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Wal-Mart's Best Strategy to Combat Tesco's Fresh & Easy

2008-01-16T08:02:00.000-08:00

Wal-Mart plans on extending its retail presence into smaller, neighborhood friendly stores under the name 'Marketside' (source) in a direct effort to combat Tesco's attempt to enter the U.S. market with their Fresh & Easy stores.

Tesco's strategy in the U.S. is to enter the grocery market with small, local stores specializing in organic and ready to eat meals. The market is dominated by Trader Joe's, who, with roughly 300 in the Southwest, has an average store size of about 10,000 square feet per store. Trader Joe's has had a successful run in California, a place where Wal-Mart's big box retail locations have been met with opposition and little success.

Entering the market with store roll out plan of 100 stores to be developed over the next 5 years and investing around $500 million, Tesco's strategy is a bold one. Known for aggressive tactics in Europe, Tesco is planning on focusing on low-income and poverty stricken locations usually abandoned by larger grocery chains that average anywhere from 40,000 to 55,000 square feet per store. By focusing on these "deserts," as Tesco calls them, Tesco will attempt to gain a foothold within the U.S. market. If Tesco can become successful in building a chain of 100 stores within the Southwest U.S. market, the company can expect to see gross profits of approximately $600 million per year and sales nearing $2 billion.

Whole Foods, which recently acquired Wild Oats, is the next closest competitor to Trader Joe's. Whole Foods' stores average 34,000 square feet and specialize in a similar assortment to the proposed Fresh & Easy product offering, mainly perishable, healthy grocery and nutritional food products. As compared to Trader Joe's, which stocks roughly 2,500 private label products - approximately 85% of its total offering, Whole Foods' private label program accounts for 16% of grocery and nutritional sales for the chain. While Trader Joe's is a privately held company, Whole Foods, a publicly traded company, has grown in average store size by over 50% in the last 10 years and its current store development program contains 88 new stores through 2010 with an average of 56,000 square feet per store (62% larger than existing store size). The proposed development strategy will bring the average store size to over 41,000 square feet.

Though because Trader Joe's is a privately held company it is difficult to grasp the growth of its average store size, but its most recent store development plans appear to involve store sizes greater than 12,000 square feet and could indicate a growth in the average store size for the future of the company.

The trend of developing larger store sizes could lay the groundwork for Tesco increasing its average store size to compete with the typical grocery retail channel; Wal-Mart has been attempting to enter the grocery retail market for many years and sees the grocery store segment as viable competitor to its big box style of retail.

Wal-Mart's plan to enter the local grocery store market includes store sizes roughly 20,000 square feet in size and it appears, by looking at their recent Trade Mark applications, that it will enter the market with a heavy dose of private label product offerings - similar to the tactics employed by Trader Joe's.

Looking at the long term outcomes for Wal-Mart and Tesco, Wal-Mart clearly sees the writing on the wall if Tesco were to enter into the U.S. market with any success. If Tesco were to gain a foot hold within the U.S. market, it appears the average store size would gradually grow and, most likely with additional acquisitions, Tesco would compete with Wal-Mart within the typical grocery store market and look to eat away at Wal-Mart's market size. Wal-Mart's options to combat Tesco are very clear and point to one direction, compete with Tesco head on.

With this scenario, there are only two likely outcomes; both Tesco and Wal-Mart succeed or both will fail. The outcomes are limited and universally the same because both companies are taking similar approaches and employing similar tactics that if one succeeds, the same will be true for the competition. It will be very unlikely that one company will succeed while the other fails.

This appears to be a strategic move on Wal-Mart's behalf in an attempt to keep Tesco out of the U.S. Market. Strategically, it is worth the $500 million investment to flood the market with an additional local, fresh grocery store to dilute the market place, confuse consumers and see Tesco fail in its attempt to enter in the U.S. market. On the other hand, if both companies were to be successful within the local, fresh grocery store market, Wal-Mart's investment will pay dividends in a market that currently only has three large players; Tesco, Wal-Mart and Trader Joe's.

Untapped Potential: Energizer Limits Brand Extension Opportunity in Automotive Battery Category

2008-01-06T12:52:00.000-08:00

Energizer has had a licensing agreement with Johnson Controls for an unknown number of years (at least since 2001) for auto and marine batteries. This is a strong move for Energizer and shows the potential of licensing agreements for products within seemingly core categories. Johnson Controls is one of the world's largest automotive battery makers and this partnership is a strong move for both parties. This agreement is a big opportunity to spread the Energizer brand and increase the number of Energizer consumers and amount spent by those buying energizer batteries.

