Who knows whether the launch will work? It seems unlikely but what's to say that there can't be an instant revival? It could be like the Mustang, leggings or Space Invaders.

For long-suffering instant coffee manufacturers, one thing's for sure. It's a chance and a lifeline. Time to get moving. It looks like at least one of the players is alive to the opportunity. Nestlé has already launched some (for them) aggressive comparison marketing. That's a start but, hopefully, they've got some new products in the works as well. Now that VIA is out there with a previously unimaginable price point (almost $1 per cup, 5x as expensive as a cup of Taster's Choice), there's all sorts of ways that they can come up with to deliver a better tasting product.

Good times for instant coffee may yet be rolling again.

Earlier Brand Mix posts about VIA:
1) Starbucks VIA instant coffee taste test. Is it as good as they say?: Where I confirm that VIA does live up to its claims that it tastes as good as Starbucks brewed product and ask the question: So what?
2) Taster's Choice welcomes Starbucks to the Hood: Where I report on Taster's Choice initial marketing response

Who can we trust? Not the usual suspects

Photo: a L p Flickr CC

After years of moving from place to place and country to country, I finally stayed somewhere long enough to get called for jury duty. After signing in, sitting around and watching a motivational video that tried to sell the benefits of jury service to a skeptical audience, I was one of 45 people called down to the courtroom. The rest of the day was spent by the judge and attorneys whittling down 45 people to find the 12 people + 1 alternate who they believed could render a true, just and fair verdict. After all was said and done, I was selected as the alternate or, as described by the judge, the "spare tire."

But before that, somewhere in the middle of this tortuous process, there was an interesting moment around the topic of witness credibility. Whose testimony, the attorney asked, would be more credible: The police who had arrested the defendant or the defendant himself? One potential juror was excused when she said that she would believe the police because they always tell the truth. Another was excused because he had had a bad experience with the police and was not inclined to believe them anymore. Too much trust on the one hand, too little on the other.

Another potential juror asked the same question said that he would tend to believe the police more than the defendant because the defendant would have more reason to shade the truth than the police officers since he had more to lose. An acceptable answer. Not excused.

With that moment fresh in my mind, I read David Kiley and Burt Helm's article in BusinessWeek: "The Great Trust Offensive" which describes how companies like American Express and Ford are revamping their marketing to try and win back trust lost in the recession. The loss of trust has been quite dramatic. According to the 2009 Edelman Trust Barometer, only 44% of Americans said they trusted business, down from 58% in 2007.

What's interesting is that, as companies try and rebuild trust, they are finding that traditional methods don't work as well as they used to. As Kiley/Helm say: "The days of consumers passively absorbing a TV commercial--or for that matter a banner ad--are over." Only 13% of those surveyed by the Edelman report thought that ads were credible.

And, looping back to my jury moment, "who" can speak credibly for businesses is an issue as well. CEO credibility also hit a new low in the Edelman report. Only 29% of those surveyed believe them (and only 17% in the U.S.). Like the defendants in a trial, CEOs are perceived by many to have too much at stake to be entirely trustworthy. Employees, on the other hand, are easier to trust and, in fact, Edelman found that conversations with employees are the most trusted corporate source (40%). Perhaps this is not such a new development. As Ron Nessen (Gerald Ford's Press Secretary) said many years ago: "Nobody believes the official spokesman . . . but everybody trusts an unidentified source."

Of course, the current erosion in business trust has been driven primarily by the recession and the financial crisis. But the lack of trust in company leaders and traditional media is also being fueled by (and fueling) the rise of social media. As companies try and rebuild trust, they'll need to be even more creative and determined to engage in this medium.

Bonus Book Review!

The likely reason that the Q&A between the attorneys and potential jurors stuck in my mind was because the book that I was reading to while away the court waiting time was The Truth About Trust in Business by Vanessa Hall. It's a perfectly timed book given the recent erosion in trust in business and marketers attempts to win some of it back. It presents a simple model for building trust based on: managing expectations, meeting people's needs and keeping promises. Not much new thinking but, since many businesses fail on one or more of these pillars, something worth revisiting. The book has some interesting case studies covering various areas including "trust in marketing and branding" with a scorecard to assess your products trustworthiness.

