Month: August 2014

COKE BUYS MONSTER-A NIGHTMARE FOR RELENTLESS AND BURN?

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To buy or not to buy. That is the question.

Apologies to the Shakespeare aficionados amongst you for the blatant bastardisation of perhaps the bard’s most famous quote.

However, it is a question that many corporations often ponder (presumably with a copy of Hamlet to hand) when considering how to defend themselves from a young upstart in their industry, or when judging how best to enter a new market. Do you pour your resources into building a brand, or do you save yourself the hassle and buy up a rival?

The former seems exciting, and the creative amongst you wouldn’t undoubtedly be chomping at the bit to launch a new brand with all the vim and vigour of a start-up. Yet a new brand is unproven and unfamiliar to consumers, and with this comes an inherent risk of failure. The alternative, buying another company outright means you acquire a key strategic asset in their brand. A proven, ready-to-market brand with an identity in consumers’ minds and a consumer base with which it resonates is surely an enticing prospect. But such acquisitions do not come cheap, and thoughts immediately go to how best reclaim the significant investment.

These musings were undoubtedly swirling around the minds of Coke executives when they decided to purchase a 16.7% stake in Monster, the energy drink brand, a few weeks ago for $2.15bn (£1.28bn). The move will be great for Monster, who will surely benefit from Coke’s behemoth global distribution network. Coke will probably do well out of a stake in Monster too, which is the largest energy drink brand in America, and the only real global competitor to Red Bull.

But spare a thought for Relentless and Burn, the two existing energy drinks brands in the Coke portfolio. Much like a kid with a new toy, Coke has cast aside its existing play things and plumped for something new and shiny to take on the energy drinks market. In recent years Monster has powered ahead of Relentless in terms of market value in the UK (£108.1m vs. £59.9m) with Burn energy drink not even making the top ten. And with the positioning of Relentess, around the alternative music scene, feeling like a subset of Monster’s broader positioning around alternative music and sports, one wonders what the fate is for these lesser energy drinks brands within the Coke portfolio. Is there room for all three brands? Will they be repositioned, catering to an even smaller niche to accommodate their bigger brother? Or will they end up on the scrapheap, their assets consumed (ironically) by a turbo-charged Monster?

To me, the Monster brand has always felt more dynamic and exciting than its Coke contemporaries, with an underground grit that Red Bull had, but seems to have lost in recent years as it has gone more mainstream. So I approve (if they care) of Coke’s decision to buy, not build, its way to greater success in the energy drinks market. However, I suspect that Relentless and Burn will be sleeping less easily with this Monster nearby.

SAY IT SLOWLY: CHI-POAT-LAY

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Don’t you hate it when someone pronounces your name wrong? (Especially for me, because if someone pronounces Tom wrong, I’m pretty sure we aren’t going to get on).

US burrito chain Chipotle, who have recently opened outlets in London, have come up with a novel print and radio campaign to raise awareness:

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So now you know.

(Originally posted on The Value Engineers blog on March 26 2014)

PUMA STIRS UP TROUBLE FOR NIKE AND ADIDAS

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Ambiguity gets you nowhere. Clarity is key.

In marketing, it sometimes feels like the message communicated is almost irrelevant. It doesn’t matter what your brand stands for, so long as it stands for something. Creating a platform in which to speak to consumers enables you to speak authentically, with clarity, and memorably.

To this end, I am so glad with Puma’s recent advertising push. The advert, which you can see below, features Usain Bolt, Mario Balotelli and Rickie Fowler amongst others under the tagline “Calling all Troublemakers”.

The “Forever Faster” campaign is an attempt is to make Puma a disruptive, somewhat anarchic force in sportswear, and is a bold statement of intent to the troublemaker in all of us. This certainly feels like a stronger positioning than its previous “Worn My Way” campaign which, although interesting and reflective of a general cultural trend towards individuality, did not instinctively feel right for a sportswear brand. It had neither the punch of Nike’s ubiquitous “Just Do It” campaign, nor the true performance focus of Adidas’ “Strive for Eliteness” angle.

It will be great to see how much trouble (and success) this campaign can stir up for Puma.

 

 

PICK YOUR DEVICE, PICK YOUR PRICE

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This news article sparked my interest as it proposes an interesting way to segment your audience, suggested by the head of Dreamworks Animation.

The proposed idea is that you pay different prices for films depending on the device you view it on. So buying a film to play on your smartphone will cost less than it would to play on your tablet, and much less than it would cost to play the same film on your TV.

I’m not entirely sure how this will effect behaviour (will consumers really see the value of paying extra to watch a film on their TV compared to their tablet?); and further I can’t quite yet see the feasibility of the pricing structure, especially given the fact that the market at the moment is trending towards seamless accessibility of content across multiple devices (e.g. you can download a film on your laptop and use Chromecast to watch it on your TV, or the music on your phone is automatically backed up and accessible on your tablet).

An interesting musing nevertheless, and it’s great to see innovative thinking when it comes to segmenting your audience.

