Category: Beloved Brands in the Market

The delusion of Mergers hurts the brands

6-merger-slide1-304-1M&A (Mergers and Acquisitions) talk around the Kraft-Heinz deal has dominated the business news. For most of us outsiders, it seemed like a surprise. We knew something was up with Heinz after the purchase by 3G Capital private equity group. But for Kraft, it seems like there has already been 30+ years of mergers starting with Kraft and General Foods in 1989, then adding Nabisco and Cadbury only to then split those two companies back out into two separate companies: Kraft and Mondelez. Since the split, the Kraft business is flat, the Mondelez continues to decline, likely both companies hurt by the changing diet of consumers as they cut high fat, high sugar products from their diet.

During my 20 year career, I went through three mergers. Each mergers used a different “merger” rule: one went fast, one went slow and one went clumsy. They say it takes 2 years for a merger to work. From my experience it takes longer.  Prior to the merger, everyone wastes a lot of time speculating what is going to happen, lots of lunch table chit chat and good people leave in anticipation. Headhunters are now pouncing on the people at Kraft. When the merger finally hits, you spend a lot of time on things not related to growing the brands. You have to train senior leaders above you and sales people beside on the “new” brand. Usually, everyone is trying to appear as smart as they can, but in reality for the next year, they ask the most elementary questions. As people jockey for power, some the brightest and best people I’ve ever worked with turn into school children–gossiping, maneuvering, changing their personality to fit in with key people, and some feeling/appearing demoralized and defeated.

Most M&A research studies estimate that the overall failure rate is at least 50 percent. In surveys with executives conducted in recent years, the percentage of companies that failed to reach the goals of the merger was 83 percent. With those statistics known, you would expect leaders to avoid the M&A activity, yet the trend of mergers and acquisitions has been constantly increasing over the past 20 years. Moreover, the number of mergers and acquisitions and the sums of money invested in them have shattered the record almost every year! Even though acquisitions cost billions, the purchase is much easier to do than executing merger. We see the lack of planning, the realization that synergies are not what you expected, the major differences in the culture becomes clear, negotiation assumptions and mistakes prove costly, and quick decisions made impact the overall motivation.

Here’s a list of the top mergers in history

M&A

The reasons most M&A’s happen is the same reason they fail

  • Our business is struggling, their business is doing well: So if your business is struggling, you need a turnaround, not the distraction from a merger. The effort undertaken during a merger will only make your business struggle even more. And you acquired a high growth, which means you’re likely buying high at a price premium. That will be hard for you to realize. This premium is generally so high that even successful management activities after the acquisition do not provide ROI (return on investment) and do not remedy the valuation “error.” The only thing left to do is to cut costs, both in people and marketing usually resulting in the struggling business doing even worse and the newly acquired business starting to flatten out.  
  • Allow us into new markets (new categories, new channels, new geographies). Yes, now your newly merged company will be in new markets, but it doesn’t necessarily translate that your brands will gain easy entry into those markets. At the shelf, retailers may hold your companies share of shelf so that means if you want your new brand in, you have to take out skus of your newly acquired brand. All that means is that as your brand takes time to gain any momentum in the new market it is entering, any gain is offset by a dramatic loss of sales of the brand you took off the shelf. A second risk to entering into markets is the merger may have cost the talent with the knowledge of the new market–and now inexperienced leaders are making decisions about markets they know very little about. With the Heinz-Kraft deal, 60% of Heinz sales are beyond North America, but 2% of Kraft. They have already tried to spin this great myth that this opens up new markets for the old Kraft brands. I want to see them try to sell Velveeta, Jello or Cheez Whiz in France or Italy. Sounds good on the books, but not in reality. 
  • Imagine the power of us together: the size, clout and efficiencies. In a business driven or dominated by retail, that power can certainly help. Where there are large manufacturing or union costs, the efficiency can be leveraged for lower costs. layoff-in-newspaperBut when all you have is efficiency, it becomes obsessive and you look everywhere to cut costs in order to pay off the merger. The first round is easy: close redundant plants and warehouses, eliminate duplicate sales people. And you see results. But since every business must show incremental profit to show the merger a success, the second round of synergies that are harder to show. Now you cut brand support–reduce marketing spend, starting re-organizing teams to reduce people, squeeze suppliers for cost reduction. It can work in the short term, but while the organization becomes obsessive about synergies, who is focused on the growth? If the top-line doesn’t grow,you will eventually run out of places to cut. And becoming this huge conglomerate can make you slow to respond, stodgy, risk-averse and ripe with bureaucracy. This starts to sound like the old Kraft General Foods of the 90s and early 2000s, who closed successful businesses, got rid of some great talent through the years and are known as one of the most risk-averse conglomerates around. My big worry about the new Heinz-Kraft is how to make sure the new company can move with the agility needed in this ever changing marketplace. 
  • We will acquire a technology or expertise we don’t have. At first, it makes sense that you can buy the technology or expertise of your competitor, but likely it comes at a premium with no guarantee for success. If it’s a technology buy, you can certainly use it in your own product since you bought it. But we like to say that brands have four choices:  better, different, cheaper or not around for very long. Now you’ll have both brands appearing almost the same. It’s very challenging to run two brands in one category–I know from experience. The biggest issue is that the two brands start to resemble each other to the point of duplication–if this worked here why won’t it work there. The same technology under the hood, the same distribution strategies and the same ad agency produces similar ads. The best case study for this was when Ford bought Mazda and used identical parts for cars yet tried to appeal to different targets at different price points. On the other case, when you acquire talent, you also acquire a distinct culture you need to make sure you continue. There are many cases where companies purchased an innovative R&D team and failed because that team was mis-managed and lost that innovative spirit. Case in point was Ford’s purchase of Volvo, almost destroying the brand’s spirit of innovation in safety. Both the Volvo and Mazda brands did much better after escaping Ford. Oddly enough, is it any coincidence that the Ford brand is now one of the best performing brands in the market?  It will interesting to see what happens with Apple and Beats by Dre as that deal highly favored Beats, and it’s Apple’s first real attempt at M&A. 
  • Ego Play: Many times the personal interests of senior management are not always aligned with those of the stockholders. The CEO and management team see personal advantages in the merger, such as greater empowerment and control of a larger organization, improvement of the social-management status, and higher salaries and benefits. With wide-eyed optimism, they convince themselves that they can do a better job managing the brands they acquire, they tell themselves they can find more growth and cut costs at the same time. Ego can get in the way of good strategic thinking. Companies can get in bidding wars and corporate ego sees the price get out of hand. They get so deep into the deal, they have to have it–at all costs. In any transaction, when things get emotional the seller wins.
  • Our cultures are a perfect match: Very rarely do we hear this as the primary reason. Yes, we hear it in the press release and at the opening day rally, but as many of us have gone through a few of these, we know that 5 senior leaders meeting 5 other senior leaders and working out a deal is not usually a good indicator that the cultures are a good fit. Even if they say so. Business culture is an odd thing and should not be under-estimated. Usually a merger never allows the due-diligence to find out about whether the cultures fit.  

