Thursday, November 26, 2009

Six of the Best: Thanksgiving edition

Photo: Thanksgiving '08 by reneémudd (Flickr)

Thanksgiving-themed stories:

1) Let's Talk Turkey: (via Fritinancy)
Rumor/urban legend buster 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:
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!

Wednesday, November 25, 2009

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.

Thursday, November 19, 2009

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)

Tuesday, November 17, 2009

10 Peter Drucker quotes to celebrate his centennial

Photo: Taxi - Rear Window by pixonomy(Flickr)

Peter Drucker was born 100 years ago this Thursday in Vienna, Austria. He was a pioneer in social and management theory, a prolific writer of books and articles and a good source of quotes, many of which are still relevant today. Here are ten that resonate with me:

  1. The purpose of a business is to create a customer
  2. Business has two functions: marketing and innovation
  3. Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window
  4. The best way to predict the future is to create it.
  5. The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself
  6. Suppliers and especially manufacturers have market power because they have information about a product or a service that the customer does not and cannot have, and does not need if he can trust the brand. This explains the profitability of brands.
  7. Most of what we call management consists of making it difficult for people to get their work done.
  8. Efficiency is doing things right; effectiveness is doing the right things
  9. There is nothing so useless as doing efficiently that which should not be done at all
  10. Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you've got.

Saturday, November 14, 2009

Six of the Best: The clarity edition (+ FREE book!)

We don't need none of your highfalutin talk or affected manners around here. Here are six posts with a clear message:

1) 30 Days to Better Business Writing – my new FREE eBook: Bad Language
Matthew Stibe has set out to rid the business world of "jargon, waffle, hype, verbiage and conventionality." He's doing it by making his eBook free to anyone who wants. It's good so I'm doing my bit to spread the word in the hope that those who most need to read it, will read it.

2) Diary of a Tweet: Clarity vs Twitterjunk: The B2B marketing Blog
We're in the "trough of technobabble" when it comes to Twitter. A crisp, 140 character tweet quickly gets RT'd into a horrible mess of gobbledy-gook. With examples.

3) Painfully Honest and Epic Mobile Home Commercial Rhett and Link (via brandflakesforbreakfast)
Go to Rhett and Link's website and you can nominate a local business for a free commercial, perhaps something like this one for Cullman Liquidation. So, take a look at this ad. Or don't. I don't care:

4) Doing Business Houston-Style In the 1970s: HoustonPress News
And while we're in this blunt frame of mind, let's step back in time and visit Edward Mike Davis, owner of the Tiger Oil Company. A series of memos he's supposed to have written back in the 70s show his no-nonsense management approach. Just one snippet here showing his compassion and camaraderie with his employees: "Do not speak to me when you see me. If I want to speak to you, I will do so. I want to save my throat. I don't want to ruin it by saying hello to all you sons-of-bitches." Clearly he was too soft on his employees because, just a couple of years after these memos, the company filed for bankruptcy.

5) Can You Believe How Mean Office Gossip Can Be? The New York Times
I'm sure that Edward Mike Davis would have had some choice words to say about gossip in the office. He would have hated it and, according to this article, he would have been right. A new study of gossip shows how negative and destructive it can be and provides a few tips on gossip management.

6) Contrasts in How Google Suggests Searches: Ben Casnocha
As Ben points out in this post, we don't lie to Google. We type in what we're thinking -- good, bad, and ugly so it's a great way to find out what's on people's minds. Here's how. When you start to type in something to the search box, Google suggests the most popular completions to the given prefix. Slate tested this out and found some interesting contrasts between "dumb" searches and "smart" ones. Type in "how 2" are find: "how 2 get pregnant" and "how 2 grow weed." Type in "how one might" and find "how one might discover a new piece of music" or "how one might account for the rise of andrew jackson in 1828."

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).