With only a few brands within the automotive battery segment, in addition to the fact that consumer purchasing cycle for batteries has to be very long (3+ years) cycle, a prominent consumer brand such as Energizer could pull consumers to the Energizer branded auto battery when compared to the competition. In fact, a majority of auto battery brand are actually private label brands, such as Die Hard (Sears) and Duralast (AutoZone).

The problem here lies with the execution and oversight of the licensing agreement. Many companies face similar problems, a viable opportunity, but a lack of resources and personnel. Lack of attention spent on managing brand extensions and partnership opportunities because of insufficient resources leads failed ventures and negative impressions with consumers. The licensing arrangement is seen almost as an easy revenue stream and then set aside. This appears to be the case with Energizer’s auto battery.

With such a large potential in this category, it is a shame to see Johnson Controls sell the batteries exclusively at the Pep Boys automotive store. Johnson Controls has an exclusive supplier arrangement with Pep Boys and seems to lack incentive to sell the Energizer branded car and marine batteries elsewhere. This is where competent oversight of the program could lead to increased revenue and consumer brand impressions.

With Pep Boys’ ~550 (and shrinking) store count, Energizer has essentially limited themselves to a small percent of the auto category footprint. Because the Eveready company has given the control of the Energizer brand with a lack of oversight to the licensee, they have given up control of one of their most valuable assets. Understanding that the auto battery category is very competitive and commoditized, including a large dominance of private label brands, one has to view the opportunity for Energizer within the auto battery as an opportunity to build brand strength first and a financial opportunity second.

Business Decisions and Branding Strategy

2007-12-15T11:44:00.000-08:00

The old school train of thought surrounding branding strategy is to keep a brand within a single category to ensure keeping the brand strength high and the category recall by consumers even stronger.

By taking lessons learned from Strategic Theory we can see how to make such decisions and the effects that they will have on the strength of the brand and revenue generated or lost by such decisions.

There are several keys to ensuring the right decisions. The factors to consider when making such a shift include: revenue, markets, brand impressions, consumer perception and current position protection.

After considering such factors and identifying possible outcomes, one can use strategic theory to anticipate what the competition’s move will be and to identify a company’s best move.

By taking a look at the decision by both Energizer and Duracell, we can identify the each company’s best strategic decision and how they came to the decision to extend their brand into the rechargeable battery category.

When looking at the new category, there three strategies that the companies could employ. The first and most obvious is doing nothing, keep the status quo. The next two are similar, but the execution varies and is the main difference between the two. The companies could choose to enter the new category by launching a new brand or by launching a brand extension into the new category. (Acquisition is also a possibility, but is very similar to launching a new brand and in this case, there is no viable brand on the market for acquisition.)

Energizer and Duracell have both analyzed the decision to extend their brands into the rechargeable battery category and both have similar decisions to make as the affects of such a decision will have similar impact on both companies. Revenue is one of the heaviest factors for these two companies and when looking into the revenue, the companies need to look at their current market size, the growth of the current category as well as the size and growth of the new category.

Both companies have invested large amounts of their budgets to advertising and branding efforts and because of this, launching a new, a co-branded or even a sub-branded brand within the new category will be very costly. There is such a large overlap between the new category and old, that the launch of a new brand would be too costly and the return too small.

Looking at the situation where a company A launches a new brand, while company B extends their brand into the new category. By choosing to launch a new brand, Company A must incur a large advertising loss for a successful launch of the new product, because they are launching a new brand, the canabalization of Company A’s brand is lessoned, but because of the lack of awareness of and trust in the new brand, market success tips in favor of Company B who extended the brand rather than launched a new brand.

For both companies, the strategy of the Status Quo is Dominated by the two Expand strategies. And because it is in Company B’s best interest to move into the new category, Company A should expect Company B to do just that, planning accordingly and vice versa. Both companies can essentially remove the ‘Do Nothing’ strategy from the matrix and identify the best plan moving forward.

Both companies now have a best strategy to launch a brand extension into the new category.

Time for a Family of YouTube Brands?

2007-12-01T08:58:00.000-08:00

With the WGA on strike YouTube, and other online video sites, have an opportunity to capitalize on the lack of choice of shows with new content by viewers.

The best strategy for YouTube in the upcoming year is to create dedicated channels of content geared around specific categories and themes. In essence, YouTube would be similar to a cable operator as well as the content producers such as MTVN and ESPN. By creating a network of channels for the site, YouTube would be able to create new, specialized channels that could cater to specific and more niche user groups.