mergers-acquisitions-22744864Who benefits from Mergers

  • The brands don’t benefit. And the consumer misses out as well. With a distracted company sorting through the merger and trying to make the numbers, it’s usually innovation that gets delayed or cut. With demand for synergies, production costs/warehouse costs likely impacts ingredient choices and freshness options. Sadly, many times the product just isn’t the same as it used to be. 
  • Brand Leaders don’t benefit. They have to re-work and re-work plans for new management. And usually the discussions are a step back in the degree of strategic challenge the first year or two. You get questions like “so tell me how this brand works?” or “have we always done it that way?”.  As synergies happen, we see options like re-structuring the marketing team to group brands together. That means less attention can be paid to each brand or the details beneath. Brand budgets are scrutinized and cut–usually sticking to the safest options in the plan and eliminating creative ideas that that carry risk.  
  • The HR team doesn’t benefit. While they are seen as the “evil group” in a merger, they are usually under the most pressure to cut head count and deliver the bad news, while coincidently being challenged to find a new culture from these two companies that don’t fit nicely together.  This group bears the brunt of the merger. 
  • Shareholders: The statistics show that the shareholders of the seller benefits more than the shareholder of the buyer. Considering, mergers can come out of nowhere fast, this is just a crap shoot as to which company stock you hold. But it really does speak to the premium paid in these deals. As they say in Real Estate, never buy high. 
  • Investment Banks and McKinsey Consulting: At the whim of the leaders, both groups receive huge fees for doing the deal and executing the merger plan. Oddly enough, neither group seems to be at risk or on the hook if the deal or the merger go bad. They just keep moving on to the next deal. 
  • Senior Leaders in the short-term. With the approval to move forward, they increase their status within every touch point–with retailers, with peers, with agencies and in the business community. They likely benefited financially from the merger–either higher salary bump or bonuses. In the longer term, they are on the hot seat to make this deal pay off, and with a 50% failure rate, they likely won’t last. 

Yes mergers are as much of a reality as baseball trades. Like in baseball, managers think we can do more with that asset (brand or player) than they are doing. But more and more, just as the best sports teams are winning because of the organic development of their players, the same holds true for brands. Focus on growing your brands, choosing the right consumer driven strategies and executing with intelligence and passion. Stay focused on your own business instead of drooling over others.  

While the grass always looks greener on the other side of the fence, make sure your own business is in good shape.

 

To see a more in depth presentation please read the powerpoint presentation below which is a Workshop to show brand leaders how to create a beloved brand so they can generate more power and profit for their brand.

We make Brands better.

We make Brand Leaders better.™

We offer Brand Coaching, where we promise to make your Brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your Brand’s full potential. For our Brand Leader Training, we promise to make your team of Brand Leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Top 10 Super Bowl Ads of all time

Slide1I hope a few of these spots bring back some good memories for you and if there are any special ones missing for you, feel free to add them in the comments.  I really hate the latest trend where companies are releasing their ads the week before or for this year, two or three weeks before. Yes, that’s great for sharing on line. But I’ve already seen some of this year’s ads and seeing these ads on a small computer screen, on my own, at random hours isn’t as exciting as seeing them at a Super Bowl party.

As we get ready for this year’s game, here are ten great ads from Super Bowls past. Enjoy.

Coke “Mean Joe Greene” (1979)

Bit of that 1970s “cheese” for you, but I remember this one from my teens.  The spot has become as iconic as the drink itself.  

 

Apple 1984 (1984)

Great story of this ad in the Steve Jobs book–how the board never wanted to run it and they lied about the media commitment.  This was one of the first big Super Bowl ads, that changed the way advertisers saw the Super Bowl slots.    

McDonald’s Jordan vs Bird (1992)

This one had a lot of break through and left us with the phrase “nothing but net”.  