(Originally posted on The Value Engineers blog on May 1st 2014)

DADVERTISING: THE RISE OF DAD

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In traditional advertising, Mum has been the focal point, seen as both the provider and carer for a (normally) unruly brood. Refreshingly, in recent time some brands have put Dad in this role, and below are a few adverts which I think have done this effectively:

Robinson’s Orange squash: Thanks Dad


Google Chrome
: Dear Sophie


Dove Men
: How to stay in Shape

(Originally posted on The Value Engineers blog on April 7, 2014)

 

THE PERFECT MARRIAGE- JOHNNIE WALKER AND MR PORTER

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I love it when a brand tie-up comes together.

When two brands that sing from the same hymn-sheet launch a campaign and creates something so perfect for their joint target audience that the credentials of each individual brand rub off and reinforce each other. Johnnie Walker Blue Label and Mr Porter are just such brands.

Johnnie Walker Blue Label is the most premium whiskey in the Johnnie Walker range, a blend of the rarest Scottish whiskies which create “an intense, rich, deep and multi-layered experience.” Mr Porter is a global men’s fashion online retailer, specialising in high-end designer brands including Burberry, Alexander McQueen and Gucci.

The two brands have come together to produce this short film, which you can view here, starring Jude Law and Giancarlo Giannini called “The Gentleman’s Wager”. It tells the story of a man who can buy anything he wants challenging himself to create an original performance for the chance to win a money-can’t-buy item. Firstly, the film itself is great- a high-quality piece of cinema, beautifully shot and starring two acclaimed actors. Secondly, it’s interactive- whilst watching the video, fans can buy the clothes worn in the film and “Shop the Look” via a specialised page on the Mr Porter website.

But for me the true success comes from the fact that the two brands link up seamlessly to tell a complete story. Both brands are targeting the same consumer- a sophisticated, middle-aged man with a medium to high disposable income, yet they are not in competition with one another. They are in fact two complementary components of this target consumer’s lifestyle. You can just imagine a man pouring himself a tumbler of Johnnie Walker Blue Label whiskey, before settling down to check out the latest blazers on Mr Porter. The brands work together so well because they complete the picture- encouraging their target consumer to buy into that lifestyle by buying both the whiskey AND the clothes.

Marketers take note- when considering strategic brand tie-ups, think carefully about your target consumer’s lifestyle, and what other brands fit in it.

RETAIL MEETS DIGITAL

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The integration of technology into the retail space is an increasingly compelling prospect. Although some retailers fear that sales in their stores are being lost to their digital equivalents, others are beginning to appreciate that e-commerce need not be a threat. By welcoming e-commerce channels as an asset, along with other digital concepts, brands should able to enhance their overall offering.

Luxury fashion retailer Burberry has been at the forefront of the digital retail charge, and is clearly reaping the benefits. Perhaps a huge complement to Burberry’s digital strength came last year, when it announced their CEO, Angela Ahrendts, was leaving the company to become senior vice president for retail and online stores at Apple. Regardless of the products they sell, all retailers must have an appreciation for digital, and serve customers who are increasingly adept at shopping online. Ahrendts has noted that her digital strategy for Burberry has been informed by Apple, who she identifies as a business contemporary in some cases more closely than typical peers Gucci and Chanel: “If I look to any company as a model, it’s Apple,” she said. “They’re a brilliant design company working to create a lifestyle, and that’s the way I see us.”

Burberry is a case study in combining digital and offline to create a profitable model. The brand has nearly 15m Facebook ‘likes’ and 1.5m Twitter followers, yet their digital engagement amounts to so much more. Not only have Burberry moved into the digital space, but they have also moved the digital space in store, introducing a whole host of interactive digital concepts which subtly and intuitively enhance the customer experience. Notable successes have been the live streaming of their catwalk shows, which enabled customers to buy what they see; the social media site The Art of the Trench, which enables customers to submit pictures of themselves in their Burberry trench-coats, and connect with other trench-coat lovers, as well as their use of RFID (radio-frequency identification) technology, which is particularly inspiring. A chip placed into each product triggers RFID-enabled mirrors in changing rooms to transform into digital screens, displaying information about the craft and detail of the garment being tried on. This gives customers the added bonus of more product information in a fantastically intuitive way.

These digital concepts work with, not against their stores and general offline offering. They enhance the customer experience in store by appreciating how their customers shop and want to interact with the Burberry brand. Having an appreciation for e-commerce and utilising it effectively to increase revenue is not a new trend, but integrating digital with a light touch to improve the customer experience seems increasingly prevalent in the marketplace, especially as the wider population are becoming increasingly tech-savvy and unafraid to interact with brands online. Ironically, such a tactic could well preserve the high street and enhance the shopping experience. It is certainly an exciting direction for retail to be heading.

(Originally posted in The Value Engineers blog October 18th 2013)

WHAT’S NEXT FOR MALAYSIA AIRLINES?

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MH370 and MH17. Two flight names that have been at the heart of two disasterous events and have scarcely been out the news over the past few months. The disaster of flight MH370 put Malaysia Airlines squarely in the global spotlight, and the events of the MH17 flight over Ukraine kept it there.

