In one svelte move, JC Penney launched near-total, point-by-point repudiation of ex-CEO Ron Johnson’s attempt to turn the retailer into a chain of Apple stores.
Let’s dissect this one …
In one svelte move, JC Penney launched near-total, point-by-point repudiation of ex-CEO Ron Johnson’s attempt to turn the retailer into a chain of Apple stores.
Let’s dissect this one …
According to a YouGov.com survey reported by NBC News …
Survey says: 4 in 10 Americans wouldn’t mind being publicly weighed at the airport.
The results suggest that a once-unthinkable concept of differential fares based on size could become a fact of life for fliers.
Here are some verbatims:
According to BrandChannei …
“Richard the Cat, a.k.a., Pundit of People, remains Home Depot’s meme of choice as the brand welcomes spring some out-of-character humor.
The orange feline follows a human family as they pursue scores of DIY projects with questionable results and predictable mishaps.”
“Everyone has elves, reindeer, Santa, but one of the biggest things followed in the social space is cats”
HD is taking a chance on the cat meme since the two are an odd pairing.
The Home Depot brand is authentic, innovative and attainable, while Richard’s cat-sona is sarcastic, superior and refined.
HD’s CMO says: “When I shared this with our leadership team, our CEO got it immediately.
We’re very lucky we have one of the hippest CEOs out there.”
Here may be the rub for Home Depot …
Ostensibly to see if its sponsors’ ads are working.
But, some skeptics (e.g. me) think that there may be other motives, too.
Here’s the scoop.
Last year, Facebook entered into a partnership with a company called Datalogix.
Everybody knows what Facebook does.
Datalogix, not so much.
Datalogix is a firm that records the purchasing patterns of more than 100 million American households.
When you stop by the supermarket … you probably hand the cashier a loyalty card to get a discount on your items.
That card ties your identity to your purchases.
Your sales data is sent over to a server maintained by Datalogix, which has agreements with hundreds of major retailers to procure such data.
Facebook and Datalogix … why the hook-up?
OK, I think this case is now officially done.
It started a couple of weeks ago when Iposted Why don’t airlines charge more for these bags?
Specifically, I suggested that airlines charge passengers by weight: a base ticket price for the first 175 pounds and then $75 for each 50 pounds (or portion thereof) over the limit.
I thought I was on safe ground since a survey done for the travel website Skyscanner reported that 76% of travelers said airlines should charge overweight passengers more if they didn’t fit in a seat.
But, the idea went over like a lead-butted balloon.
Turns out that, as usual, we were just a bit ahead of the times.
Yesterday, we reported that Samoa Air became the first airline to start charging by the pound.
For details, see Samoa Air: Pricing by weight is the ‘concept of the future’
Now, even politically correcct academicians are hopping on the scale. A Norwegian economist has suggested — in a prestigious academic journal — a “pay what you weigh” pricing plan that “would bring health, financial and environmental dividends.”
Here’s the skinny on his program …
Once again, coincidence strikes.
This week in class we’re doing a a case about a company trying to launch an innovative refrigerated pizza.
Guess this is innovative pizza week.
Leading the charge: Little Caesars
According to the Huffington Post, Little Caesars — “more known for value than taste” — is launching a big new “higher end” product called the DEEP! DEEP! Dish pizza.
The new pizza is “Detroit-style” — a thick, square-panned pie that’s crispy on the edges, but has a soft, chewy middle.
No kidding, the company is calling it “the biggest product introduction in the company’s 54-year history.”
I can remember sucking down Uno’s deep dish in Chicago 40 years ago … and, I was a late-adopter.
I guess that some innovations diffuse through the market at a slower rate than others …
P.S. “Detroit-style pizza” … you gotta be kidding me.
In recent years, airlines nave become masters at “unbundled pricing” … offering a low base fare and then charging more for bags, heavy bags, priority boarding,window seats, bad sandwiches, soft drinks, blankets and, of course, reservation changes.
According to CNN: Baggage fees alone generate more than $3.3 billion each year, and fees for reservation changes add almost $2.5 billion.
