Thursday, July 31, 2008


Marketing. knowledge and earthquakes have a lot in common. By the time you model and analyze the data the event has already happened. Working after the fact, reactions are behind the curve. And no matter how hard you study the past, it will not give you all that you need to know for the present. You can plan and anticipate, but it can not predict the next event. You can only fall back on everything you know about earthquakes and/or your business - and that resides within knowledge of established habits and practices. In marketing to consumers, only the ability to create new knowledge, that which does not yet exist (so it can not be gathered and measured) can put you in control and position you ahead of the curve to jolt an industry, business, category, segment or brand like the image here.


I allocate a lot of time to Starbucks because it is a classic example of the rise and fall of a great brand - and because I was one of the company's early adapters in terms of product usage and portfolio holdings. And it all happened in one of the shortest times on record, so it is a great example of what not to do. Time was, you could go into Starbucks with a buck or a buck twenty five and get a great cup of coffee, then expenses and overhead went up as the brand "grew" to become more things to more people. Rather than a great place to go for some quality time that didn't cost an arm and a leg Starbucks became a planned distination for which one had to determine if a stop at an ATM was necessary before dropping by. The beginning of the end.

Now no one believes that recipe dissemination, a few novelty fro-yo drinks, closing stores, trimming the payroll and soliciting user-generated input via an online portal will affect Starbuck's turnaround. The cost reductions are a technical mandate, but the rebuild of unit sales and dollar volume requires the creation of new consumer knowledge (as in tell me something new about yourself) to raise the bar and get foot traffic flowing in the door again. Why not target a number like 400 customers per hour on any given average hour? Why not? That's what Costco does. And why do this? Because every decision Starbucks now makes is based on established consumer habits and practice. And Starbucks already knows what that gets them. I think their stock is trading around $14 a share.

Wednesday, July 30, 2008


With every cut more water is pouring into the hold of the Titanic. Why would you want to fire all those people and let all that experience go to a competitor - just because you couldn't find a better answer?

Everything the past, present and future team at Starbucks knows about its business is based on established consumer habits and practices and no matter how hard you study the past it will never tell you all you need to know for the present. The demand to create new consumer knowledge, that which has never existed to be gathered and measured is essential for Starbucks to immediately generate significant incremental unit and dollar volume sales. And I'd like to demonstrate how that worked at P&G on Folgers and Pampers, just to prove it works everytime to those who think it's impossible to generate incremental AM usage occassions. It is the most immediate way to impact a brand and business. No layoffs, no store closures. Nobody quits when you're making money. So what's to loose?


Yes, as the name implies, the new American super segment to target is the Budgeteers. Much like Disney's original Mouseketeers these current financial American innocents are adults in age only when it comes to managing money. And what would you expect? Since the invention of the credit card in 1958 these financial innocents have been encourage to constantly indulge and dip their hand in the financial cookie jar (it's irresistible) to live far beyond their means so the credit pimp (finance industry) could live well. Hence, America's current financial crisis.

To put a positive spin on Budgeteers would be to think that they are frugal people and manage money well, reading Money Magazine and always putting their money in the accounts that pay the most interest and employ credit cards with the lowest interest rates. But that's not true. That is the minority. The Budgeteers are a much larger vaster segment..."Cornucopia Kids" bred by campaigns like "Life Takes Visa" (and decades of similar before) to consume more than they bring in. They live at the intersection of "can just barely get a credit card" and "I'll never be able to pay all this back." Hooked by the purchase pimp these finance-children, with their hands in the credit and finance cookie jar take out jumbo loans with no doc or easy doc applications, they lease vehicles to have more than they can actually afford, and when they turn leased vehicles in, (more than 70% of the vehicles on the road are leased) the auto industry finds it difficult to dispose of them, which hurts the auto industry. And these are the people who came from the homes that run our finance and mortgage industry today! No wonder it finally got all fouled up. The day of reckoning arrived and it's time to go to the woodshed. It's all illusionary wealth and we blanket ourselves each night in the illusion of financial security while the simmering financial stress drives us to seek Tylenol PM and therapy for attention deficit disorder children unhinged by little more than watching their parents create a daily atmosphere of monetary paranoia and financial misery. That's insecurity. It would be hard for me to pay attention in such a household too.

The smart Budgeteers will learn from this experience and adjust their priorities advancing to middle school. They are the minority. The rest of America's Budgeteers, captured by the financial pimp will continue to be held back in financial elementary school earning their C- and D+ on their report cards. We're a long way from Ray Bradbury's blissful 24th Century Star Trek utopia where human-kind no longer needs money and lives in pursuit of improvement.
We would have a much kinder, gentler and more fiscally responsive America if retailers did away with credit cards and loyalty programs. Just offer good products and friendly service. That would be an incentive for management to get back in touch with employees. Would these businesses, like Home Depot shrink? Of course they would. Down to their "reality" size rather than their credit inflated illusionary bottom lines.