There's one area where I disagree with the author. She subscribes to the "Humpty Dumpty" school of trust--that, once trust is broken, nothing can put it back together again. I personally subscribe to the less extreme "Broken Leg" school which holds that trust can be snapped in an instant and it takes quite some time and effort to repair.

SOTB: No excuses edition

Photo: "Skyline towards Sydney tower from Castlereagh Street" Cowboy Dave Flickr CC
For other Sydney dust storm pix see: Red Dust

Here's my roundup of recent noteworthy articles and posts. Interested in why I've not been blogging much recently? I didn't think so. This is the no excuses edition:

1) The Follies of Marketing Measurement: Steve Yastrow
"'If you can’t measure it, you shouldn’t do it,' is one of the stupidest concepts in business," says Steve Yastrow, guest-posting on tompeters! For example, he says: "Should you ask your receptionist to smile when guests enter your office foyer? Of course you should! There is no way to measure the impact of a smile, but you are 100% certain that it is a good idea." Steve is not suggesting that we don't measure anything, just that we use a little imagination in what we measure. (My own series on Death by Tools and Metrics here)

2) The Anti-laws of Luxury Marketing #9: Branding Strategy Insider
Derrick Daye has a continuing series on how the normal rules of marketing are turned upside down when dealing with luxury products. This post explores the idea that the role of advertising (for luxury goods) is not to sell, using a recent Tag Heuer print campaign as the example. I loved this part: "The dream must always be recreated and sustained, for reality kills the dream. Every time a flesh-and-blood human being buys a luxury product they destroy a little bit of the equity, they increase the product’s visibility – and contribute to its vulgarization by putting it in the public eye. The opposite applies when marketing everyday goods: there is an advantage for the market leader, for the dominant market share, and therefore for maximum visibility – it becomes a reassuring purchase."

3) Culturematic: a device for making culture in two easy steps: Grant McCracken
What if I ate all my meals at McDonald's for a month? What if I swam across Connecticut using local swimming pools? What if I made recipes from Julia Child's cookbook for a year? They're all example of "culturematics:" Small, manageable, fun, diverting culture chunks for easy digestion.

4) Corporations in swimsuits: Are you faking social media? Thought Gadgets
Digital strategist Jordan Julien has introduced the idea of "synthetic authenticity," the risk large corporations face as they try to engage customers in social media. The problem is that social media tools were built for individual people to interact with each other and not for "faceless entities." As relayed by Ben Kunz, this creates cognitive dissonance. For example, if you ask a question at Nike Plus on Twitter, you don't know who writes the answer. Do you trust their opinion? Is it a real person's thought, or a brand spinning its own future sales? One solution: Put real people in charge, like Adam Denison, PR guy for Chevy

5) Scientists find area responsible for emotion in dead fish: Mind Hacks
A new study scanned the brains of dead salmon to find evidence of activation as it 'looked' at photos of human faces. The research, led by neuroscientist Craig Bennett, is fantastically called: "Neural correlates of interspecies perspective taking in the post-mortem Atlantic Salmon: An argument for multiple comparisons correction." If you're thinking: How can a dead fish show emotion?, that's the point. The research turns out to be a warning against statistical misuse.

6) Are Your Friends Making You Fat? The New York Times
As I said, this is the "no excuses" edition but, if you actually need an excuse, it turns out you can blame whatever you've done or not done on your friends. Social scientists Nicholas Christakis and James Fowlergood have found that good or bad behaviors — like quitting or starting smoking or staying slender or getting fat: "Pass from friend to friend almost as if they were contagious viruses." Although this may come as no surprise, Christakis and Fowlergood's study is one of the first that's been able to scientifically validate the effect.

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

SOTB: Brand definitions edition

Photo: m.gifford (Flickr CC)

Instead of my usual roundup of recent noteworthy articles and posts, this edition of Six of the Best is inspired by brand expression consultancy BLACKCOFFEE and its great idea to invite readers to complete the sentence: "A brand is...

