Our beloved Brew.

Our beloved Brew.
R.I.P. Big guy.

Thursday, March 25, 2010

Living Without the Brands You Used To Love

Manufacturers, especially in the food and beverage area have long been consumed with "case counts," - the movement of inventory, rather than brand loyalty. This trend has evolved over the past decade and is so prevalent that most brand managers today are more accountant than marketing person. In the "old days" brand managers were largely marketing and promotions people.

In an effort to reverse the decline in soft drink sales being experienced industry-wide as a result of consumer trends toward healthier lifestyles, soft drink manufacturers have begun significantly raising prices. Just last year, in the Chicagoland area, consumers could walk into any major supermarket chain and benefit from pricing wars to buy four or five twelve packs of Coca-Cola or Pepsi products for under $10. Today, on sale, consumers are getting three 12-packs for ten to twelve dollars. In some cases, supermarkets are offering three 12-packs for nine dollars with a qualifying minimum purchase of ten dollars.  

Even more of a threat to sales and margins is the shift in power away from the manufacturer to the retailer.
Costco, with its more than 400 stores drew a line in the sand and stopped offering Coca-Cola products because the beverage company refused to offer the warehouse club pricing that is consistent with the store's below-market strategy. Costco represents a significant portion of Coke's business. Coke, on the other hand, is less than half of one percent of Costco's $70 Billion annual sales.

Costco didn't run the risk of alienating its customers by ceasing to carry Coke because its customer base knows that Costco carries items on an irregular basis depending on pricing and packaging values. The standoff was recently settled when Coca-Cola backed down. Terms of the agreement were not disclosed.

I don't know if it's still true today, but years ago around McDonald's corporate headquarters, they bragged that if Coke lost the fast food giant's business the soft drink company would fall from number one in fountain sales in America to number four. Today, McDonald's is offering "buy any beverage for a buck" promotions. That may sound like a good deal but as recently as last year, McDonald's offered the same size product for as low as seventy-nine cents depending on the market and owner/operator participation. I doubt much of any of that increased margin is finding its way to Coke's Atlanta headquarters.

Walgreens is in the midst of a major makeover of its stores from the "drug store and sundry" model of old to compete with supermarkets and convenience stores. You'll be able to buy cold beer and a number of other previously unavailable products at every Walgreen store. Many of the things you used to buy at your corner drug store won't be sold there anymore as merchants slim down the variety and product offerings to focus on the most profitable margin items.

The shift in marketplace power is dramatic. As consumers preferences continue to change, retailers adjust their offerings to meet customer needs, sales goals and profit margins, you can expect some longtime, iconic brands to fade in prominence faster than ever, be acquired and merged, and in some cases, disappear altogether. 

Sunday, March 7, 2010

To Blog Or Not To Blog

At dinner last night a couple said they are considering a blog to help promote their book about teaching sibling children about breast feeding. http://www.amazon.com/Mommy-Breastfeeds-My-Baby-Brother/dp/0981653804 I mentioned that another friend of mine sent me a link to an article from Inc. Magazine written by Joel Spolsky. www.inc.com/magazine/20100301/lets-take-this-offline.html Mr. Spolsky began a blog (Joel on Software) over ten years ago, even before starting his successful company, Fog Creek Software. His site grew to over a million unique visitors a month, making it one of the oldest and most successful blogs in existence. He used this recent Inc. article to announce that he no longer has the time or the interest in continuing his blog.

The reason my friend sent the article to me was, as he said, "You could have written this."

You see, I don't blog for feedback, to grow my business, or to one day generate revenue from my writing. I blog because something inside me wants to be expressed. I consider blogging to be like my piano playing - meant for no one's satisfaction but my own. I never play for others. The fact that someone might happen by my front door and hear me playing is of no importance. Much like the words I write, the notes I play are meant to express and release something, not communicate, inform or entertain another. Self absorbed? Perhaps. I look at it differently. I do not excel at writing anymore than I do music, but I feel refreshed, energized and better suited to tackle the issues where I am expected to excel: parenting, marriage, friendship and good citizenry after doing either endeavor.

I write and play what moves me. Like the notes on the piano as they sail into the abyss of sound, once the words move from my mind to my keyboard, it doesn't matter if they are lost forever in the black hole that is the Internet. However, when I write, I always attempt to assume the reader's position, not the writers. Good storytelling whether oral, musical, or written is always about audience. It must provoke the thought "I see me." That is the fundamental tenet of branding as well. So, you see, music and writing are merely tools for sharpening my branding storytelling instrument as listener. I save them here to revisit and evaluate my storytelling, not to share them with the world. Having them on the Internet provides a forum where certain standards of engagement are expected. Otherwise, I'd merely save them in Word.

To me, writing is like branding. It must always be about them, and never about me/us. Blogs that promote a company or product are doomed. Blogs, like successful brands must address something bigger than themselves. On that point Mr. Spolsky and I are in complete agreement.

Back to my dinner friends . . .

Rather than express my views about my music and blogging, I shared with them the advice from Mr. Spolsky's article. A blog won't help them sell more books. Sharing their insights on subjects larger than their book topic might gain significant numbers of followers, but a blog meant to sell books will fail. As Mr. Spolsky rightly points out, "Do you know anyone who gained a single customer from a blog?" I don't.

Earlier in the week, the husband of this same couple sent me a note telling me how much he enjoyed my blog writing and offered a couple of good suggestions about the appearance of it. During our dinner, he went further and suggested I disable the ability for readers to comment since no one has added even a single comment. As he put it, "No one wants to be the first, so no one comments. With no comments, it appears no one else is reading the blog. Besides, as much as I agreed with and enjoyed what you wrote I didn't feel compelled to write 'Yes, I agree,' or comment myself."

My blog only has 6 followers including my daughter, her ex-boyfriend (Sorry Ben if that stings - I know the wound is still fresh), a couple of past clients, a friend, and a woman who found my site but remains unknown to me. I do get email feedback from other people from time to time who wish to express their own views privately. As much as I appreciate their correspondence, I have to admit feeling a little guilty since I view this blog as more a journal than a public forum.

Blogs that want feedback and comments make succinct comments and ask questions. My blog is comprised of long form essays that make stands. As the name states, I am all about brands that stand and for that to be, one must declare where they stand.