Cindy Crawford “New Can” (1992)

Not much needs to be said about this one, other than that they repeated this 10 years later and she still looked the same.  

Budweiser: WASSUP! (1999)

The simplicity of this one, but it really does capture a male-bonding insight of how guys do interact with their buddies.  

Snicker’s Betty White (2010)

Whatever Betty was paid, she’s made millions since because of this spot.  Quickly after this one, the power of a Facebook page demanded that Betty host Saturday Night Live.  A great little spot, one that Snicker’s has yet to fully capture in their pool outs on this campaign.   

Chrysler Eminem (2011)

I love the tone of this spot, perfect casting with Eminem–the rawness of his voice, attitude and authenticity.  The repeat in 2012 using Clint Eastwood was a good spot as well, but not quite up to the Eminem version.  “Imported from Detroit” is a very big idea. Love it.  

Budweiser 9/11 Tribute (2002)

Even after all these years, this one might bring a tear to your eye.  Months after the tragedy of 9/11, this one takes the American icons of Budweiser and the Clydesdales marching through the streets of America and gives a nice salute to NYC.  

Google “Parisian”

Beautiful ad that shows the power of Google as an enabling brand to your life.

Ram “farmer”

One of my fav ads of all time, and takes such a huge artistic risk by launching such a quiet ad that really tugs at the heart, when most other brands are doing slapstick ads.

Good luck to this year’s Super Bowl, as many of us will be watching the TV ads as much as we’re watching the game.  The power of the venue as the Super Bowl out draws the final game of the other 3 sports (Baseball, Basketball and Hockey) combined.  

Let’s hope for a great game and maybe one great ad to add to this list.

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To see a workshop on BRAND STRATEGY, click on the Powerpoint presentation below:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Dollar Shave: an amazing underdog “niche strategy” success story

art-1-dollar_shave_clubDollar Shave Club is a subscription based razor company, founded in 2011 by Mark Levine and Michael Dubin based on the idea that consumers are highly frustrated with the growing cost of razor blades. This is a classic case of finding a major un-addressed problem that consumers are facing in the market, and use a creative brand solution that helps to turn that problem into a consumer enemy that upsets them emotionally. We are seeing many brands use new technology options to set up the old guard as the enemy ready for attack. This has been the strategy for Netflix on movie rentals, Beats by Dre on the headphone business and the Uber brand on the entire taxi industry. And this is the strategy for Dollar Shave on Gillette. With the cost of a pack of razors going for $20 at your average drug store or even $40 at Costco, there was a huge opportunity in the marketplace. Yes, we’ve seen huge technology gains in the last 20 years with way more blades than we ever though possible, flex balls and blue lines telling us when to throw it out. But for a great many of us, price still matters. 

We’ve always said that brands really have 4 options: better, different, cheaper or else not around for very long. The key is to find a unique selling proposition for your brand.  You don’t always need to find a rational point of difference as long as there is room to be emotionally unique.  Slide1

Here’s how this competitive positioning process works: Map out everything your consumer wants–all the possible need states. Then map out all the benefits that you and your competitors can do better than anyone else–both functional and emotional zones.  You want to find that intersecting zone where what you can do best matches up to a need state of the consumer.   Then find a way to serve that need state to the best of your ability and transform it into an even bigger deal than first meets the eye.   Avoid the intersecting zone where your competitor is better than you and please avoid that zone where you and your competition foolishly battle in an area that “no one cares” about.   The battle ground (?) zone is where both you and your competition can satisfy the consumer need at an equal rate.  To win in this situation, you need to get creative and find ways to out-execute or find some emotional connection that changes the game and makes you the clear winner.

For Dollar Shave, they have found the model that makes them definitely cheaper.  I really love the Dollar Shave Club concept — you sign up for a monthly fee depending on the quality of blades (the humble twin, the 4x and the Executive) you order and they automatically send you a free handle and a monthly shipment of blades–in Canada, that cost ranges from $3.59/month up to $9.59/month. In case you want to give it a shot and become a member click on this hyperlink: Dollar Shave Website

dollar shave how it works

Amazing Launch Advertising

Dollar Shave took advantage of viral advertising, making such an innovative ad that it was shared and viewed by up to 18 million people. The ad starring the CEO, who is also a burned out Hollywood actor, was made with such an anti-corporation feel/tone that it jumps off the computer screen. Here is the ad which is appropriately titled: “Our blades are F***ing Great”

Classic Case of Guerrilla Warfare

From the marketing strategy workshop we run at Beloved Brands, we explain how that Guerrilla Warfare works best when no one even notices or can do anything about it. Here are the four key principles brands need to establish a successful Guerrilla niche brand.

  1. Pick a segment small enough that it won’t be noticed and you’ll be able to defend it. Be aggressive. Put all your resources against this small area, so that you’ll have the relative force of a major player.Slide1
  2. Be flexible and nimble. You’ll need to enter quickly to seize an opportunity that others aren’t noticing, but also be ready to exit if need be—whether the consumers change their minds or competitors see an opportunity to enter.
  3. Explore non-traditional marketing techniques to get your brand message out and your brand into the market quickly. Because you’re playing in a non-traditional market, you’ll be given leeway on the tools you use.
  4. For Guerilla brands, it is better to be loved by the few, than liked or tolerated by the many. Leave the masses for the mass brands.