There are two options for YouTube in creating these channels. The first is to utilize a YouTube Master Brand with a Descriptor Brand strategy (aka Family Branding), naming the channels YouTube Sports or YouTube Reality. This strategy would clearly identify the different channels and clearly label the different offerings by YouTube, but long the long term potential would be weakened and would allow for increased competition by Weeds (new competition within a category that was able to grow because of poor brand and category defense by leading brands within that category). The second and more effective strategy would be to utilize an Authentication Brand naming strategy, creating a new channel brand and authenticating it with the YouTube brand, such as Competition by YouTube (Sports) or TruLife YouTube (Reality). This strategy is more dominant strategy for the long term because the category, online video, is still in its infancy. Creating new brands with the support of the YouTube brand allows YouTube to cater to the niche categories with brands geared towards those groups.

This Authentication method will be more difficult to execute, however, the longterm outcome will be more beneficial to YouTube than building channels with the Master Brand strategy. YouTube can then target niche consumer segments with individual channels that contain content related to a specific theme, all the time allowing those same consumers to .view content in other categories

Ciroc Vodka Taking New Approach

2007-10-29T09:12:00.000-07:00

Ciroc Vodka announced a partnership with PDiddy, giving up branding and marketing controls to Puffy in an effort to align the Vodka with on of the biggest names in Hip-Hop and differentiate the brand from the stiff competition (no pun intended) within the hard alcohol category. The partnership gives partial ownership to PDiddy (possibly 50%) in a deal structure similar to 50 Cent's arrangement with Glaceau's Vitamin Water that left the rapper cashing in after Glaceau was sold to Coca-Cola.

This type of deal structure is a great opportunity for the brand and the celebrity to build on the strengths of the celebrity with not having to create a new brand, utilize previous brand recognition and established distribution. As compared to Trump branded Vodka, this partnership will allow those who don't associated with PDiddy to still resonate with the brand and enjoy the vodka, while at the same time, the association with PDiddy will strengthen the brands presence within the party/club lifestyle.

Unfortunately, Ciroc also gave up marketing and branding control to PDiddy, which has been disastrous at best with his last attempt.

These types of partnerships are becoming more common place, the afore mentioned 50 Cent deal as well as David Beckham not resigning with Gillette because he wanted more than just an endorsement deal, i.e. partial ownership or revenue sharing. I am surprised that Ciroc gave up 50% ownership in the Vodka, but I would expect to see more partnership arrangements like this one in the future.

Unforgivable Women Commercial is, well, Unforgivable

2007-10-02T08:34:00.000-07:00

With the success of his mens fragrance, Unforgivable, rapper, Puffy, PDiddy, Puff Daddy, Sean John, Puff the Magic Dragon has released his newest scent, Unforgivable Women - a new fragrence for women. The release of the new perfume has been aided with a racy commercial that is too provocative for TV, even limited to airing after 9pm on one of PDiddy's most valuable avenue to reach consumers. The commercial stars and was directed by PDiddy himself and lacks class and sophistication.

The :30 spot seen above (also in :20 and :60 spots) depicts PDiddy meeting and having a sensual encounter with a young lady in the stairwell of a hotel. Despite its sexual nature, its a wonder that anyone at Estee Lauder allowed this commercial air. Puffy himself seems a little upset that the suits are censoring his commercial. "I feel strongly that this movie needs to be viewed and judged by the public rather than by executives," Combs said. "Some people may be uncomfortable with the sensuality and sexual content, but it is important for them to make that decision personally." source First off, its a commercial, not a movie. Second, it sounds like he needs to take some advice instead of thinking he is bigger than life

I would hope that after this poor display of marketing talent would keep PDiddy from directing any future commercials that end up on TV. Unfortunately, this 'scent' will probably do rather well at retail, and Puff John will claim success, leading to more abominations.

Ditech's Up Hill Battle

2007-06-04T17:37:00.000-07:00

In a difficult and last ditch effort to remain afloat, Ditech home mortgages is attempting to move up the brand ladder and position itself as a mid-level mortgage company. In a market that almost evaporated overnight, the sub-prime mortgage market has been the target of many scathing reports on unethical practices and over-zealous business people.

It could be said that this is a move that will lead to certain failure, or at least a waste of money, as Ditech would fail to move up to a mid-tier brand in the mind of consumers. However, Ditech is facing a bleak future and is in a market that may take years to recover, if it ever does. This may be a last ditch effort of a dying company to stay relevant in a market that is no longer. Who knows, Ditech may be a brand brought back to ‘life’ it 10 or 15 years as many brand owners have done recently.

Elmer's Glue In A Sticky Situation

2007-05-20T19:28:00.000-07:00

Elmer's Glue just recently announced its newest product, Elmer's Ultimate High Performance Glue. Yes that Elmer's, the white glue that is consumed by 2 million kindergarteners in the US every year.