Annoying, for sure … but also a good source of revenue.
According to watchdog group ProPublica, colleges are starting to adopt the airlines’ pricing playbook.
Specifically, ProPublica says that student fees have become a kind of “stealth, second tuition imposed on unsuspecting families.”
And though their names can border on the comical — i.e., the “student success fee” — there’s nothing funny about how they can add up.
Such fees are on the rise on many campuses.
Here are some specifics:
A couple of weeks ago – reacting to SWA charging for an overweight bag – I asked the question:
If airlines charge for overweight bags, why don’t they charge fore for overweight passengers? After all, a pound is a pound is a pound.
Specifically, I opined:
There’s a societal cost to somebody’s ample butt hanging over onto somebody else’s seat.
Here’s a novel plan: how about a base ticket price for the first 175 pounds and then $75 for each 50 pounds (or portion thereof) over the limit.
Price the human heavyweights,well, just like the overweight bags.
Then, rent the seat belt extenders for say $20.
Profit improvement for the airlines and major step forward in the war on obesity.
As President Obama likes to say: “It’s common sense.”
I took some heat for the idea but at least one airline thinks we’re onto something.
According to The Guardian, Samoa Airlines the first-mover to tilt the scales in favor of fit & trim passengers.
Here’s the skinny on the Samoa Air plan …
In one of my classes we study how books are priced.
One team suggested that page count was a relevant criteria … that books with more pages should be priced higher than shorter books.
I summarily rejected the idea and joked at the team’s expense.
Well, the page has turned.
The team went to China and sent me me this picture.
Lo and behold, in China, they encountered book stores that sold books based on their weight.
A counterfeit version of the Steve Jobs biography (above) weighed in at 360 grams, and was priced by weight at 18 RMB ($2.85). Roughly 50 RMB ($8) per kilo.
The team tells me that all paperback books in that particular shop (located on Nanjing road, main street Shanghai) are sold at this rate; hardcovers are also priced by the kilo but at a higher rate.
OK guys, you get the last laugh.
Thanks to Ash Kaluarachchi & Greg Berguig for feeding the lead
T-Mobile has ditched Carly Foulkes – the pink clad hottie that’s been the star of their ads for the past couple of years.
You’re probably wondering: why the heck would T-Mobile do that?
Blame it on the market research geeks …
Harrah’s is a poster child for “predictive analytics” … using hard numbers to make good decisions.
Why then – asks the IO Creative Group of tiny York, PA – did the Las Vegas big boy casinos lose over one billion dollars.
According to IOCG, casinos attendance is up, their hotel stays are up, their night club business is up, restaurant and bar sales are up.
How could their profits be down by one billion dollars???
It is because of their belief that new customers were in order – which attracted a lot more customers who are completely NOT PROFITABLE.
These new Vegas fans sleep all day, party all night and do not gamble. They don’t shop nor do they utilize the services and amenities of the buildings.
Vegas became married to the idea that their money should be invested in attracting new younger, hipper, sexier customers and they achieved that.
What they failed to do was to invest in their current very profitable customers who were actually making them money.
Casinos got caught up in the “shiny object syndrome” – the need to go after something new when their most profitable market was already right in front of them.
When they were going after completely new markets, they should have been further investing in the one they already had.
* * * * * *
IOCG offers up a couple of ways to increase current customer “monetization”:
Interesting piece on Forbes.com …
Punch line: There’s added pressure for the Hoyas in the Tourney this year.
They have to avoid the unfortunate early losses of past years and go deep into Tournament in order to protect the image of the New Big East (aka. Catholic 7)
Of course, my favorite parts of the article:
What do actor Zach Galifianakis and the cast of “Duck Dynasty” have in common?
They could be the new pitchmen for Twinkies and other beloved Hostess snack brands.
And, there’s more to the marketing plan …
Malcolm Gladwell gave us Tipping Point.
Now, Prof. Jonah Berger from Wharton hopes to catch a wave with a new book: Contagious: Why Things Catch On.