Thursday, November 12, 2009

Marriott launches Autograph Collection: a tricky proposition

As a brand architect, I've always loved Marriott International. Here's a company that's really explored all the brand architecture options. See how, on this frequently-used chart of mine, the company has managed the relationship between the Marriott brand and its hotel properties up and down the price/quality spectrum. Its lower-priced hotels get a Marriott seal of quality endorsement but are kept at some distance. The JW Marriott uses the founder's name to signal a more upscale product and the Ritz Carlton stands alone.

With its extensive brand portfolio and the careful use of its flagship brand, Marriott has managed to compete successfully across a wide range of properties, providing consistent, appropriate and predictable quality to different customer segments. But what to do with those pesky, growing number of people who prefer independent, boutique hotels and who yearn for something that they would describe as less cookie-cutter. What to do about them?

Well, here's what Marriott has decided. It's launching a new brand called the Autograph Collection which will bring together high-end, unique properties in an upscale franchise. From a business perspective, this looks good. The high-end properties benefit from the marketing and operating efficiencies of tapping into Marriott's powerful infrastructure. Marriott benefits by partnering with these hotels to attract this tough-to-reach, independent-minded segment.

From a branding perspective, it's tricky. How can one of the strongest hotel brands successfully appeal to a segment of people who are trying to escape strong hotel brands? How can its new brand stay low enough key that it doesn't get in the way of the individuality of its independent hotel partners but still drive business?

In this Washington Post article, Don Semmler, Marriott's executive vice president of brand management, says that the purpose of the Autograph Collection is to bring a level of consistency to the new hotels, which the company hopes will build trust in the new brand among potential customers. He told The Post: "The universe of independent hotels has a lot of variation, some good, some bad. Our research tells us they want a trusted expert to help them navigate, so there is no disappointment."

That speaks to another problem. Will a company that has been so successful at delivering consistent hospitality experiences be able to stop itself from driving out all the quirks, inconsistencies and peculiarities that give these independent hotels the character that makes them attractive in the first place?

Tuesday, November 10, 2009

"Gimme 4." Sesame Street Turns 40

Sesame Street kicks off its 40th anniversary season today (Tuesday, November 10) with a guest appearance from first lady Michelle Obama. Ricky Gervais, featured in this outtake video, will be on later in the season (with a modified script!).

Sesame Street is the longest-running children's program on US television and, over the years, it has won 122 Emmy Awards as well as a lifetime achievement award. It's been going long enough that its first generation of viewers now have children of their own who watch the show.

What can we learn from Sesame Street's incredible success? Like any standout, there are some special circumstances, tough to bottle and repeat. When it launched, it was a show that was in the right place at the right time with the right people. But perhaps there's something to learn from its ability to survive and thrive all these years?

As Seth Godin has pointed out, many organizations fail to keep delivering exceptional experiences over time: "Here's a rule that's so inevitable that it's almost a law: As an organization grows and succeeds, it sows the seeds of its own demise by getting boring. With more to lose and more people to lose it, meetings and policies become more about avoiding risk than providing joy."

Sesame Street has avoided that fate, finding new ways every year to keep the show joyous. Through, I think:

1) Sticking to a mission with a few, core, strong values: In the case of Sesame Street, it's making learning fun with equality, tolerance and hope. The mission and values lie at the heart of the organization, provide its purpose and ambition and have helped guide its path as times have changed.

2) Keeping things fresh, dynamic: The death knell of TV shows is often the over-pursuit of "fresh" as writers burn though every possible angle to keep things hotter than hot. Sesame Street has managed to keep the energy flowing without boiling over. Great guest stars help.

3) Balancing tradition vs. change: Over the years, Sesame Street has managed to respect its traditions without being imprisoned by them. Malcolm Gladwell said that the essence of Sesame Street is: "The artful blend of fluffy monsters and earnest adults." That's still there but, over time, much else has changed from this season's hip-hop beat for the theme song "Sunny Day" to the use of computer-generated-imagery animation and many other changes to format and curriculum.