A brief overview of the battle between Elmer's and Gorilla Glue; starting when the Gorilla Glue company took a stab at the roughly $30 million dollar glue market with their "Toughest Glue on plane earth" claim. Elmer's felt this claim misled consumers and took the argument to the Better Business Bureau. Gorilla Glue took the stance that the claim is so broad that no consumer would actually believe that the statement was based on actual facts. Eventually the BBB ruled in favor of Elmer's and "recommended that the tag line be discontinued from packaging and other advertising." Gorilla Glue stated that it would appeal the ruling, however, eventually changing its tag line to read, "For the TOUGHEST jobs on PLANET EARTH."

The original campaign, however, laid the ground work for the perception that Gorilla Glue is indeed the toughest glue on the market. And in the mind of the consumer, perception is reality.

At the 2007 Hardware show, Elmer's Product Inc. announced that it was stepping up its fight against Gorilla Glue and launched a consumer branded "Ultimate Glue" and complete line up of home repair adhesives. There is no doubt that the amount of R&D put into this new line of "Ultimate Glue" produced the strongest glue on the market, but perception is still reality.

Elmer's Glue holds the glitter on preschoolers' mother's day cards and is used to build log cabins with Popsicle sticks. This is the perception of consumers, not that Elmer's Glue is going to hold together their latest weekend project or is the best option when the weekend warrior is re-caulking their bath tub.

There is no arguement here against the advertising campaign of going directly at Gorilla Glue with verified research and data to back up the comparison advertising. The problem lies with leading the brand in two directions. Is Elmer's Glue the tough stuff? Or is it the glue you want to let your kids play with? - It needs to be one or the other, the latter.

Elmer's Glue Print Ad

Consumers Don't Trust Private Label Brands

2007-04-24T14:02:00.000-07:00

Last month Branding Blabber covered the push from retailers to increase the market share of Private Label brands to upwards of 30%. A recent Brandweek article($) showcases research to be released by Alix Partners that finds that, in nearly every category of merchandise, consumers regularly are not trusting of Private Label brands. There are a few Private Label brands that don't adhere to this way of thinking, but most often, the Private Label brands fall into one of the top three least trusted brands in each category. This is on the heels of news from the Private Label Manufacturers Association's news that the number of shoppers that classify themselves as frequent buyers of Private Label brands has risen to 41%, up from 36% and 12% five and 12 years ago respectively.

Private Label Brands On The Rise

2007-03-20T11:32:00.000-07:00

According to the Private Label Manufacturers Association private label brands control nearly 21% of the market (units). Additionally, the goal of many retailers is to raise that to 25-30% and possible more.

Retailers are attempting to differentiate themselves from their competitors, just as brands compete, by limiting the overlap of SKUS on shelf. By gaining exclusive rights to products and brands, in addition to the growing number of private labels on shelf, retailers are able to give the consumer a unique choice of product offering. Granted, exclusive deals draw customers to the stores based on the brand recognition, but additionally, the unique products and offering helps position the retailer in the mind of the consumer. If Kohl's and Macy's carry the same product, the consumer would begin to have problems separating the two, but when Macy's starts carrying brands or products exclusively, these products help the customer see Macy's as different from Kohl's.

This trend towards private label may eventually lead to a growing separation between high price point and low price point products. Possible leading to two price points on shelf; a private label brand and a nationally recognized brand.

*Read more stats on private label brands.

It's Good To Be King

2007-03-08T17:49:00.000-08:00

Licensing has become more prevalent and accepted as a means for corporate brands to extend their brands into new categories. As these same companies continue to dish out marketing campaigns with figure heads and characters that become icons of their time, additional licensing opportunities become available. These opportunities help strengthen the marketing campaign and actual help recoup, at least some of, the cost of the marketing campaign.

Marketing campaigns have generated uniformly recognizable icons that consumers, brand champions and average consumers, recognize and relate to. These icons, such as the Burger King’s "King" character, have gone on to create licensing opportunities that drive products in front of consumers. Spawning everything from Halloween masks to boxers and underwear, the licensed products carrying the “King” character will garner consumer participation and interaction with the brand and the marketing efforts. (Making a splash recently, was Geico Insurance's Caveman campaign that has spawned a 30-minute TV pilot being produced and aired by ABC.) Additionally, the Burger King “King” character had its own MySpace page with over 100,000 “friends.” Not bad primary user interaction that strengthens consumer’s relationship with the brand and furthermore adds those primary “friends” as brand champions and advocates - a very desirable form of marketing.