Berger says you need 6-elements – or STEPPS – to boost your odds of going viral:
One of the book’s examples is BlendTec – a blender company that we posted a couple weeks ago in an article worth reading (again): Marketing ROI: What you get for $300 million … and for $10.
For more, click to see a 15 minute interview with Prof. Berger.
According to brandchannel.com, “New Pope Means New Brand for Catholic Church” …
While the white smoke billowed out into St. Peter’s Square and Pope Francis was introduced to the world
… the Catholic Church’s legal team was busy behind the scenes protecting its intellectual property.
The Catholic Church is as much a business as it is a religious beacon, and like any smart business, the Church protects its intellectual property.
Here’s how …
On the road this week … savoring the joys of air travel.
Stop #1: Southwest’s curbside check-in.
Guy in front of us had one of those “c’mon man” moments.
His bag weighed in at a couple of pounds over the 50# limit.
The skycap – a very nice guy – explained that he’d have to take a few things out of his bag to sneak under the weight limit or shell out 75 bucks – roughly $25 per pound – for the excess.
The guy started rifling through his bag and made weight.
Of course, the incident got me thinking …
Here’s an interesting play ….
Northern Virginia schools are closed today because of the threat of a snow storm.
So, Pizzeria Uno sent an email announcing a special “Snow Day Deal” … free meals for the school-cancelled kids … (with a matching adult paying full fare, of course).
Question: Wonder if Uno’s will get sued if some jabrone drives off a slippery road coming to score some free chow for his kid?
According to several sources …
The 2014 World Cup in Brazil is set to be the first to offer special seats for obese fans.
It will be the “first time tickets for obese people are offered at a FIFA event.”
FIFA said that to qualify for a ticket, people are required to submit a medical certificate that proves they have a body mass index of 30 or more.
Here’s the kicker …
$1.6 million … that’s what advertisers shelled out to be on the Oscars.
Wasf it worth it?
Here’s the AdAge recap of what some major marketers did with their time during the broadcast.
Who else did AdAge highlight?
The Academy Awards show hit a ratings high of 55 million in 1998, the year of Titanic, but have been on a decline ever since.
To attract younger viewers and to reverse the trend, the Academy made two bold moves.
OK, what was different this year?
On Sunday, Business Insider ran a piece called The Most Infuriating Paragraph You Might Ever Read About The Healthcare System
It referenced rants on “Steven Brill’s epic cover story for Time on why healthcare costs so much.”
The paragraph that set them off from the Brill article should – according to Business Insider — “legitimately get anyone’s blood boiling.”
By the time Steven D. died at his home in Northern California the following November, he had lived for an additional 11 months. And Alice had collected bills totaling $902,452. The family’s first bill — for $348,000 — which arrived when Steven got home from the Seton Medical Center in Daly City, Calif., was full of all the usual chargemaster profit grabs: $18 each for 88 diabetes-test strips that Amazon sells in boxes of 50 for $27.85; $24 each for 19 niacin pills that are sold in drugstores for about a nickel apiece.
There were also four boxes of sterile gauze pads for $77 each. None of that was considered part of what was provided in return for Seton’s facility charge for the intensive-care unit for two days at $13,225 a day, 12 days in the critical unit at $7,315 a day and one day in a standard room (all of which totaled $120,116 over 15 days). There was also $20,886 for CT scans and $24,251 for lab work.
As for why we can have a system where diabetes-test strips are sold for $18/each in one place, while Amazon sells a box of 50 for $27.85, see this, great piece by Sarah Kliff on the lack of price controls in the US.
My opinion: Apparently these guys have never heard of “absorption costing” or bothered to really ask “why is healthcare so costly?”
Marker’s Mark Bourbon may have made the single dumbest marketing decision ever.
They decided to stretch short supplies of Maker’s Mark by diluting it … by literally adding water.
The company must have been inspired by either:
(a) millions of teenage boys who replenished their dad’s whiskey bottle by adding water after taking a swig, or
(b) Chris Rock’s hilarious minute-long bit on ‘Tussin … which is guaranteed to make you chuckle.
If you run out of ‘Tussin, no problem.