1) A brand is..... BLACKCOFFEE
Here's the link to that page where you can see the many varied definitions. A couple of the more interesting/unexpected responses: "A brand is like a person at a cocktail party. You want to talk to them or sleep with them or wish you never met." (Amy) and: "A brand is what my teenage son is always talking about when he wants my money." (Eric)

2) an analysis of “a brand is” brand as business bites
Denise Lee Yohn decided to try and categorize all the responses from the BLACKCOFFEE poll. Quite the challenge. Still, she gave it the old college try and put (what was then) the 170 responses into categories such as: Historical definition (e.g. "A brand is an iron tool heated in the fire and used to indicate ownership of cattle.") and Negative (e.g. "A brand is a set of lies we convince ourselves to believe in and hope the public will to.") Her conclusion: "There are a lot of definitions and interpretations of what a brand is. This makes brand-building ripe for confusion – which is a barrier when we talk about it with business leaders and try to make the case for investing in it." Yes.

Different Schools of Thought on "a brand is..."

So, I thought that I might also try and help tidy up this mess of definitions by describing four different brand schools of thought and link to some posts that represent them:

The focused promise brand school

3) The Demise of Dell: Ries' Pieces
Laura Ries represents the brand school that wants focus, hates line extensions and the one most likely to use the "Volvo = Safety" gambit. In this post, Laura argues that Dell's demise came once it tried to expand from its original low cost, direct sales business model: "In the business world today there are dozens of Dells, all trying to expand their way to success when the only thing that really works is exactly the opposite. Narrow your focus. Build your brand. Rake in the dough."

The customer rules brand school

4) You Don't Own Your Brand -- Your Customer Does: The Social Customer Manifesto
This school is the home of social media/word of mouth pioneers and those who extol the virtues of Zappos.com. What can be better than a company that's taken customer service to a whole new level and that has a CEO who tweets? School purists contend that social media has so completely changed the rules of the game that, as Christopher F. Carfi says in this post: "The old, top-down hierarchy of searing brands into the consumer psyche is done. Over. Finished." In this new world, he says, our role as marketers is to engage in transparent, authentic conversation and accept that we no longer have any control or influence.

The we hate branding brand school

5) Transformation Interrupted: Jonathan Salem Baskin
Jonathan's book: "Branding only Works on Cattle" makes the case that branding is a waste of money. The kinds of things he really doesn't like are: goofy mascots, logo redesigns, cute tag lines, anything that marketers do that does not directly create value or a fresh experience for the consumer. Only tangible, concrete actions count. In this post, Jonathan talks about research results from the Hartman Group which show that consumer loyalty is shifting -- from products and brands, to the experiences offered by retailers. His conclusion: "People aren't willing to buy based on the intangibles on which brands have relied for almost a Century. Reality is the new imagination, providing the context in which actions can assert truth (if not simply immediacy, and thus clarity) to consumers."

The brand as feelings school

6) What is a feeling? a clear eye
Tom Asaker's answer to the "a brand is" poll was: “A brand is an expectation of receiving a feeling by way of an experience.” In this post, he explains his definition considering: 1) Control: whether we marketers like it or not, we can't control what people think about our brands. But we can influence people by the experiences we deliver and 2) Feelings: People make brand choices based on a variety of feelings from indifference and inertia to desire. Tom believes that changing feelings is what brand-building in the 21st century is all about.

Building on Tom's thoughts, as I compare these four schools of thought it looks to me like their assumptions in a couple of key areas help explain their different perspectives:

- Marketers control over their brands (strong = focused promise, weak = customer rules)
- The rationality of consumer decision making (high = we hate branding, low = brand as feelings).

Meanwhile, for those who like visual schematics, I've always liked this brand model from Dubberly Design Office which maps out the connections between a brand promise, product development, experience and perception. If the brand world is as complex as this chart implies, perhaps it's not no wonder that the range of one-sentence definitions is so wide and there are still so many different schools of thought.