Though not a method for creating a marketing campaign, both brand owners and advertising agencies should look for additional opportunities that consumers can interact with the brand and the marketing campaign.

Tissue Packaging: Time for a Change?

2007-02-12T09:40:00.000-08:00

Recently the chewing gum category has gone through a change and a revival. During the 1990s, the chewing gum category was slow and saw a negative Compounded Annual Growth Rate (CARG) for the last 5 years of 1990s. The use of the blister packaging commonly used for Dentine Ice and Eclipse gum created a buzz and sent the into a period of sharp growth. This strategic move to differentiate the products and new brands by their packaging fueled double digit growth since 2000.

Recently, the introduction of "fridge packs" by Pepsi-Cola and Coca-Cola has spurred the soda market. More so than the blister packaging, the "fridge packs" were design to get consumers to drink more sodas and thus buy more drinks. The problems with the old packaging was that it didn't fit conveniently inside consumers' refrigerators. Because of this, consumers would open the packaging and place a few cans inside the refrigerator and place the remaining sodas and box some place else; most likely either in the pantry or garage. Once consumers drank the cold sodas, they were not replaced by new beverages because of the inconvenience having to walk to the secondary storage place and back to the refrigerator. Because there were no cold sodas, consumers would be less inclined to have a soda and would move on to something else in the refrigerator. Thus the "fridge pack" was born and the entire container and all 12 sodas could fit conveniently in the refrigerator.

The packaging for facial tissues has not really changed over time; as it has slightly evolved from a rectangular shape to a more small, box-like container. The images on the boxes has evolved as well, now instead of a big brand name on the box, there is usually some sort of floral design.

As a way to differentiate itself from the competitors on the shelves of the supermarkets it is seemingly possible for a new container for facial tissues to grab the attention of consumers at the point of purchase. Maybe cylindrical packaging my spice things up or a more radical design with the use of holograms? Or possible a more permanent holder, with refillable tissue packages, one that resembles a flower or bouquet; here the tissue can be stored in the stem of the design and the tissue is released as part of the flower. What ever it is, new packaging could spur the market and differentiate a brand from the competitors.

Office Depot's Lame Response to the Easy Button

2007-01-29T07:35:00.000-08:00

We have already seen recent offensive and foul :30 spots in 2007 and Office Depot has wrung in the new year with a big misdirected and off-the-mark advertising campaign of their own. As Office Depot has recently began a campaign to counter Staples' Easy Button advertisements. The advertisements feature a box containing an arm protruding from the top and assisting people in situations where an extra hand can be helpful. The Easy Button campaign has been largely successful for Staples and the company has even sold millions of replica Easy Buttons.

This new campaign for Office Depot is not only disturbing it almost is laughable. Instead of store workers helping out customers, a box with an arm is doing the job. It almost feels like I'm watching a promo for the Adams Family with Thing, a servant in the form of a disembodied hand, doing office work.

How well does using a hand helping differentiate Office Max, or was it Office Depot, anyways, from its competition? Not very well. In the already commoditized market of office supplies, this new campaign doesn't help Office Depot set them self apart from the competition. This is something that their next campaign should focus on.

A big thumbs down for this campaign.

Rebranding Wal-Mart Green; The Right Direction

2007-01-20T17:15:00.000-08:00

With "Unruly Julie" out of the picture at Wal-Mart and the advertising campaign effectively treading water, Wal-Mart's brand is in disarray.

Before Julie Roehm left, the executives were attempting to make the brand more prestigious in order to compete with Target for the consumer with more disposable income than the average low-price shopper more commonly found at Wal-Mart.

Target has done an exceptional job competing against Wal-Mart as a big-box retailer by not going head-to-head against Wal-Mart, but rather by going after a different set of consumers. This set of consumers don't want to be known as cheap, but still wants to buy department store type products inexpensively. As Wal-Mart established itself at the "low-price leader," Target built a brand around trendiness and style.

Wal-Mart is trying to bring in customers that will buy higher priced items in an effort to raise profits for year over year same store sales. The retailer cannot stock high-end items that bring higher margins in the stores until they have a customer base that can actually afford such items.

Wal-Mart should steer away from trying to change they meaning of their brand as a low-priced retailer. However, Wal-Mart should highlight its effort to be environmentally friendly. By highlighting their efforts and making eco-friendly products hip, Wal-Mart can alter their brand and draw a more profitable customer into the stores. Instead of being thought of as a penny-pincher, those shopping at Wal-Mart will be known as environmentally friendly and "hip."

By not trying be more prestigious, but rather by highlighting its environmentally friendly products and stores, Wal-Mart can move in a new direction. Putting being known as "cheap" in the background and bring in more customers that have a higher level of disposable income.