Much has been said about the impact these two events have had on Malaysia Airlines- their share price has collapsed and they have suffered a significant drop in ticket sales. Although the loss of MH17 was not due to a mechanical fault but rather terrorism, the suspicion is that many business and leisure passengers will ultimately fear boarding a Malaysia Airlines flight in the future, and avoid flying with the airline completely. Regardless of the logic behind this behaviour, how does the Malaysia Airlines brand recover when consumers now have such a strongly negative association with it?

To me, they have two options: either Malaysia Airlines scraps the brand totally and reinvents itself, or they keep the brand and seek to rebuild trust and credibility in their carrier. Neither option will be easy or come cheap. Although it may initially seem simpler to reinvent an entirely new brand, the Malaysia Airlines brand is so historical, well-established and (regrettably) far too famous given recent events for it to viably disappear quietly into the ether and return under the guise of a new brand.

So it looks like they need to engage in an intensive rebuilding campaign centred around trust, safety and reassurance. It will take time and money- neither of which are in good supply if Malaysia Airlines’ financial reports are to be believed. Cost-cutting measures to fill planes is a short-term solution, but ultimately it may still prove ineffective if passengers feel they are sacrificing their safety in exchange for cheaper flights. The battle will ultimately be won through long-term brand building. Let’s hope that Malaysia Airlines will be afforded the time to convince passengers to fly with it again.

 

FANCY GRABBING A COFFEE BY THE FROZEN PEAS?

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Shopping at the recently revamped Tesco Extra store in Watford is an experience. The vast 80,000 sq. ft store has been completely renovated to include outlets from Tesco’s expanding portfolio of investments, including Harris + Hoole and Giraffe, as well as a complete reconfiguration of its overall store layout. Tesco is expressing clear intent here, repositioning stores as destination zones, where customers can go to grab a coffee and socialise, instead of just doing a weekly shop.

As such, Tesco aims to offer customers another purpose to visit the store, and hence profit from new revenue streams. Integrating technology into the shopping experience is also apparent here with, amongst other things, digital screens showing enticing cocktail recipes in the drinks section, and a misty, Alien-esque cooling system for the fresh vegetables. I liked the use of digital services such as Click & Collect and Scan & Go in store which integrated the online and offline shopping experience too. Yet what struck me most whilst walking through the store was the definition of the layout, which gave the impression of walking through a bustling town centre instead of a giant supermarket.

The clarity of these spaces generated a sense of variety which maintained interest throughout. And this is exactly Tesco’s intention. This “store of the future” feels like a reaction to the trend of consumers shopping online more and more, and in store less and less. Increasingly, online shopping is offering consumers a more convenient way to shop, and as such, bricks and mortar retailers must look to generate an experience for shoppers that adds value and makes them want to come in store. Whether transforming a food shop into a richer experience will prove lucrative for Tesco remains to be seen. However, retailers could do worse than look to Tesco’s “store of the future” for inspiration.

(Originally posted on The Value Engineers blog on September 13, 2013)

THE BLURRING OF OFFLINE AND ONLINE SHOPPING

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So, what to make of the news that eBay and Argos have decided to team up and offer customers the ability to order eBay goods online and collect them from an Argos store? The tie-up of these huge retailers is an exciting proposition, with both companies seeking to utilise each other’s points of strength to create a more well-rounded shopping experience. eBay will benefit from the vast network of physical Argos stores, whilst Argos will be able to leverage eBay’s expertise in online retail to boost its own online offering.

eBay are looking to humanise their shopping experience which until now has been almost completely online and offer their customers a physical point of contact when visiting an Argos store. The benefit of this is two-fold: eBay shoppers will not have to wait for their purchases to be delivered, and instead can collect them from an Argos store when convienient. This will surely be a welcome relief to those who have spent countless hours hanging around for the delivery man. Another weak point of online shopping currently is the inconvenience of returning unwanted goods. How many times have you kept something you bought just because it was too much hassle to send back and get a refund? Having a physical store will certainly make it easier to return items and for eBay to keep its customers happier.

And how will Argos benefit? The connection to the eBay brand will undoubtably add credibility to the Argos’ online offering, who themselves are operating successfully online but are traditionally seen as an offline, bricks-and-mortar retailer. The stream of eBay shoppers collecting their goods in-store will undoubtedly drive more potential customers into Argos stores too, who may previously have not considered shopping at Argos.

The key motivation of this venture for both companies stems from their competition with online behemoth Amazon. Both companies consider Amazon, albeit from slightly differing perspectives, as a serious competitor, and this joint venture could prove to be the first real challenge to Amazon’s dominance in the online space. By providing a physical point of difference and an opportunity to interact with consumers in the offline world, eBay and Argos can offer consumers a certain human interaction which Amazon currently does not. It certainly looks like in the case of the online shopping experience, two brands may well be better than one.

(Originally posted on The Value Engineers blog on September 26, 2013)