You can imagine that as Dollar Shave started out, they were up going against one of the biggest consumer goliath brands in the world. Gillette’s global sales are in the billions. For Dollar Shave, first year sales were about $30-50 million, while they likely generated a lot of noise at P&G, that sales level should not even be enough to make Gillette lose an ounce of sleep.

But that’s a ton of money for an entrepreneur. 

In fact, Dollar Shave did a great job in backing Gillette into a corner where they would have a hard time changing their entire business model to counter Dollar Shave. Are they going to upset major retailers by offering their own subscription model version? They can’t. Are they going to dramatically lower their price from $27.99 for 10 razors down to $9.99 and give up all the profit they are already generating? They can’t. The best move would be to control Dollar Shave and allow them to stay at the $50 million level. However, Dollar Shave has continued to expand on their niche and got big enough to prompt action from Gillette. But let’s be honest, this is a very lame reaction below:

I’m not sure that ad will get many to sign up for the Gillette subscription model, as it’s not exactly the full on attack that a Leader normally uses to squash the naughty little niche player that’s bugging them. The good news for Gillette is only 199,000 people have seen this on-line, compared to 18 million views for Dollar Shave.

Let’s use a little Napoleonic military theory for a minute to analyze what’s happening here. Napoleon had two main strategies:  The first strategy Napoleon: Where there is opportunity to win against their strength, ATTACK THEIR STRENGTH, then the weak area will be that much easier. This type of Strategy would be better for Schick as the challenger brand to use. If a Niche brand goes against the leader’s strength right away, they will be clobbered. The Dollar Shave brand used Napoleon’s second strategy: Where there is a limited opportunity to win against their strength, then ATTACK THEIR WEAKNESS, and once they mobilize their strength to attack back, you can then attack their strength. This is where Dollar Shave attacked Gillette on price. I’m not sure if Dollar Shave expected a reaction, but eventually got so big after 2 years, that it became warranted. The good news for Dollar Shave is that their attack has brought Gillette to fight back on Dollar Shave’s terms–on the subscription battle field. But while Gillette is mobilizing, Dollar Shave is now able to attack back at Gillette’s point of strength: the drug store.  Here’s how that Napoleonic Strategy #2 maps out.

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Dollar Shave’s round two of advertising in 2015 is making a mockery of how Gillette does business: launching 4 ads that poke fun at the security around buying razor blades and the special promotional gift you get. Here’s two very funny ads, in their latest series of four TV Ads they are currently running, generating a lot of talk value among the core 18-24 year old target market:

Dollar Shave “Security”

Dollar Shave “Free Gift”

These are fantastic Dollar Shave ads. They generate a lot of attention, the branding irreverent tone fits with the Dollar Shave launch, these ads communicate the main benefit that Dollar Shave is a simple model that will save you money and has that memorability factor that will stick with consumers. Not only is Dollar Shave using more traditional TV media to push for a higher reach, these ads have been seen by a combined 3 million people on line.

Well played Dollar Shave:  your move next Gillette

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To see a workshop on BRAND STRATEGY, click on the Powerpoint presentation below:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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The 10 real reasons that Target failed in Canada

target5Having lost nearly $1 billion in its first year in Canada, and facing more multimillion-dollar losses, Target announced on Thursday it would discontinue its operations in Canada and close its 133 stores. While the news of them closing should not be a surprise, the speed in which they left feels pretty shocking. They didn’t even make the 2-year anniversary of the new store.

1. Target just wasn’t different. 

Brands really only have four choices: they can better, different, cheaper or not around for long. For Target in the US, they have always taken the “different” positioning–focused on cool suburban moms, broader offering. But in Canada, Target basically became Wal-Mart with red paint. They never found a way to separate themselves to be seen as different enough to get “new consumers” to try it out and yet they seemed to disappoint those potential loyal consumers who had already bought into the US version of Target. 

2. The suburban positioning already taken in Canada

In the US market, Wal-Mart grew up through the 70s and 80s as a small town or even a rural brand, providing the opportunity for Target to become the suburban version of Wal-Mart. But even looking at pure demographics, Canada has the biggest middle class population in the world, the population is very concentrated to six main cities, where as in the US there are many small towns scattered throughout. When Wal-Mart entered Canada, they purchased the retail footprint of Woolco, which was a suburban brand. The Wal-Mart strategy in Canada closely resembled what Target had done in the US: going after suburban moms, new/fresh stores, big wide/clean aisles making for a better shopping experience than in the Wal-Mart stores in the US.

3. The Low priced clothing for cool moms positioning was already taken in Canada

joe_freshLoblaws is the biggest food retailer and are known for a) copying great retailers around the world b) attacking their competitors viciously. While originally a grocery store, the Loblaws stores have become a mass merchandiser store where you can get the same low-priced clothing for the cool moms, via the JOE FRESH brand. This took away a potential competitive advantage for Target to leverage.

4. Target invested too much and too fast in new locations and new employees

Target launched 133 stores and hired 17,000 employees in Canada–almost half of Wal-Mart’s footprint in Canada, who have been here for 20 years. Taking on the leases of Zellers and then fixing up their locations was costly and crippling to the operations.Target tried to do way too much too soon–hurting their ability to deliver the same experience they are delivering in the US. Target had two strategic choices at launch: a) pick limited locations and do it right or b) cover everywhere in Canada as a preventative strategy against competitive attacks. They decided to be everywhere, and as we can see did a very bad job. They should have staggered their launch by starting with Toronto only, expanding to key markets as they established themselves and managed to create a loyal following. Operations were awfully sloppy. The procurement system was so poorly run that empty store shelves were not uncommon. Given the empty stores, it’s hard to really blame a run on merchandising.o-TARGET-CANADA-EMPTY-SHELVES-facebook

5. Target had no money left to actually drive demand

The best thing about Target is you could get a great parking spot, there were no crowds in the aisles and you didn’t have to line up to pay. Why? Because, there was no one there. As all the money went into the bricks and mortar of creating new stores, they had very little money left over for marketing. In the 18 months since launch, there was very little hype, no great advertising, no wonderful launch events, no press coverage, very little on social media. They never created the demand needed to drive revenue.