Jack-in-the-Box Cuts the Cheese

2007-01-10T11:46:00.000-08:00

There has been some poor advertising in 2006 and we have started 2007 with a poor choice by Jack-in-the-Box's advertising agency, Secret Weapon Marketing, to tag the end of its most recent promo.

Jack-in-the-Box has started the new year with a campaign promoting a free upgrade to Curly Fries with the purchase of a combo meal. While I see nothing wrong with the campaign and promotions, the end to the :30 spot highlights an old man fanning a newspaper will chastising a dog for passing gas.

Now there is a poor connection, one that I would not want to associate with my next meal.

Best Brand Extension of the Year

2007-01-08T11:12:00.000-08:00

Energizer phone battery charger

First, I have a bone to pick. As BW/TS recently released their survey results of the best brand extensions for 2006, they left out some big products and touted winners that have no business being on the top. Now I know that the results are from a survey, but the results are tainted because of the design of the survey. How can you limit the number of great brand extensions to 5 and ask people to pick a winner. All the brand extensions should be listed and rated by everyone. Here is a link to the survey (it may only be up for a little while).

As for my Best Brand Extension of 2006, that would go to Energizer Energi To Go Instant Cell Phone Charger.

This is what I call a Power Brand Extension, the power has nothing to do with the part about the batteries, but rather the fact that this brand extension helps sell more of the core product.

Blockbuster vs. Netflix - More Comparison Advertising?

2007-01-03T17:59:00.000-08:00

Blockbuster has been playing catchup to the startup Netflix company for sometime now. As recent numbers released show, Blockbuster is making progress; even though both companies have shown near 50% increases in 3rd quarter revenue (Blockbuster's DVD mail division).

Recently, Blockbuster has come out swinging. Sponsoring Pre-game, Halftime and Post-game footballs shows for both college and professional. New :30. spots highlight Blockbuster as a superior choice to the rival Netflix because of the option for free in-store rentals. This campaign has definitely raised a few eyebrows and I predict will continue to shine strong for Blockbuster in 2007.

Comparison advertising for those companies trailing a category leader is nothing new. Recently I have highlighted Apple's comparison advertising and have talked about other notable comparison campaigns. It is worth noting that it is rare for a category leader to initiate or respond to comparison advertising as Anheuser-Busch did when Miller launched an attack/comparison campaign.

2006 lead to some spoof rebuttals for Apple's comparison advertising campaign on YouTube and other Internet video sites, but it is not commonplace for a category leader to acknowledge such a campaign because it only highlights the initial advertisements.

I believe however, that a rebuttal campaign might be necessary for Netflix, even though, according to a recent Forbes.com article, Netflix is the leader in the category with a customer base is 5.7 million compared to Blockbusters' 2 million online rental customers.

Being able to pickup and drop-off DVDs is something that Netflix can't do, but highlighting its strength of size and speed versus Blockbuster may stop the bleeding that Blockbusters' campaign may be causing. While stopping the bleeding is not the only thing that Netflix needs to do, establishing their own drop-off locations is something that needs to be addressed.

As it is the biggest competitor to both of these services is Video-On-Demand options that easily let consumers view/download the movies right to their TV. If both of these companies aren't addressing this problem then they are leaving themselves open for more competition.

Still Advertising a Printed Newspaper

2006-12-26T20:25:00.000-08:00

On television the other day, an advertisement was airing for the San Jose Mercury Newspaper. Touting it as an inexpensive option to other daily purchases, the voice over listed the benefits of the newspaper; "and all that for less than 50 cents a day."

In my opinion, it would seem the effectiveness of the advertisements to draw readers to the daily print paper would be minimal at best. It appears the way of the printed paper is dead and will continue to lose subscribers on an annual basis for some time to come. The money could rather be spent for some advertising and branding efforts for the Newspaper's online presence.

The newspaper company could probable make more money from online advertisements over the next 5 than compared to print. Additionally the branding campaign could help establish the newspaper's online presence for the local area.

Some Poor Combo Branding

2006-12-14T13:49:00.000-08:00

This past week, Combo snacks began a new advertising campaign. These advertisements depicted an over weight, 30ish male posing questions to his mother (who was actually a 50 something male dressed in women’s clothes). The careless “mom” practically ignored the childish son, but rather was enthralled by how they were able to get all the cheese in the middle of the pretzel. The tag-line being; “What your mother would feed you if she was a man.”

With all the advertising going on these days, I understand trying to carve out a niche market and trying to own a piece of the consumer’s mind, but really? The “food your mother would feed you if she was a man” is not a market that this snack company should be carving out. Campbell’s has done a good job using the mothers of NFL stars to sell their Hearty soups, but do so in a positive light.