Just put some water in the bottle and shake it up.
Just like that … mo’ ‘Tussin … mo’ ‘Tussin
* * * * *
OK, back to the Maker’s Mark story …
By now everybody has probably heard that Maker’s Mark bourbon got themselves into a bit of a mess.
The primary cause: runaway sales.
Why’s that a problem?
Well, bourbon whiskey takes a few years to age … and a couple of years ago, Maker’s Mark management bet the under on future demand and didn’t start enough MM flowing through the distilling process.
So, Maker’s Mark can’t meet the market demand.
They can ramp up production, but the new brew won’t be ready for 6 years.
So, what did the jabrones decide to do … and why is it a problem?
In the old days, I didn’t know that the Girl Scouts mission was building “courage, confidence, and character”.
I thought that they were just a highly efficient cookie distribution outfit … good marketing, highly effective sales force, and low cost delivery system.
Well, the Girl Scouts aren’t resting on the laurels.
Girl Scouts of the USA has revamped its business approach, taking innovative measures to broaden customer access and overall appeal.
These girls will stop at nothing to make their sale.…
One of my favorite sports’ movie scenes is from “Major League”
Newly hired manager Lou Brown is chatting with the Indians’ general manager.
One of the team’s players –Roger Dorn – pulls up in a fancy ride, hops out and unloads his golf clubs.
Brown says to the GM: “I thought you didn’t have any high-priced talent.”
The GM shoots back: “Forget about Dorn, he’s just high priced.”
Lou Brown almost fell for a common trap …
Sometimes people do perceive that higher priced products are better – even when they’re not.
They’re subconsciously using price as a “quality cue”.
Here’s some research that supports the dynamic …
In other words, techniques that make it practically impossible fo a buyer to ascertain the real economic cost of a product.
Here are some of the ways that sellers shroud their prices to flatten your wallet …
Well, not really … but it sure sounds like that..
Working with celebrities used to be a simple matter.
Marketers would write a big check for a star to perform a specific purpose — for Olympian Mary Lou Retton to grace boxes of Wheaties, or for model Cindy Crawford to don short-shorts and sip Pepsi.
Now, according to AdAge, brands aren’t just featuring celebs in marketing campaigns — they’re giving stars a place in the marketing suite.
Big brand names are going beyond celebrity endorsements and hiring celebs for actual marketing jobs, giving them titles like Brand Manager, Creative Director, and even CMO.
Here’s what’s happening … (more…)
No it’s not a coincidence.
It’s called “product placement”.
Back about 25 years ago, I was at Black & Decker and my marketing team was on the leading edge of product placements – paying to get our stuff into TV shows and movies.
Our big score was getting Marty to ogle over a Dustbuster in Back to the Future – Part 2.
Now, is iit just me, or is product placement out of control?
ABC, NBC and IFC are taking product placements up a notch in their prime time network shows.
Here are some examples …
OK, so you have to go to India … it’s technically a Maharaja Mac, not a Big Mac … and, the cheap price is driven by relative currency values.
Still, one of my favorite price indices is the Big Mac Index … it compares the currency adjusted price of the burger across the globe.
According to Ryan Avent, chief economist at The Economist …
The Big Mac index is based on an economic theory called purchasing-power parity (PPP), which indicates that over a long enough time exchange rates should adjust so similar goods cost the same across countries.
The index reveals that, at market exchange rates, the price of the same McDonald’s burger can vary vastly from country to country.
I’m lovin’ it ….
Awhile ago, we reported a study that consumers almost invariably pick 33% more stuff than a 33% price discount.
Consumers are notoriously bad at spotting real values. Why?
According to the Atlantic ….
More specifically, here are some more ways consumers end up paying too much …
Oreo’s quick thinking during the infamous Super Bowl blackout generated a spontaneous twitter ad that caught the attention of millions.
Anyone watching the Super Bowl this evening saw a great game — and one of the greatest embarrassments in pro sports history: a power outage that halted play for a full half-hour.
As both teams, tens of thousands inside New Orleans’ Superdome and millions watching on TV waited, Oreo came up with an idea so brilliant and bold that it out and out won the night.