6. They didn’t have the same selection as their US stores

The most loyal Target shoppers in Canada had experienced the Target store in the US for years, whether they were cross border shopping or going to Target when they were vacationing in Florida, Arizona or California. And the biggest complaint they had about Target Canada is the lack of product breadth on the shelves. They were expecting the identical offering they saw in Target US. But that’s not a reality. Target is JUST a retailer at the mercy of what the manufacturers offer in Canada. There are numerous factors that impact the variety when it comes to Canadian manufacturers–the biggest being the relative size of listing fees that Canadian retailers demand are so big that launching smaller small skus just doesn’t make sense in Canada. The difference in government regulations will also alter what products can be available for sale.

7. Target US sales dropped the minute they announced they were going into Canada

Target is a very US centric brand, with Canada representing their first attempt at International–and it might be their last. As soon as they launched, they faced declining sales and share in the US. It was unrelated, but now Target management faced two issues at once–a turnaround strategy to solidify US sales and a launch strategy internationally. Anytime you divert your attention, you’re likely to mess one of them up, and the Canadian launch suffered. 

8. The dropping Canadian dollar messed up their financial contributions

Screen Shot 2015-01-18 at 11.48.38 PMWhat is not mentioned very often is that the Canadian Dollar has fallen from relative parity when they were considering launching two years ago to 0.83 cents. That has a two-fold impact: the reporting of sales and profits internationally just took a 17% hit due to exchange and the imported items from the US just saw a big cost increase that will bite into the margins. With those loyal Target shoppers already upset that the Canadian and US prices are not equal, there was very little opportunity for Target to cover the impact of the dollar in their P&L. 

9. Target saw very little risk to leaving

When they made the decision to exit Canada, they did so very quickly and from reading everything said this week by Target, they showed very little remorse. The opening of their press release started by telling the US manufacturers that this statement had zero impact on the US stores or their standing with manufacturers in the US. Rather than bite the full financial bullet, Target has asked for somewhat of a bankruptcy protection, like Chapter 11 in the US. I guess the question is “why are they asking for any protection?”.  Yes, they said they would create a trust that would cover 16 weeks of severance pay for “most” of their employees. The “most” line caught my eye, which feels similar to that classic “Up to 70% off everything in store”. We shall see how fairly they treat ALL 17,000 employees. And will the protection get them out of leasehold agreements that leave malls empty and scrambling to fill them and will they treat the uniquely Canadian manufacturers the same as they treat their US manufacturers. 

10. Their loyal consumers embraced Target more than Target embraced their consumers

When consumers care more than the brand, that brand is in trouble. And from what I can see, there still are many loyal Target consumers who are disappointed in the news. At Beloved Brands, we believe passion matters, because the more loved a brand is by consumers, the more powerful and profitable that brand will be. Target did very little to create love with consumers. Their promise lacked any real difference and they failed to tell their story to the Canadian marketplace. There was zero magic in the way they connected with consumers and zero magic in the experience in the stores. 

Let this be a lesson to the next retailer who will venture into Canada

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To see a workshop on THE BRAND LEADERSHIP CENTER, click on the Powerpoint presentation below:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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No brand does Social Media better than Taylor Swift

B2WXKxRIUAA8EY-Yes, every star these days has millions of fans following them on Twitter and Instagram. But it’s what Taylor Swift does with her following that really separates her out from the pack, and helps turn her into a Beloved Brand.  I know you want to be cynical and think “well, she likely has a team of people”.  Yes she does, but she has the vision, direction and final say for how her brand is portrayed. Justin Bieber might have similar followers, but in between throwing eggs at the neighbor’s house or driving too fast, the most interesting thing he ever tweets is “Hello Chicago” on the morning of his concert or dropping the names of other celebrities that he’s hanging out with. It reminds me of Michael Jackson back in the 1980s–everyone was using video, but MJ was just using it better than everyone. 

I’m not a fan of TSwizzle’s music, but she does an amazing job portraying herself as an average girl living a celebrity life. She tries to do “normal things” that someone her age would do for her friends, and in this case she treats her fans as though they are her friends.The creative programs Taylor does choose give you a feeling that it’s not just about awareness, but rather about connecting. She uses surprise and delight marketing in many of the things she does, which is a great tool that bridges “pop star” lifestyle with the “average girl” image.   

Here are 5 brilliant and highly creative on-line moves by Taylor Swift that connect her on a deeper level with her followers:

1. Taylor woke up and flew to Ohio to surprise a fan by going to her bridal shower. She appears like a long-lost friend, hugging everyone and talking with ease among her “friends”.

2. While very small in nature, she has been well-known to just lurk around and comment on randomly comment on people’s Instagram page. Imagine how huge it is when her name randomly show up one day.  She’s even taken it a step further by providing advice to fans on Instagram–the type of advice that a friend would provide. 

