The "SuperSized" Economy; There is no "value added."

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We're headed for more bad economic times. It's not a question as if we're asking, "Are we headed for more economic hardships?" It's a fact. We are. And here's why.
We're headed for more bad times because there's no way to "add value" to the economy the way marketers "add value" to soft drinks by replacing sugar with cheaper high fructose corn syrup. The economy is chock full of artificial ingredients and the only way to return to solid ground is to subtract the "value added" components of the economy that got us in self-induced trouble in the first place.


For example, General Mills "added value" to Wheaties in the 80s by replacing "whole wheat" with non-descript "whole grain." As consumer pull-through diminished retailers began delisting the brand. General Mills had hoped no one would notice the change the same way no one noticed when Coke replaced sugar with HFCS - consumers just drank more because Coke could sell larger quantities (20 ounce bottles vesus 12) for fractions of a cent more. Supersizing was a great way to get a larger share of stomach. But it didn't work with Wheaties. General Mills never gave consumers more product for just a little more money. That was Steve Sanger's fault as inextricably linked to companies such as ADM and Cargill as he is. By repositioning the brand as "whole wheat" again Wheaties increased distribution 24% and won Advertising Age Magazine's recognition as "The Year's Best Repositioned Brand.

The bottom line here is that we've already "SuperSized" the economy the same way McDonald's "supersized us. We found out it was unhealthy. Food scientists are just wonderful.

California Governor's Election - Let's Delist The Candidates

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Who do you vote for when there's no one to vote for? The front runner is front runner simply by means of having the largest budget. She has no political experience outside of the CEO and corporate ladder's suite. The other two ... well ... they're the other two candidates. So what would happen if everyone meaning the popular voters simply did not take part in the election? What if we vote for no one? I know voting is a right and a duty. That makes it more than a privledge. But what does one do when their is no choice and your choice is simply the lesser of three evils? Like a delisted brand in a grocery store voters should delist the products by not voting and blindly following the herd on election day. If we keep doing what we've always done we're going to keep getting what we've always got ... and that's not good for Californians. Are we waiting for newspapers to proclaim THE POLITICAL CRISIS the same way American's had to await for someone to tell them they were creating an economic crisis. Let's start thinking for ourselves people. If anything, vote for someone who's not running. Vote for the reluctant candidate. The guy that really doesn't want the office. Shucks, vote for yourself as a write in candidate What would happen if 36,961,664 voted for themselves? Wouldn't THAT send an appropriate message? What was that line in the movie "Network?" "I'm mad as hell and I'm not going to take it anymore!"

What business are you really in?

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My friend Ray Baird is President of RiechesBaird, one of the world's top B2B ad agencies. Ray publishes a great blog called GigaBrand. Go there. Ray always asks great questions like "What business are you really in?" Now Ray focuses on technology, and in this case he's focussing on ERP technology.  Enterprise resource planning (ERP) is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise wide system environment.

So it's easy to see why Ray asks this question. ERP can easily become a commodity. Now Ray argues that mispositioning can put you in the wrong category and thus retard sales, buyer perception and hence PROFIT. But I say if you sell technology you sell that technology. iPads are selling iPads. If you're selling corneal transplants you're selling corneal transplants. If you're selling ERP you're selling ERP. But look at iPads. As a category they may be the emerging thin clients cloud computing's been wanting to make popular. In the end all human/technology interfaces will be thin clients. But you're still selling iPads. That's your category even though iPads are mostly used for fun. Now that you're in the category, the question is differentiating yourself within the category. Here's what I said.

Exactly Ray, Toss out all quadrant or matrix position systems quant jocks employ. They’ll throw any product, company, brand or category off track because it gives brands nothing they can own or use to differentiate. This is how categories become composed of highly price driven commodities in every category. So we discovered a company, product, brand or category’s reason-for-being best defined by finding it’s Special User Effect.