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

The Five Elements of Coconut Water's Success

Photo: Rin-Tin-Tin (Flickr CC)

As Al Ries pointed out recently, pioneering a new product or service category can cost a fortune. Think Webvan. Or, if you don't have a fortune to spend, and you have to build a category from scratch, it can take forever. So, when a category as distinctive as coconut water emerges from the primordial new product soup, quickly and without a huge investment spend, it's worth taking a look at the elements of its success.

Coconut water certainly seems to be headed in the right direction. In just five years, it's become a $35 million category (according to Merrill Lynch) attracting both consumer and manufacturer attention. And it's succeeding even though it has had to fight consumer perceptions that coconut products are unhealthy (specifically that coconut milk is very high in saturated fat) and that the product is apparently an acquired taste So, how?

NPR interviewed two of the entrepreneurs who have been building this new category and here are five of the elements that they talk about:

1) Existing market: Coconut water may be a new product to the States but it has been around for a long time in other countries, specifically those in the tropics. When Mike Kirban, co-founder of Vita Coco, was considering market entry, one of the reasons he settled on New York was because of its high concentration of immigrants from countries where coconut water is already popular. These consumers represented an opportunity to get some early sales while figuring out how to get those unfamiliar with the product on board.

2) Distribution: Another advantage of NYC is that the retail market still has a large number of independent food markets/delis that provide the opportunity for a store by store sales approach. Slow developing and potentially frustrating as this approach might be, it gives new products the time to gather some momentum. Gerry Khermouch of Beverage Business Insights describes the relationships between entrepreneurs, distributors and store owners in this kind of market as: "the yeast that allows new drinks to develop before they hit hard to crack chains like 7-Eleven."

3) Competition: Perhaps the most unexpected element of success is the fact that several companies entered the market more or less at the same time. As Mark Rampolla, founder of Zico points out, this helped them all gain credibility with retailers, distributors, investors and sales people as they figured: "Hey, if there are multiple brands that are being successful in a category, it must be legitimate."

4) Focus/positioning: The main competitors in the marker, Vita Coco, Zico and O.N.E. beverages, all incorporate expected tropical elements (There's a lot of sky blue, and palm green.) And each, to some extent, talk about the relevant functional benefit of the product (tons of electrolytes) but each has picked its own target and refined the positioning to tell a more specific story. As a Forbes article notes: Zico has focused on sports enthusiasts (and yoga lovers in particular), Vita Coco on young, urban hipsters as likely to use coconut water in a cocktail as drink it straight and O.N.E. is targeting moms and babies.

5) Category protection: Al Ries, posting on Brand Strategy Insider, talks about category killers, category leaders who launch line extensions to absorb or kill potentially new categories rather than let them thrive independently. (An example he uses is Diet Pepsi and Diet Coke absorbing the diet cola category established by Diet Rite.) But coconut water is too distinct and far enough away from the reach of big players to be killed off like that. Its challenge was proving relevance not differentiation.

I'm sure that these are not the only important elements. Entrepreneurial zeal, luck and hitting the right consumer trend at the right time are important too. What else?

SOTB: Spherical edition

Here's my roundup of recent noteworthy articles and posts. This week it's all about the world and other spherical bodies. (Any reference to the world or balls counts!):

1) Can One Facebook Status Change The World? Swampland
"No one should die because they cannot afford health care, and no one should go broke because they get sick. If you agree, join us in posting this as your status for the rest of the day." As Michael Scherer says: "If you are not familiar with this phrase, you probably have not been checking your Facebook and Twitter accounts today: A victory for "electronic chain activism" or just annoying? Meanwhile, best variation on a theme comes from Anthony Shore who "thinks that no one should go hungry because they cannot afford white truffles, and no one should go broke because they crave its aromatic, heavenly flavor. If you agree, please post this as your status for the rest of the day."

2) The World's Happiest Cities: Forbes
Rio is #1 and since San Francisco is also on the list (#7), I'm prepared to overlook the all-too obvious methodological challenges. The study was conducted as part of the 2009 Anholt-GfK Roper City Brands Index. As GfK's Simon Anholt admits: "Happiness is difficult to quantify" and this survey is more one of perception than reality.