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3. This year, “Swiftmas” gifts to fan, where they actually studied the social media pages of certain fans to give them gifts that were relevant to that person’s life–just like a friend–plus long hand-written notes. She visited one long-term fan with gifts for her son–spending two hours with the family. Just watch the reaction of these fans. This video has over 14 million hits.

4.  Taylor wrote a compassionate and supporting note on Instagram to a Fan who was bullied. Bullying is a very important topic and this note generated tons of positive PR for Taylor.

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5.  Visiting a Boston’s Children’s Hospital. What shows up in this video is how casual Taylor is–from having an un-tuned guitar to not overly prepared what to sing to a viral filming of the visit. 

Through each of these programs, Taylor Swift appears very open, authentic and genuine in her approach to fans. She grew up in such a video/on-line/social media world, that taking selfies, tweeting about waking up late and commenting people’s Instagram pages are just very “normal” things to do.

Taylor Swift uses Social Media to show up as”just an average girl”

Last year, I wrote about How Miley Cyrus used controversy to gain attention in a very strategic manner.  To read more on that, click on this hyper link:  Managing the Miley Cyrus Brand

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To see a workshop on THE BRAND LEADERSHIP CENTER, click on the Powerpoint presentation below:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Best viral video Ads of 2014

imgresWay back in 2000, I remember that we did an 89-second version of a TV ad, but we only did it for movie theatres. Back then, no one was doing them on-line that early so we figured we were revolutionaries. Now it’s fairly common to see 2 or 3 minute videos being shared on social media and now we are even seeing 4 minute videos.They are a great tool for story telling and using very high production values make them seem like mini-movies. But let’s be real, I’m only showing the best of the best on here.  For all I know there could be an equal amount of crap being made, that I’m not even seeing. Thank goodness.

Viral ads must attract attention and be sharable

Even as you venture out into a different medium than you might be used to, the fundamentals of brand communication still apply. At Beloved Brands, we are always preaching the fundamentals. In this case, you want to make sure that your ad delivers on the ABC’S which means it attracts  Attention, it’s about the Brand, it Communicates the brand story and Sticks in the consumers mind.  

  • Attention:  You have to get noticed in a crowded world of advertising.  Consumers see 6000 ads per day, and will likely only engage in a few.  If your brand doesn’t draw attention naturally, then you’ll have to force it into the limelight. With a viral ad, you need to make sure that it is made with sharing in mind. In fact, sharing becomes the medium for you.Slide1
  • Branding:  Ads that tell the story of the relationship between the consumer and the brand will link best.  Even more powerful are ads that are from the consumers view of the brand.  It’s not how much branding there is, but how close the brand fits to the climax of the ad. With viral ads, you can step down on the amount of branding, but what you say creatively still has to fit what you say as a brand.
  • Communication:  Tapping into the truths of the consumer and the brand, helps you to tell the brand’s life story. Keep your story easy to understand. Communication is not just about what you say, but how you say it—because that says just as much. With viral ads, it’s all about story telling, that touches consumers in an emotional way. If the viewer feels inspired or they laugh or cry, it dials up the amount of sharing they will do.  
  • Stickiness:  Sticky ads help to build a consistent brand/consumer experience over time. In the end, brands are really about “consistency” of the promise you want to own.  Brands have to exist in the minds of the consumer. It’s essential with viral ads, that you own the idea. With a few highly shared ads, it’s strictly entertainment and a month from now, no one will remember.

Here are the best viral video ads of 2014

Since it’s was an Olympic year, we start with a lovely spot from P&G and the “Thank You Mom” campaign that was started back in 2012 London Games.  This has generated 19.7 million views on Youtube.  

This next ad by Duracell takes story telling to new heights, bringing a very inspiring story about a deaf athlete named Derrick Coleman for Seattle Seahawks. This ad has generated 22.7 million views.

To bring awareness to Down Syndrome, this beautiful “Dear Future Mom” ad had almost 6 million views this year.

Budweiser used the Super Bowl to showcase this puppy ad, very cute and heart-wrenching story and then pushed it through social media sharing to keep the momentum going. It generated 54 million views.

This is a beautiful ad from DTAC, a mobile phone company in Asia who tells a beautiful story of a dad, first wanting to use technology and then realizing that he should just pick up the baby. Well done, heart wrenching, cute, has managed to generate 17 million views.

John Lewis continues their amazing Christmas tradition with a nice story about a boy and his Penguin. It’s a nice throwback to the old days when there were no video games, netflix and instagram, but rather the use of your imagination.

But finally, the best viral ad of 2014 has to be the Always. Yes it borrows a little from Dove’s “real beauty” and a bit from Nike “if you let me play” but it’s so well done and on a brand no one would have expected a great viral campaign to come from. It’s certainly easier to do viral ads on beer or football, so here’s to the folks of P&G for making this one happen.  They have generated over 54 million views.  What’s amazing is that two of the best viral ads come from P&G. If you’re competing with them, are you missing something when you stick to your 30 second TV ad?

On behalf of Beloved Brands, I want to wish everyone who reads this blog a very Happy Holidays and best of luck for a prosperous 2015.  As we moved past 3 years, we’ve now generated over 3 million views.  We love what we do and we hope it shows.

Have a great 2015

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To see a workshop on HOW TO CREATE A BELOVED BRAND, click on the Powerpoint presentation below:

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

We make Brands better.