As General Motor’s proved, you can target exciting fun family products (Pontiac), versus family value products (Chevrolet) but GM killed Pontiac. It’s matrix quadrant was irrelevant to car buyers even though corporate strategy thought it viable. In reality, the division never knew what consumers wanted. It just made what they wanted then told advertising we needed it. That’s bass ackwards. The Pontiac Division never had a “consumer” reason-for-being. Same with brands I turned around like Folgers or Pampers. Though heralded as the second coming of CHrist by quant jocks and market research consumers perceived pre-ground convenience, flavor and aroma as “me-too” cost-of-entry sensory parameters so the agency direction of “Mountain Grown” to support the contention that Folgers was the richest kind of coffee NEVER moved the needle even though my client spent $100 million that year domestically to support the message. The SPECIAL USER EFFECT we found was “stimulation.” Stimulation was a “brand ownable” differentiator versus the “category generic” sales drivers of ‘convenience’, ‘flavor’, and ‘aroma’. To the 23% of heavy users who account for 87% of category volume annually “the best part of [their] waking up is caffiene [Folgers] in their cup.” To them, Folgers is in THE STIMULATION business. With this insight we turned a $300 million brand into a $1.6 billion business by stealing all that share from Maxwell House, MJB & Hills Bros who could not take off their matrix driven “category consumption” blinders. Great post Ray Man. So is the real question, "How should an ERP client best differentiate themselves in a highly price-driven commodity category."

By the way, was speaking to Kraft’s Beverage President Bob Levi who oversees Maxwell House for Kraft Foods. Though he knows all this he still just launched a new flavor and aroma campaign that bounced off the market like spit wads fired at an M1 Abrahms Tank. No impact against the 47 to 14 share lead stimulation gave Folgers…and only Starbucks once came close to hitting our competitive strategy on the head with their “Think Earlier” campaign. Anyway, the same thinking works regardless of what business you’re in.

How do you tell a brand's story? Marketing: Is your brand telling a great story or telling a story greatly?

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How do you tell a brand's story?

Contrary to popular belief most brands tell a great story. At least that's what they believe. In reality they're telling a story greatly. What's the difference? Well, brands that tell stories greatly tend to say the same thing their rival does ... their advertising agency just says it differently. Brands that tell great stories have identified a product based selling dimension that dramatically differentiates themselves from competitors.

What are examples of brands that tell their stories greatly? Well, any category composed of heavily price driven commodity brands such as alcohol (beer, wine, ale, spirits), paper (paper towels, bath tissue, disposable diapers, napkins) or personal care products (shampoos, conditioners, oral care, etc.) ... some of the largest categories in consumer products utilize positioning strategies that converge on the same position as their rival ... they just have ad agencies that say the same thing differently. Detergents all claim to clean better and faster. All alcoholic beverages address the need state "to party" or "to relax." There isn't a single toothpaste (sensitive teeth being the exception) that doesn't trade on one of the five category attributes that account for all consumer perceptions in oral care - whitening, cavity prevention, breath care, gum care and tartar control. Year after year the message gets stale and only updated with new copy and actors ... not product based differentiators. Consequently, their ad spending drives category consumption rather than brand selection - ergo the saying, " I know that at least half of my advertising budget works ... I just don't know which half."

What are examples of brands that tell a great story? Well, Pampers recognized that 'fit' and 'dryness' were generic category cost of entry story parameters. Identifying an infant and toddler's 'development' finally enabled Pampers Phases Developmental Diapers to grow the business (ownable by Pampers) rather than the category by $1.2 billion per year for a decade, better relate to the emotional rewards of parenting and arrest toddler migration to arch rival Kimberly-Clark's Pull Ups. And for a fraction of the previous brand budget. Just one word, "development" made all the difference.

Now that's telling a great story, not telling a story greatly.

Another example of using a product-based selling dimension for the first time no one has seen to tell a great story? Back in the day the big three GRC (Ground Roast Coffee) brands - Maxwell House, Folgers and Hills Bros/MJB all thought people bought their product for convenience, flavor and aroma. Not true. These "me too" cost of entry parameters did not enable the brands to connect with their customer's lifestyles. For example, New Englanders did not spend their Sunday mornings with the New York Times and Maxwell House because of the brand's flavor and aroma. They bought the brand because the best part of their waking up is/was caffiene in their cup. The active product based selling dimension is 'stimulation' not flavor or aroma. This realization turned $300 million Folgers into a $1.6 billion brand and left Maxwell House standing in the dust.