In his book, Priceless: The Myth of Fair Value (and How to Take Advantage of It), author William Poundstone dissects the marketing tricks built into menus—for example, how something as simple as typography can drive you toward or away from that $39 steak.
Here are some on the profit-enhancing menu tricks to watch for …
Earlier this week we posted that JCP CEO Ron Johnson insisted at an investor conference that Penney’s “marketing is really starting to connect” with customers … and that in 2013, Penney will become “a happening place.”
That was 2 days ago. Then yesterday …
According to USA Today: CEO Ron Johnson announced a strategic evolution to its plan to offer everyday low prices that customers could count on rather than the nearly 600 fleeting discounts, coupons and sales events each year.
What sort of “strategic evolution”?
According to the YouGov Brand Index annual survey, the winner is …
YouGov BrandIndex’s Buzz score asks respondents: “Have you heard anything about the brand in the last two weeks, through advertising, news or word of mouth?”
That’s a pretty wide net – can be positive or negative – but, it is certainly a measure of “buzz”.
Here are the rest of the Top 25 … many surprises …
In California, Two-Buck Chuck has been upchucked … from $1.99 to $2.49.
Is nothing sacred?
* * * * *
Here’s what’s behind the end-of-an-era pricing move …
According to George Parker of AdScam ….
At a conference a couple of years ago. GE and their agency, BBDO, made a presentation of their new “Imagination” campaign.
After showing some nice TV spots and explaining that they’d spent $300 million on media over the last year, they proudly declared that brand awareness had increased substantially.
This generated polite applause.
Next up was the Marketing Director of blender manufacturer Blendtec who proceeded to blend:
He then put up a single slide showing that every time they posted a self-produced, ten dollar video on YouTube in their long-running “Will It Blend” campaign (which to-date has had more than 220 million views,) sales went up by an accurately measurable percentage.
Understandably, the crowd went nuts.
The point being, GE spent hundreds of millions and couldn’t quantify with any certainty what they had achieved for all that money.
Blendtec spent pennies and achieved consistently significant and measurable results.
Below are links to a couple of the Blendtec videos … worth watching.
NPR says …
“Getting the results of a genetic test can be a bit like opening Pandora’s box … you might learn that you’re likely to develop an incurable disease later on in life.”
There’s a federal law that’s supposed to protect people from having their own genes used against them, the Genetic Information Nondiscrimination Act, or GINA.
Under GINA, it’s illegal for health insurers to raise rates or to deny coverage because of someone’s genetic code.
But the law has a loophole: It only applies to health insurance.
Some insurance can be denied or priced high because of a person’s DNA.
Here’s an example … and a prediction.
Punch line: Taking a page from Red Bull’s book, Axe launches a ‘Space Academy’ campaign, with a contest that sends winners on a space ship to the moon.
* * * * *
Excerpted from brandchannel.com’s, “Super Bowl Ad Watch: Axe Challenges Red Bull With Space Mission”
Axe has made its reputation with edgy advertising that makes no bones about why it believes young men should use it — to attract women to them as if they’re sexually magnetized.
Now, the Unilever brand is pushing the envelope just a bit more in two ways: …
According to Reuters …
The FAA has grounded Boeing’s 787 Dreamliner passenger jets while battery-related problems are investigated.
The plane has been plagued by recent electrical problems – raising concerns over its use of lithium-ion batteries.
Engineers and regulators are making checks – primarily to the plane’s batteries and complex electronics systems.
Here’s my take on the situation ….
Punch line: Major retailers are customizing online prices for each user, using users’ information (such as location) to determine different prices for identical items. The goal”higher price realization and higher profits.
* * * * *
Excerpted from WSJ’s, “Websites Vary Prices, Deals Based On Users’ Information”
It was the same Swingline stapler, on the same Staples.com website.
But for Kim Wamble, the price was $15.79, while the price on Trude Frizzell’s screen, just a few miles away, was $14.29.
Punch line: Coca-Cola is defending itself with a new TV Campaign that focuses on the health benefits of Coca-Cola’s products.