We make Brand Leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Weight Watchers takes a compelling consumer insight and manages to anger me

When I saw this ad, my mouth fell open as I watched.  There was something compelling and revolting about this ad, which leaves me confused about how I felt.  Here’s the ad:

 

I applaud client and agency for using consumer insights in their ads. Too many ads all about the product (what do we do) and not enough about the consumer (what does the consumer get) And, I recognize that in a crowded category, the tone of these Weight Watchers ads did some take some risk to stand out as being different. It certainly grabbed my attention, and during the ad, I said “who the hell is making this ad?”.

However, it’s such a weird deliSlide1very of the consumer insight. Yes, it is a fact that people eat because they are sad, down, stressed, bored or lonely.The dictionary definition of the word insight is “seeing below the surface”. To get deeper, keep asking yourself “so what does that mean for the consumer” until you have an “A-HA moment”. Ask what are the beliefs, attitudes or behaviors that help explain how they think, feel or act in relationship to your brand or category? At Beloved Brands our definition of Insight is Quite Different. Insight is not something that consumers never knew before.  That would be knowledge or news, but not insight.  It’s not data or fact about your brand that you want to tell.  Real insight goes a layer or two deeper to help with the cause and effect.  Oddly enough, Insight is something that everyone already knows.  Here is our definition: Insight comes to life when it’s told in such a captivating way that makes consumers stop and say “hmm, I thought I was the only who felt like that”.

While I think people will get these ads, those looking to lose weight will be slightly offended. As someone who has lost the same 10 pounds many times in my life, I know the struggles of managing my weight. I know it’s about control and that I need to find other ways to counter the boredom and stress. I know it’s hard and I know that I likely need help.But making fun of me, even poking me just a little, will not make me want your help. I’d rather turn to someone who makes me feel positive, encouraged and optimistic that I can do it. The best ads use insight to connect and this ad repels consumers away, taking a well-known insight and delivering it in a hurtful, degrading and de-humanizing way. The best ads get on the side of the consumer and provide a rational and emotional benefit–this ad only articulates the problem. Consumers buy solutions more than they buy problems, so sell the solution. The best ads create a space that is unique for their brand, making them seem better or different. This ad is a basic “brought to you by” type ad, where the brand name said at the end is enough to move us. In a crowded weight loss category with many choices, this ad needs to say more about Weight Watchers that separates them fro the other brands. I hope they pull the ad, before diet season hits in 4 more weeks.    

Enough of negative messaging. Here’s an ad with a similar insight, but twists it in a motivating and challenging way. This ad gets me to the gym!!!

Use consumers insights to engage and connect with consumers

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To read more on strategy, here is a workshop on HOW TO CREATE A BELOVED BRAND, click on the Powerpoint presentation below:

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

We make Brands better.

We make Brand Leaders better.™

We offer Brand Coaching, where we promise to make your Brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your Brand’s full potential. For our Brand Leader Training, we promise to make your team of Brand Leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Retailers are destroying Black Friday

Black-Friday-LineFor the past 20 years, it has been a tradition for american families to plan out their friday after US Thanksgiving by hitting the malls as the kickoff to Christmas season. For us too lazy to get up at 5am, it has been fun to watch on TV, seeing doors flung open with screaming people trampling each other trying to get to those door crasher specials. Whether you like the idea of “Black Friday” or not, retailers are doing what they do best:  taking a good thing and messing it up.  

Last year, we saw “Black Friday” ads on the Monday of Thanksgiving. This year, we saw them the week before. The problem when you mess with Black Friday is that you lose the buzz and excitement. You also lose the irrational consumer behavior brought about by the energy of the moment. So Black Friday used to mean getting up at 5am, running through the store to grab that Samsung TV for $179 by 6:15am and then adding a TV stand and gold-plated cables at full price on the way out of the store. Just like any emotion, causing consumers to feel more and think less puts the power into the hands of the brand. Retailers were winning this transaction. That’s gone if you do your sale over 10 days. You are just giving consumers time to think, search other websites and come to a rational decision. Now with time on their side, consumers can shop around for a week, review the specs on the TV and figure out that it has been down-graded with a lack of features, determine the gold-plated cables are a waste of money and just go to IKEA for the TV stand. Maybe they can even talk themselves out of the TV!!!  Why? Because now they can use their brain. After all, that buzz is gone.

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Another crazy trend is the idea that retailers open on Thanksgiving evening. Retailers are always trying to get a leg up, so they are now all trying to open when no one else is open. And yet with a low barrier to copy, they all just follow each other and negate any advantage. Last year the trend started where major retailers including Wal-Mart, Target, Best Buy and Sears opened on Thanksgiving Day–the night before Black Friday. This won’t mean a jump in revenues it just means revenues will be brought forward one day. Yes, retailers have this belief that it’s a constant dog-fight for sales, and if one my competitor gets a leg-up, that means a loss to me. Retailers are facing such pressure during these economic times so I’m somewhat sympathetic. Margins are shrinking and many retailers basically make or break their year during Thanksgiving and New Years. So I can understand the temptation. Before we get into the ethical part of opening, let’s look logically at the 8 ways a brand can make more profit: 1) increasing prices 2) getting consumers to trade up 3) lowering your cost of goods 4) lowering your marketing costs 5) stealing other users 6) getting users to use more 7) entering new categories and 8) getting new users. I realize it’s all about stealing other users. But if both competitors blink and open at 8pm on Thanksgiving, no one really wins over the consumer. The only thing I see here is a slight increase in the costs of increased wages and store opening costs. Net net, no one really wins.Slide1

So at the year end, no retailer will really be saying “we had a great year because we opened on Thanksgiving Day”. But come on guys, while your press releases are saying that you’re really just “catering to consumer demand”, we business people know that’s BS. I’d rather see all Americans sitting around the dinner table and watching football (go Patriots) with family and friends. If families are your main target market, you should be making a big deal out of the fact that you are closed so that all employees can spend time with their families. That’s a great way to establish love for your brand. My Hope is the Retailers Announcer Early that they will be closed on Thanksgiving 2015!!!