4) Fostering team commitment: Many people on the show have been there since the early days. Carroll Spinney still gives life to Big Bird and Frank Biondo has been a camera operator on the show from the first episode. Creator Joan Ganz Cooley, now 79, is still board chairman. Such continuity helps the show stay focused on its original mission and has protected it from the "lets start over" mentality that's often the route of constantly-changing teams.

5) Delivering the goods: If Sesame Street didn't deliver on its goal to help children learn, it would never have survived this long. There have been over 1,000 studies on its educational influence that would have exposed significant flaws. From the beginning, the show has described its curriculum in terms of measurable outcomes and then used research to test its performance. Many of the changes to the show's structure and content have come from these research findings.

6) Staying focused: Finally, Sesame Street has always targeted a very narrow band of customers, specifically 2-4 year-olds and their parents. The show has resisted the temptation to branch off from this tight demographic. Growth and business development has instead come from licensing (over 100,000 products) and market expansion (more than 120 countries internationally).

Happy 40th, Sesame Street!

More Muppets tributes and stuff:

1) Can the Muppets Make Friends in Ramallah: The New York Times
Sesame Street has developed 26 international co-productions. These co-productions are adapted for the local audience with local actors, themes and settings. This article explores the particular challenge of developing a show for Palestinian kids, realistic enough to resonate to them while sticking to the show's core values of optimism and tolerance

2) 101 Muppets of Sesame Street: National Post
All the characters from all the years in one handy, visual guide. Pretty amazing. Source: Muppet Wiki from Wikia (also amazing in its own way)

3) Sesame Street, Droid get Google's love: CNET News
Big Bird, Bert and Ernie are some of the characters featured so as doodles on Google's home page over the last few days. Bert and Ernie had to share their time with the Droid.

Friday, November 6, 2009

Six of the Best: Thanks for all the fish edition

Photo: Just Taken Pics: Flickr

An edition about dolphins, mice and men. I report. You decide:

1) Deep thinkers:The more we study dolphins, the brighter they turn out to be: (via Marginal Revolution)
Anuschka de Rohan describes the various, amazing ways that Kelly, a bottlenose dolphin, has devised to get more fish. After being taught to retrieve trash for a fish reward, Kelly realized that a small piece of paper trash got the same reward as a large piece. So now, when she finds any paper in the pool, she hides it under a stone and tears it off, piece by piece to get lots and lots of fish. And now she's using some of the fish she's given to bait gulls which she then grabs for a huge fish payout!

2) I only read it for the articles: Mind Hacks
Mind Hacks comments on an article in The Economist which shows how easily we can fool ourselves and rationalize our behavior. Researchers asked male students to rate two different sports magazines, one of which "just happened" to be a special swimsuit issue. The students chose the swimsuit issue but they justified their choice by referring to the other differences between the magazines (breadth of coverage, number of articles). Not that surprising but, as The Economist points out, it's more evidence of: "how people behave in ways they think might be frowned upon, and then explain how their motives are actually squeaky clean." This research should remind us that what people say about why they do something is often an unreliable guide to what actually influences their behavior. (You can read the original study on this pdf file.)

3) Tiny Irrationalities That Add Up: Texting While Driving: predictably irrational
This is, in part, a Public Service Announcement. Don't Text and Drive. It's dangerous. Dan Ariely starts his post by referring to a story in The New York Times which describes the UK's new, get tough policy on drive-texting and a particular case where a 24-year old design student died after a texting driver plowed into her car. It's another example of how we can make irrational decisions, this time potentially leading to tragic consequences. Dan's post explores the ways in which we can combat this particular problem, from graphic media campaigns to developing voice-activated texting (which would bypass the problem altogether).