* * * * *
Excerpted from brandchannel.com’s, “Coca-Cola Addresses Obesity Critics With U.S. TV Campaign”
The Coca-Cola Company on Monday evening began airing a two-minute spot on U.S. cable news networks.
The subject, in a first for the company: America’s obesity debate, in a bid to defend its brands ahead of looming beverage size controls.
The world’s biggest beverage company debuted the “Coming Together” commercial in hopes of flexing its marketing muscle in the debate over sodas and their impact on public health.
The theme ties into the company’s “Live Positively” and “Open Happiness” campaigns.
Another ad, which will run later this week during American Idol and before the Super Bowl, is much more reminiscent of the catchy, upbeat advertising people have come to expect from Coca-Cola.
It features a montage of activities that add up to burning off the ’140 happy calories’ in a can of Coke: walking a dog, dancing, sharing a laugh with friends and doing a victory dance after bowling a strike.
The ads are intended to address “confusion” about the number of calories in soda.
Think “sharing a laugh with friends” can really burn off 140 calories?
Beats the old treadmill, for sure.
Edit by BJP
Denise Morrison, Campbell’s new CEO, is determined to shake things up.
She was hired to stabilize the soup and simple meals businesses, expand internationally, grow faster in healthy beverages and baked snacks.
Dubbed “the savior of soup”, she’s driven Campbell’s innovators to launch more than 50 new products in her 1st year.
For example, Campbell’s launched Go Soups, a six-flavor line in plastic pouches meant to convey freshness while capturing millennials’ adventurous tastes.
Punch line: Cloaked in green, Patagonia’s proposition — that you not buy its clothes — is resulting in some of its best sales ever.
* * * * *
Excerpted from Fast Company’s, “How Patagonia Makes More Money By Trying To Make Less”
Instead of blasting sales prices and urging consumers to load up their virtual shopping carts, Patagonia encourages consumers to buy less.
I used to be a big Southwest fan.
I used to perversely enjoy watching the clock tick so I could get in the “A” boarding group by hitting the enter button exactly 24 hours before flight time.
Then the jabrones at SWA took the fun out of the process by letting online slackers buy their way into the A group for 10 bucks … an “early bird” check-in.
Worse still, when my friends would flaunt their AMEX black cards, I’d charge everything to my SWA-Visa … earning a free flight for only a gazillion “flight legs”.
Then, the SWA jabrones changed their credit card program … making it less lucrative and way more confusing.
Several companies launched new logos in 2012.
There were a couple of themes to the changes.
Some – like JC Penney — were trying to disconnect from their devolving legacies and present a new “fair & square” image.
* * * * *
Other brands changed logos for apparently different reasons …
In a prior post My computer’s algorithms tell me that you’re willing to pay higher prices we reported that online retailers were using software that helps them detect shoppers who can afford to pay more or are in a hurry to buy … and, present pricier options to them or simply charge more for the same stuff.
Cookies stored in shoppers’ web browsers may reveal where else they have been looking, giving some clues as to their income bracket and price-sensitivity.
A shopper’s internet address may be linked to his physical address, letting sellers offer, say, one price for well-to-do zips, another for low income zones.
“Price customization” software can collate such clues with profiles of individual shoppers that internet sellers buy from online-data-aggregation firms … All fairly cheaply.
For example, Orbitz detects whether people browsing its site are using an Apple Mac or a Windows PC and recommends pricier hotels to Mac users.
Some online firms charge people different rates for the same products … for instance, by charging full price for those assumed to be willing and able to pay it, while offering promotional prices to the rest.
Allocating discounts with price-customization software typically brings in two to four times as much money as offering the same discounts at random,
One way to do this is to monitor how quickly shoppers click through towards the online seller’s payment page: those who already seem set on buying need not be tempted with a special offer.
Similarly, companies are beginning to scan Twitter for info on the shoppers since their tweets give useful hints about whether a discount is needed to clinch the sale.
Well, a WSJ investigation revealed that the online pricing tricksters are getting even trickier …