America today is a health conscious consumer. I’m not only scared to look at the health facts on the back of the snack bag, but seeing two overweight men is not something that most consumers want to imagine themselves as; especially recalling the obesity when choosing a snack, either at the grocery or convenience store.

A much better branding route would be how impressed friends would be when the see the snack at a Super Bowl party or the great taste in one small Combo. How many pretzels do you see being advertised on television, not many, that’s the market to carve out… how about something along the lines of “It’s a pretzel with flavor” or “A pretzel never tasted so good.”

Own the pretzel market, not the overweight, unattractive market.

Comparison Advertising Done on a Mac

2006-12-05T09:57:00.000-08:00

Apple recently released a series of advertisements comparing the Macs against PCs. Along with revolutionary spots back with their first television commercial, Apple’s more recent iPod commercial advertising has helped strengthen its image of a company that doesn’t align with the masses and helps people to express their true personalities. In past, comparison advertising has helped other companies position themselves against the leader in the industry, just as these new ads help strengthen Apple’s brand as an alternative to PC computers.

In recent years, Miller beer has run attack ads against Anheuser-Busch, the maker of Budweiser and other beers, by touting that Miller had half the amount of carbs as Budweiser and that Miller tastes better according to a taste test. These commercials in turn received attention because Anheuser-Busch did something rare as the industry leader, it responded with its own line of ads taking direct aim at Miller. Usually the industry leader will not acknowledge the comparison advertisements publicly because it just further helps gain publicity for the smaller company.

One of the more famous comparison advertisements campaigns was when Avis launched its “We try harder” campaign in the early 1960s. With Hertz as a clear leader in the industry, Avis tried to answer the question that consumers had to be asking themselves, ‘Why rent from Avis?’ Avis conveyed that because it wasn’t the leader in the industry, the company couldn’t afford any mistakes that would leave the customer dissatisfied with their service. Avis made it clear to consumers the differences between itself and Hertz and the results were impressive. This branding effort helped Avis tripled their market share in five years and established itself within the industry.

In a style only Apple could pull off, these commercials have two actors representing Mac and PC computers as they discuss how they deal with common issues known to occur on the more popular PCs and how the Mac handles more difficult problems with ease. By simplifying the representation of computers, Apple is able to clearly state why the Mac is more user friendly and less problematic then the industry leading PC platform. The commercials help answer the consumers question ‘if everyone else uses a PC, then why would I want to buy a Mac?’

Apple’s campaign takes direct aim at its only competitor and industry leader. These advertisements help build on the frustrations of many PC users and identify why so many consumers have taken to the ease and simplicity of the Macs. By making the direct omparison, Apple has helped strengthen its brand as a company of self expression and simplicity.

(You can watch a few of the ads here)

Choosing a Brand Name

2006-11-18T12:34:00.000-08:00

(To preface this post, a brand that is first to market has an easier time positioning itself in the mind of the consumer, with that being said…)

When it comes to choosing an identity for a company that provides some sort of service, a name can play a major role in setting a company apart from the competition. By looking at two major categories in the international market place, delivery services and Internet search engines, one can see how a name helps capture and replace a word in the mind of the consumer.

Now when a company provides a service, a brand name can be used as a verb. And if a companies name is easier to use than a competitors’, an advantage is created. Think of a company that provides a service, then ask this question, “How does it sound with the word ‘it’ afterwards?” Yahoo it, UPS it, they sound ok, but Google it, and Fedex it roll off the tongue a little easier. Think of some of the other competitors in these categories, AskJeeves and DHL. These brand names don’t work well as verbs either.

A major feat in the branding process of a company is to have the brand name replace or identify the category of which the company resides. To take that one step further and have consumers use the name of a company as a verb helps to create an established brand name and build the brand into the vocabulary of masses.

MasterCard’s Priceless Contest

2006-03-08T07:45:00.000-08:00

Back in 2000 when .com television spots led the charge during the Super Bowl, the advertisers attempted to use clever tactics and competitive advantages to steer consumers to the websites that they were advertising for. Blowing two million dollars on a thirty second spot was a chance for those created by the hype to hit the big time. With the internet being a relatively new avenue for commerce, this may have worked for few advertisers, but now everyone, and there grandmother, has a .com website.

In today’s market there needs to be more of a draw to bring someone to your website and advertisers are stepping up the ante after more and more people see the advantages of using the internet as an interactive marketing tool. The two commercials that MasterCard ran during the 2006 Oscars urged people to write their own Priceless commentary for a MasterCard commercial. Sending viewers to their website priceless.com, MasterCard setup an avenue for establishing a relationship with the viewer to look for upcoming commercials, whether it be to see a winner, or possible their own commercial.