4) 25 ideas for 2010: Hyperopia: (via Mind Hacks)
The latest issue of Wired (UK) explores 25 ideas for 2010, everything from neurosecurity to bionic noticing. Not as indigestible as it sounds. This "hyperopia" idea is about those who suffer from excessive far-sightedness and incorrectly think that frugality today will lead to longer term benefits. New research suggests that the future you won't thank you for your sacrifices and will wish you had partied harder and longer. Another idea from the series worth reading is the one about digital forgetting which argues that the ability to store photos, conversations and social network interactions forever is more of a curse than a blessing and asks: Do we need to remember how to forget?

5) Going to Extremes: Psychology Today
I'm going to start and end with dolphins but I must have a mouse story for this edition. Here's one that talks about how mice have shown us that while moderate exercise boosts immunity, extreme exercise is actually worse than being completely sedentary. In a recent experiment, mice on a moderate exercise program were better protected against a flu virus than those on an extreme program. Listen to the mice and take it easy.

6) So long and thanks for all the fish: Fihssticks

"Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so." Douglas Adams

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).

Tuesday, November 3, 2009

A rose by any other name would not smell as sweet to Rachel, and definitely not to Rosemary

A few years ago, by what I considered at the time to be an interesting fluke, I, Martin John Bishop, managed the MJB coffee brand. According to new work reported in Kellogg Insight, this was not a fluke. It was destiny!

In yet another example that we humans are just completely hopeless really, a team of marketing academics has shown that your name can influence your everyday choices and even life-shaping decisions. As Professor Miguel Brendl, one of the authors of the research says: “It’s a bizarre idea, but your liking for the letters of your name, which is really driven by your liking for yourself, might spill over to objects and influence your choices.”

A series of four studies show that it is not a coincidence that Marks and Marshas prefer a Mars bar to a Snickers bar when stressed or hungry or that women named Louise are disproportionately likely to move to Louisiana. The phenomenon is being called name-letter branding.

The theory: The idea is that positive self-esteem translates into people's preference for letters that are in their name. When asked to rate their liking of letters in the alphabet, people consistently chose letters in their own name. This letter-liking can be strong enough that it can transfer to objects that include the same letters. The transfer emerges under two main conditions: when people experience a strong need for the product or when they need to boost their self-esteem.

The research: In one experiment, people's self-esteem was threatened by asking them to write about an aspect of themselves they would like to change. This threat made people look for ways to feel more positive about themselves and this led 64% of those tested to prefer a tea whose name shared the first three letters of their name (e.g. Jonathans preferred Jonoki to Elioki). In another experiment, the researchers found that preferences for the name-letter brand were boosted when respondents were prompted to rely on their intuition rather than reasons.

The implications: “Even though, as you can imagine, the name-letter effect is not very strong and only works when people trust their feelings,” says Brendl, “it can have interesting implications for managers. For instance, it can be applied when choosing a name for a product aimed at a well-defined segment of customers, such as early adopters. It could also be useful for direct mailers, who can use different names to sign their sales pitches.” And, as Brendle points out, “name-letter branding should be particularly relevant when dealing with business categories related to ego, such as beauty, sports, and luxury products.”

As I read this research, I thought about a recent post from Landor colleague, Mich Bergesen (note the initials) talking about the "i-convention" and the trend towards everything being named "i"-this and "i"-that. The convention continues to be popular even though it's already past what may have been thought to be a sensible limit because it so perfectly expresses human nature. "No matter what era we were born in, it seems we are all part of the iGeneration—it truly is all about us." Instead of name-letter branding, the i-phenomenon took it up one level.

Meanwhile, back in the Bishop household, which still has some MJB golf balls, coffee cups and other tchochkes sales-driving premiums from the coffee management era, this research may explain our rediscovered appetite for fondue. It's made by Emmi, all the letters of our 6-year old daughter's name.
Research Source:
Brendl, C. Miguel, Amitava Chattopadhyay, Brett W. Pelham, and Mauricio Carvallo. 2005. “Name-Letter Branding: Valence Transfer When Product Specific Needs Are Active.” Journal of Consumer Research, 32: 405-415.

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