3) Lonely Planet: Despite our inter-connectedness, we're now more alone than ever Newsweek
Facebook connects us but we're lonelier than ever. John T. Cacioppo, a neuroscientist at the University of Chicago, compares connecting on a Web site to eating celery: "It feels good immediately, but it doesn't give you the same sustenance."

4) What happens when there are no more world records left? Marginal Revolution
There has to be a time when the last record will have been set. The 800 metres can't be run in 1 second, the javelin can't be thrown for five miles. I wonder which event will be the first to have its last record set?

5) Toss the Ball. Hit the Ball. Oops! Oops! The New York Times
The serve is the only part of the game where tennis players have complete control but, for some, it's the most difficult: “You can see it in their faces — it’s almost like their mind is freezing up and they just look like they’re not going to win this point.” The Russian women tennis players seem to be the ones most affected at the moment.

6) Flaming Red Tennis Ball Catapults Merchandise Sales U.S. Open: Bloomberg
If a brand is not a logo, does this imply that a logo has no value? No. As timely proof, Bloomberg reports that merchandise featuring the U.S Open's flaming ball logo now accounts for over 40% of the millions of dollars of sales at the event. The logo (shown in the photo at the top of this post) was created 12 years ago (in a pure coincidence(!)) by Landor.

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

Botted water falling

Photo: Multnomah Falls, Oregon (me)

My very first post on this blog was about how bottled water was coming under attack on issues ranging from environmental to health concerns. At the time, those attacks had not had much impact on sales but I wondered if: "perhaps the thin end of the edge has been successfully applied."

Now, two years later, and helped along by the recession, U.S. sales of bottled water have indeed started to fall. It's a small decline (just over 1% according to Beverage Marketing) but, considering the fact that sales had increased by over 50% in the last five years, it's significant.

Inevitably, the falling demand has triggered a price war. The Wall Street Journal reports that a 24-pack of Pepsi's Aquafina was being sold on promotion at $2.99, about half its normal price. Coca-Cola has been trying to avoid discounting Dasani and has paid the price--its sales are down 26%.

As the price war intensifies, and marketing resources get diverted to support the fight, the risks of commoditization go up. And the more commoditized the category becomes, the less chance there is that sales will pick up again when the economy recovers. The tide may have irrevocably turned.

SIGG's choice comes back to haunt

Photo: ensign_at_e233net (Flickr CC)

Here's how SIGG CEO Steve Wasik positions the fact that SIGG bottles made before August 2008 contained BPA: "To be clear, all SIGG bottles made since August 2008 contain our new BPA free EcoCare liner. SIGG bottles manufactured prior to August 2008 have the former water‐based epoxy liner which contains trace amounts of BPA. These bottles have been thoroughly tested and showed 0% leaching of BPA. It is easy to determine which liner you have, as they are of 2 distinctly different colors."

Here's how Gawker translates that: "Haha: Those shockingly expensive Sigg water bottles beloved by yuppies and hippies for being free of some specific deadly chemical did in fact contain that deadly chemical. Do we spy the hand of The Creator?"

The great success of SIGG over the last few years has come from the fact, as Marketing News points out that it "became a badge of consumer eco-consciousness and all-around cool." As people worried about the waste and the potential toxity of plastic bottles with BPA, SIGG bottles presented themselves as safe and attractive alternatives. As the tidal wave of opportunity swept by, SIGG jumped in even though, as it turns out, they weren't quite ready.

How much of a backlash there will be remains to be seen. Competitors such as CamelBak and Klean Kanteen sense an opportunity and environmental groups are reacting with everything from disappointment to outrage. The CEO letter doesn't seem to have doused the flames but the offer to replace the old bottles with new ones looks like a step in the right direction if the exchange is set up in a relatively painless way for the consumer.

SIGG made its choice. What would you have done? Would you have gone for it too? Or would you have waited and maybe missed the boat?