Not long ago I was speaking with a Kraft Foods Marketing Director running the Gevalia Business. He wanted to know if I had any coffee experience. The conversation ended with his exclamation, "So you're the son of a bitch that did that to Maxwell House!" "You need to speak with Bob Levi." Bob is President of Kraft Foods Beverage Business. Having called Bob he listened then said, "Well I've been working for Kraft 22 years and I've never heard of you." And I said, "Well I've been working for Kraft for 35 years and I've never heard of you either. Would you like to hear what I've worked on at Kraft?" He "harumphed" and said I'd never worked at Kraft. I guess he'd better go ask, Karen Scott, Eric Strobel, Bob Morrison, and about 50 other functional line management and C-suite execs who welcomed me to the company to work on their brands. Needless to say I wasn't going to get a chance to work on Maxwell House or for Bob Levi though I've been pitching Maxwell House for about 40 years. Then I saw new advertising for Maxwell House. Same flavor and aroma crap. Bob Levi was so busy putting up walls and protecting his turf he hadn't heard a thing I said.

Now that's telling a great story. Not telling a story greatly.

Forbes Columnist Sramana Mitra features OraQuel on April 15's 1M/1M Strategy Round Table

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Forbes Columnist Sramana Mitra covered my OraQuel and OraQuel's Heart Smart Oral Care positioing on her weekly 1M/1M Strategy Roundtable April 15. I was honored to be selected as the show's opening presenter. Sramana's counsel is that OraQuel is essentially on track and that we need to keep doing what we are doing. Take a listen to the broadcast here. Listen to April 15's Round Table. We like her! Follow up: We were informed that the OraQuel segmant of the broadcast generated more public chat during the chat live segment of the show than any other Round Table business covered to date. That makes us happy too!

About Sramana Mitra

1M/1M Strategy Roundtables for Entrepreneurs

As part of the 1M/1M initiative, Sramana Mitra offers free weekly online strategy roundtables for entrepreneurs looking to discuss positioning, financing, and other aspects of a startup venture. Up to 1,000 people can attend each session, but only the first five who register to pitch will be able to present their business ideas. All attendees are able to join in on the conversations via a live chat.

Sramana Mitra has been an entrepreneur and a strategy consultant in Silicon Valley since 1994. Her fields of experience span from hard core technology disciplines like semiconductors to sophisticated consumer marketing industries including fashion and education. Her current focus, however, is primarily in the realms of Web 3.0 and Enterprise 3.0, and related infrastructure. She has a particular interest in Media and Retail companies and their transition to a Web-centric world.

As an entrepreneur CEO, Sramana founded 3 companies: Dais (Off-shore Software Services), Intarka (Sales Lead Generation and Qualification Software; VC: NEA) and Uuma (Online Personalized Store for selling clothes using Expert Systems software; VC: Redwood). Two of these were acquired, while the third received an acquisition offer from Ralph Lauren which the company did not accept.

As strategy consultant, Sramana has consulted with over 70 companies, including public companies like SAP, Cadence Design Systems, Webex, KLA-Tencor, Tessera, Mercado Libre among others. Her work has also included numerous startups and VCs, and she played Interim VP Marketing roles for 7 such ventures. Sramana has a proven track-record in turn-arounds, both small private companies and divisions of larger companies. She has also created major growth strategies through new market penetration, M&A, Industry Roll-ups, etc.

Writings from Sramana’s popular strategy blog are syndicated by Seeking Alpha, Yahoo! Finance, PaidContent, ReadWriteWeb, Cadwire, Emergic, GigaOm, and many other high traffic online business, finance, and technology publishers. Sramana is also a colmnist for Forbes and the author of Entrepreneur Journeys (Volume One).

Sramana has a Masters degree in EECS from MIT and a Bachelors degree in Computer Science and Economics from Smith College.

Specialties- Positioning.

- Strategic Planning Programs.

- Product strategy, Market strategy, Channel strategy, M&A, Funding, and Exit strategy.