Using the Academy Awards as the launching point for this ad campaign was a prime choice for MasterCard to start this Priceless promotion. Gearing the ad to those who are enthralled by the Hollywood persona would brag to their co-workers, family, and friends if they have a commercial airing on TV. MasterCard’s Priceless promotion is a look into the future of how advertisers are going to use forms of interruption media and transform those views into measurable hits on the Internet’s interactive arena.

*See the MasterCard commercials here.

American Express’ newest “My Life. My Card.” Commercial

2006-03-07T09:43:00.000-08:00

American Express’ newest “My Life. My Card.” commercial that aired during the Oscars. This commercial starred Hollywood director M. Night Shyamalan, who also directed the two minute flick.
*Watch it here on Ad Blabber.

This commercial goes to show how interruption marketing has caused commercials to gain awareness by using a majority of the length of a spot to grab viewers attention. While only a small portion of the spot is used to sell an actual product. In this example, American Express spends 112 seconds of the 120 to grab attention, while the American Express card logo or name doesn’t appear until there is less than 10 seconds left.

At a going rate of $1.7 million per 30 second spot during the Academy Awards, American Express spent $6.8 for the two minute commercial. That means Amex spent over 6 million in media spending to grab viewers attention and just over half a million for brand awareness.

This commercial demonstrates the trend of advertisers using more and more money just to get consumers’ attention, while less time is being used to sell a product or service. In today’s market, companies are forced to use varying forms of Advertainment to reach consumers, just to sell a product or company for a matter of seconds.

How to make KFC's Slow-Mo Promo Work

2006-03-01T22:12:00.000-08:00

So you’ve probably heard about this already, KFC is going to offer a free Buffalo Snacker coupon code to those who view the KFC ad in slow motion on a DVR. The offer isn’t that great and it won’t work in the future unless GREAT deal is offered. The best part of this offer for KFC is the free publicity that they are receiving. Think about it, the Buffalo Snacker is a .99 cent product, not too great of a savings. Sure you might get some additional sales from the people that actually look for the coupon and visit KFC.com. Right now, millions of people are talking about the offer, most of them will not even see the commercial, and even less of those who do will go to the website and print it out.

Okay, so in the future, say something worth while is offered… how long does it take for one person to post the code on the internet, anyone could search for the code and find it on the internet.

When a car company gets a hold of this idea, then your talking. You’ve got a double bonus here. Say for instance Ford and NBC team up to promote a new television show (or an old one for that matter). Every week a code is given out during the show. You can then go to NBC.com/Ford and punch in your code each week for up to one hour after the show. There are a couple tricks that can be thrown in, only one of three ads running during the show display a code, or all three. After the code is submitted on the website, the ‘contestant’ must wait for an email that has a quiz about the show or about the Ford vehicle that was used in the episode.

By further involving the ‘contestant’ with a dialog, the advertiser is engaging the consumer with Permission marketing through Advertainment. This form of Permission marketing via the avenue of Advertaining will help increase brand awareness, television ratings, and in the long run, sales.

Branding the Mega-Brand (Part one of two)

2006-02-20T12:22:00.000-08:00

As 2006 has moved half way through its second month, AT&T has continued to establish itself as a “new” player in the international communication category.

SBC and AT&T should have taken a lesson from the former Bell Atlantic Corp. and GTE Corp, not to say that they have done anything wrong, yet. Official joining in July of 1998 and formally taking the Verizon name on April 3rd 2000. This major merger of two multi-billion dollar international companies created Verizon as it is known today. This was done on many fronts, but two stand out. The first was the choice of a name. Because neither of the former companies had a name on which to build a mega-brand, a new name was chosen, Verizon. A good choice, clear, denotes opportunity, and contains and draws from a well know, positive root word. Breaking the new name down further, it has three syllables and is in a single word form. This makes for the brand name to roll off the tongue of consumers being short and to the point, while there isn’t the chance that some executive down the line will attempt to shorten the name into abbreviations (as one of it predecessors had the ill fate of, in addition to the topic brands SBC and AT&T).

The second success of Verizon’s mega-brand building experience was establishing itself as the “Network.” Targeting this position in the market allowed Verizon to capture the market of frustrated consumers who were having difficulty during the times of old analog wireless networks. Taking this word and essentially replacing it with the mega-brand name Verizon created the key recognition in the industry. Regardless of actual network dependability, consumers began to equate Verizon as the wireless carrier with the best coverage.

To be continued…