April 4, 2008
05:45 pm | 0 recommendations | Be the first to comment
While walking through Whole Foods this weekend I came across a life size poster-board cutout of a well-known New Orleans chef who has had a successful cooking show and condiments/seasonings line. What caught my eye is that this posterboard chef is holding in his posterboard hand a whiteboard in which anything could be written upon it. Example: Rocky Mountain Oysters @ $6 A Dozen. Obviously not was written, but it made me wonder how does someone surrender control of his likeness/identity - his brand - so easily?
This apparition triggered other random thoughts that tend to jump through my mind like a cable remote control on amphetamines; which ultimately brought about the following question: “Why is that companies that do one thing well feel the need to branch out into other sectors that have no correlation to their core business and dilute their brand?” Are they attempting to attract new customers? Build customer loyalty? Or are they just trying to add to the bottom-line?
In an article from April 25th, Eric Newman who writes for Brandweek tells us that Starbucks is restructuring its entertainment division and shedding its Hear Music label. That a coffee purveyor even has an entertainment division is beyond me. Starbucks customers don't go into a Starbucks for books or CDs, which are impulse buys like candy at the checkout aisle of a supermarket; they go for its coffee. It’s apparent that Starbucks has been attempting to become a lifestyle brand alah Martha Stewart while neglecting its core business. At least branching out into breakfast sandwiches and providing wi-fi internet are related to the coffee shop experience in general.
Keeping with the coffee theme, McDonald’s is another example of a core business strategy gone astray. McDonalds, following Starbucks and Dunkin Donuts, has decided to jump into the caffeine frenzy by promoting its own line of premium coffee drinks.
Jack Russo, an analyst with Edward Jones recently commented in Medill Reports, the journal published by Northwestern University School of Journalism and Marketing Communications, that the addition of coffee bars within McDonald’s could hamper the efficiency of the stores service and adversely influence its bottom line. Russo added further that “McDonald’s can’t afford to lose focus on its core menu; stores have to make sure they have enough space, enough training and enough personnel to continue providing food to customers fast. It might hurt their sales otherwise.”
Personally, I’m not a patron of McDonald’s, but I think ordering a premium coffee from a fast food restaurant is akin to eating at Morton’s steakhouse and ordering fish.
Business need to stay focused on their brand DNA – what makes them successful – and carefully choose what ancillary business lines, products and services to invest in which can distract them from their core business and ultimately dilute their brand’s identity.
***Chase Wegmann is Director of Business Development & Client Strategy for a advertising, branding and marketing agency in New York City***
11:37 am | 1 recommendation | 1 comment
Its funny how everything old is one day new again. Akin to the Johnny Carson days of old, television talk show hosts are communicating sponsors product information directly to their audience. As audiences continue to be battered and overwhelmed by advertising, sponsors are looking for more creative ways to connect with consumers. In the April issue of Conde Nast's Portfolio, Laura Caraccioli-Davis, executive vice president of media planning and buying agency Starcom Worldwide, says late night and syndicated daytime talk shows are offering live commercial options in an effort to combat ad avoidance and the clutter of commercial breaks.
The traditional thirty second spot is dead. Live commercial options are just the latest effort in how agencies are now creating custom branded content such as the action packed trio of "The Hire" movies produced by Fallon Worldwide in 2002 for BMW; to more common strategic product placement within everyday commercial television shows. Custom content, advertisers are finding, produces a larger share-of-discussion with consumers which leads to deeper brand identifiably; whereas with product placement your entrusting your brand to a more subtle tie-in to the popularity of the show within a certain targeted demographic. Audiences notice those Coca-Cola cups sitting atop the judges table on American Idol and identify themselves with the shows characters that choose to drink it. With a live commercial, you are merely taking product placement, and the implicit endorsements that are its by product, to the next level. For a simple direct approach think Oprah's Book of The Month club or products that get hyped on a morning program like The Today Show.
Yet all of this is nothing new. Radio stations have been successfully incorporating live commercials into specific talk shows such as Imus, Howard Stern, Rush Limbaugh etc…for years. Here is a classic case of what works in one medium logically attempting to transition into another. We’ll have to wait and see if audiences buy in.
***Chase Wegmann is Director of Business Development & Client Strategy for a advertising, branding and marketing agency in New York City***
11:22 am | 1 recommendation | Be the first to comment
We are becoming consumers of information. I’d like to point out that there’s a distinct difference in being knowledgeable on a particular subject and having access to that knowledge through the internet. Who needs to be knowledgeable on anything when you have access to a plethora of information readily available? We have forgone, or advanced beyond depending on your viewpoint, from studying and memorization in lieu of a mnemonic approach that offers instant-on access to the information that we need.
Even computers and the way we interact with them have changed. It used to be that we held onto our own information on our own systems. And now with the advent and widespread use of ASP enterprise applications we entrust what we would once be considered information from both a personal and corporate perspective to companies such as Google Aps, Microsoft Office Online and Salesforce.com. The internet is becoming an extension of our brains while our “computers”, which don’t do much computing nowadays, now act as mere nodes or view screens to access our information rather than being the keeper of the flame.
***Chase Wegmann is Director of Business Development & Client Strategy for a advertising, branding and marketing agency in New York City***
12:26 pm | 1 recommendation | Be the first to comment
In an era of corporate social responsibility, how can a multinational company participate as a patron and sponsor of the Olympic Games without tarnishing its image? Even a better question is who would have thought that sponsoring an organization like the Olympics could bring about negative stigma and public opinion?
Transcending politics, the Olympics were intended to assist in contributing to the building a peaceful and better world by educating youth through sport practiced without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play. Although in all fairness, I don’t think there was much in the way of corporate sponsorship envisioned in 1924.
In an era where companies are expected to demonstrate social responsibility, sponsoring the Olympic Games in China - a country with questionable human rights and environmental practices - olympic sponsors can and should prepare for a backlash of some sort. Perhaps the Olympic Committee should expand the charter to request attending countries to impose a moratorium on corporate backlash during the Olympics;h although both sponsors and protest groups will agree that it’s hard to ignore such a huge stage. Branding experts have opined that backlash should have minimal impact on sponsors brands.
Case in point, Lenovo’s top tier sponsorship of the 2008 Summer Olympics in Beijing China should astound no one. Lenovo is a Chinese owned company and a global player on the world stage and markets since its acquisition of IBM’s computer business in 2004 for almost $2B. Being Chinese owned, their risk is minimal. However, other sponsors such as Samsung, Coca-Cola, Visa, McDonalds and GE are global, multinational companies who generally don’t walk into alliances or partnerships without a clear plan of action. These companies are looking to expand their brand to the 1+ billion potential Chinese consumers. Sponsoring the Olympics is good business sense and, in its own way, a demonstration of their good social responsibility.
Additionally, people who care about human rights issues are generally not consumers of the products that these corporations produce. I don’t think you’ll find many Amnesty International employees or volunteers enjoying a Coca-Cola in a McDonalds anytime soon, or, for that matter, anyone in a McDonalds anywhere having deep conversations regarding human rights issues over their Big Macs.
Sponsors assuage themselves by saying that they are moving forward to the spirit and ideals that the Olympics represent. Moreover, the one brand that could come out looking the worst could be the Olympics itself.
***Chase Wegmann is Director of Business Development & Client Strategy for an advertising, branding and marketing agency in New York City***