- Business Development, Deal structuring, Negotiation, Opening and Closing deals.

- Communication, Category Creation, Media/Analyst/Investor/Customer/Team facing Messaging.

- Fund raising.

- M&A Deals.

- Turnarounds.

- Strategic Re-engineering and Catalyzing Change.

Official Google Blog: A different kind of company name

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A nice test of brand elasticity. Official Google Blog: A different kind of company name

OraQuel Toothbrush Sterilizer versus VioLight, DenTek and SonicCare UV (ultra violet) Toothbrush Sterilizers

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Ten years ago people scoffed at the notion that links existed between oral infection and heart attack or cardiovascular disease. Now everyone from the American Heart Association to the American Dental Association talk about the onset of plaque and tartar buildup leading to childhood gingivitis leading to heart attack later in life as fact. Eighty-four percent of Americans fail to remove plaque and tartar from our teeth while brushing. This leads to unseen and unfelt gingivitis and according to the American Heart Association the arteries in 72% of heart attack victims are blocked by oral plaque; not cholesterol and fat as all the big pharmaceutical companies want you to believe.

So I'm a big fan of products that draw attention to these facts. Back in the 50's and 60's when I was a child we all gathered around the TV on Sunday evenings to watch Bonanza, Disney (with Walt) and the Ed Sullivan Show. We were all told by advertising to get great dental check ups and to prevent cavities with Crest. Then more oral care brands decided they wanted a share of our toothbrushing occasions and decided that we'd brush our teeth to whiten and brighten, freshen our breath, prevent cavities, take care of our gums and eliminate tartar. And that's the way we've been brushing our teeth for the last 30 years. The current category leader, Colgate Total, took the top spot away from Crest long ago by putting all of these category attributes under one umbrella - theirs. So nothing's changed much right?! Wrong!

There's a new battle for oral care supremacy and it all has to do with providing "Heart Smart Oral Care" as touted by OraQuel; the leading brand in the toothbrush sterilizer segment. Toothbrush sterilizers!? Yes don't get me wrong. Apart from killing germs on a toothbrush toothbrush sterilizers are promoting awareness for the need to change our oral care habits and practices. Now most companies do what they can do. If you are an appliance manufacturer then you want to jump into this game with a toothbrush sterilization appliance - but toothbrush sterilization appliances have a lot of drawbacks: 1) the category (sales) action isn't in killing germs, 2) appliances are expensive, 3) appliances are unable to remove solids like toothpaste residue, food, mucus, blood or tartar that rinsing with water leaves behind, 4) and if I remember from my Gillette Hot Foamy Shave Machine Days - people don't want another appliance cluttering hard-to-keep-clean bathroom countertops that collect water and soap scum stains, hair and anything else.

So why is OraQuel different - or better - than the VioLight, Dentek, SonicCare (UV - ultra violet units) and the steam driven Germ Terminator? Well, usage has to be "interactive" to change consumer habits and practices on a large scale. OraQuel isn't an appliance, it's a spray - and when you (especially children) spray OraQuel on a dirty toothbrush it foams to tell you it's working. Kids love to see it work. So children with OraQuel in the house tend to brush their teeth as much as 33% more often and 20% longer. Delivered to the Good Housekeeping Institute in late 2003, OraQuel won the affection of the Good Housekeeping Institute's Director and staff who all took bottles home for their families. OraQuel was tapped as 2004's Best New Product for Product Innovation in Oral Care.

So how does OraQuel protect your heart? Well, by brushing more often and longer, children do a better job removing the plaque and tartar that promotes gingivitis and that heart attack later in life. Appliances don't generate that type of consumer interest, involvement and excitement (interaction). :) Also, and perhaps more importantly, wetting your toothbrush with OraQuel prior to brushing boosts any toothpaste's ability to cut through that film of plaque and tartar that formed on your teeth overnight while you slept (morning mouth), or during the day while you work. So I put my money where my mouth is and bought OraQuel. Beyond removing plaque, tartar and germs that reinfect every time a toothbrush enters your mouth OraQuel is "Heart Smart Oral Care." I like the company's slogan/positioning. No one else targets this territory.