To all our American Friends, I want to wish you and your families a Happy Thanksgiving

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To read more on strategy, here is a workshop on HOW TO CREATE A BELOVED BRAND, click on the powerpoint presentation below:

We make brands better.

We make brand leaders better.™

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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Beautiful Ads that pay tribute to our Veterans will bring a tear to your eye

poppyToday is Remembrance Day in Canada–a day we pay honour to our veterans from the wars in our history and sadly even today. These young soldiers fight for our freedom.  

Remembrance Day (also known as Poppy Day) is a memorial day observed in Commonwealth of Nations member states since the end of the First World War to remember the members of their armed forces who have died in the line of duty. Remembrance Day is observed on 11 November to recall the end of hostilities of World War I on that date in 1918, as hostilities formally ended “at the 11th hour of the 11th day of the 11th month”.  Every Canadian kid learns about “In Flanders Fields”, which is a war poem, written during the First World War by Canadian physician Lieutenant Colonel John McCrae (November 30, 1872 – January 28, 1918) who was a Canadian poet, physician, author, artist and soldier during World War I, and a surgeon during the Second Battle of Ypres, in Belgium.  He was inspired to write “In Flanders Fields” on May 3, 1915, after presiding over the funeral of friend and fellow soldier Alexis Helmer, who died in the Second Battle of Ypres. According to legend, fellow soldiers retrieved the poem after McCrae, initially dissatisfied with his work, discarded it. “In Flanders Fields” was first published on December 8 of that year in the London-based magazine Punch. flanders-fieldThe red remembrance poppy has become a familiar emblem of Remembrance Day due to the poem In Flanders Fields. These poppies bloomed across some of the worst battlefields of Flanders in World War I, their brilliant red colour became a symbol for the blood spilled in the war.

Here are some beautiful ads that pay tribute to the veterans and war heroes.

This ad from Bell in Canada, from the 1990s pays tribute to a war hero from Dieppe in World War II.  

This ad from Guinness called “Empty Chair” is a nice quiet tribute to a soldier, awaiting their return home.

Budweiser has done quite a few ads to salute our heroes of war, but “Welcome Home Troops” in 2006 is so simple, no words are needed.

At 11am, in my hometown of Ottawa, 80,000 people will gather at the War Memorial for a moment of silence. Last month, an unarmed solider Cpl. Nathan Cirillo, only 24 years old was shot in the back as he guarded this war memorial.  Today, we will honour his memory along with all those soldiers lost to war.  

ottawa monument i

 

LEST WE FORGET

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UK retailer John Lewis returns to form with a beautiful 2014 Christmas ad

imagesJohn Lewis Christmas ads use beautiful music, a movie-like storyline that demonstrates the beauty of gift giving, stretched out over 90 seconds. No words are needed to tell the story. They are not loaded with so much branding that they would turn you off before inviting you in.  The John Lewis ads take you on a journey with a slight twist at the end as they tug at the heart and bring a reminder of what the season is all about:  the gift of Giving. 

This year’s John Lewis ad is a nice throw-back, almost a hint to the innocence of yesteryear. The kid in the ad has no video games, cell phones or wifi issues. There’s a bit of old-school romance and a cute twist at the end.  But for John Lewis, it’s also a throw-back to the ads of 2009-2011, those years when the John Lewis Christmas ads really broke through with an innocence, simplicity and nice twist.  This year’s “Monty the Penguin” follows that formula, as it follows the life of a boy preparing for Christmas, with a great old song (John Lennon’s “Real Love”) covered by with a young singer (Tom Odell).

Here’s the ad

 

The John Lewis Christmas Series

John Lewis has been doing these Christmas ads for years now.  People around the world, including myself, are now starting to look for them each year.  I know when you run a long running campaign, it takes a lot of creativity to keep it going.  It has a nice song and a twist at the end.  My only complaint is that they are moving away from what first gave me goose bumps. 

For me best one was 2011, about the boy who couldn’t wait for Christmas

This is also a great one from 2010

And you can see the one from 2009.

When you see those 3 ads, you’ll notice a similar formula of those, and realize this year’s ad fits that formula. However, I found both the 2012 and 2013 ads were a bit of a departure.  In 2012, the “snowman” ad felt bit too dark for me with the tone feeling like a slight miss for John Lewis.  

I also found the 2013 ad a bit of a departure, going to animation and utilizing on-line and in-store media. This campaign seems trying too hard to capitalize on their success.

 

Thank you John Lewis for providing such a great campaign

At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To read more on strategy, here is a workshop on HOW TO GET BETTER ADVERTISING, click on the Powerpoint presentation below:

 

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

 

We make Brands better.

We make Brand Leaders better.™

We offer Brand Coaching, where we promise to make your Brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your Brand’s full potential. For our Brand Leader Training, we promise to make your team of Brand Leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

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