Tuesday, July 29, 2008


Hi. I was just working in my office and an enormous earthquake just hit here in Villa Park, CA in central Orange County, just by the City of Orange, south of Los Angeles. My entire office shook! No camera to play video but the walls rocked. It was a back and forth. Went on for almost 30 seconds. Going to inspect for damage now. Real biggy. More updates if aftershocks occure. Thanks. Sure scared me. Floor moved enough that I stumbled trying to get out. Aftershocks happening now. Dogs barking before. They sense it. Deep. Continuing.


Did I die at Starbucks and wake up in Aunt Gloria Jeans Tea Room? Selling frozen novelty yogurt drinks called Sorbetto at Starbucks is a clear signal the coffee purveyor's brand equity compass is way off track. This isn't even making Howrd Schultz look good if he's trying to stabilize the company for a sale. Selling non coffee drinks at Starbucks, especially frozen yogurt novelties is like Campbells Soup Company selling Chunky Soup as a stew in a can instead of "the soup you eat with a fork." That's how you biuld the equity of a soup company as a soup company. Starbucks. Desperate. The company hasn't even taken coffee 20% of where it can go, and they're already turning in non-coffee directions. And, not to be critical, but those Pepto-Bismol colored splats placed on Starbuck's store floors look like some sick kid yakked. Then people walk on it and it's even more revolting and unappetizing. Looks like some stores in-need-of-repair restrooms. Rating: Thumbs down. Coffee loyalists, Turn around and walk out. Newly [re] appointed marketing head Michelle Gass has her work cut out.

Monday, July 28, 2008


As commodities, heavily price driven US airline brands are going the way of the old Greyhound Bus Lines and dodo bird. What needs are actually served by physical travel save sentiment? If an airline's overhead is so great that it cannot sustain itself, then what should or could an airline become without its hardware and overhead...and what prescient Chairman or CEO is asking this question? With baggage fees bringing in no more than beer money airline marketing seems missing in action. Sure airlines stand for travel, but what does travel stand for? Communication? Enrichment? and how can that be served by communication without travel? Who would be the first airline to compete with Google? And how unlikely would that be? With the first chinks appearing in Google's armour, could an airline remold itself into the next travel/search/communication engine? Is it more likely that this new business entity replace the Face Book? And with a slight twist of wrist revolutionize social marketing and networking? And how would that occur? Where are the Special User Effects that are the underpinnings of great unique selling propositions? (like the identification of 'development' that took Pampers $1.6 billion in annual sales beyond 'fit' and 'dryness') Where are the reasons to try an airline, and if I try it and like it to fly it again? When the industry needs direction most Madison Avenue too seems MIA. Awareness and recognition pap like Fly the friendly skies isn't going to cut the mustard here or impact consumer habits and practices. There is a clear need now for a market share war and not based on price. Two things, 1) when you talk price it spooks those already facing shaky personal and professional budgets; 2) when you talk price (like Chrysler's $2.99 a gallon gas promotion) your brand equity sinks so low you have to climb up a ladder to get to the bottom. Christ! Sell your cars based on their substantiated reason's for being. Cars, airlines = modes of transportation = for business or pleasure. Tell me something I don't know. That's what the brand doctor orders here!

Tuesday, July 22, 2008


Innovation starts in the mind, not in the laboratory - so without stimulating R&D and innovation execs minds beyond their current frames of reference, innovation becomes the next best thing - supplier or vendor ideas, packaging and delivery system evolutions, etc. You can't start in the lab and work backward. You have to start in the mind and go forward.

Saturday, July 19, 2008


One of the fun things about my job is that I get to have new product thoughts no one else has ever had; And the best part about the best ideas is that they always seem to draw connections between two things that have never been connected before, or that have no reason to be connected in the first toilet paper and dieters. Knowledge is the by product (no pun intended) of my unique job in the consumer packaged goods industry (and believe me, I've learned more from the crappy ideas than from the billion dollar winners) - while everyone else is busy scurrying around gathering and measuring data, I create new knowledge for purposes of strategic innovation, consumer insights and new product concept development - quite a number of which have fallen into the 'heavy-hitter' category over the years, and more into the toilet bowl.

But you want to argue with the notion that no one has ever had the idea of "toilet paper for dieters" before? Maybe someone has - so go ahead and Google it because I couldn't find it. And why shouldn't Americans have the right to purchase "toilet paper for dieters." There's an obesity epidemic in America, so a lot of solid material from over consumption is getting flushed down the bowl while we simultaneously try to eat less. It's like a daily good cop bad cop routine. I stuff my face, then feel guilty about it convincing myself that one less leg of fried chicken or one less Pillsbury dinner roll is going to make a difference. I've been drinking Lite beer for years and it hasn't changed my waistline. I flog myself for a lifetime. Yes, one of my clients has been Jenny Craig.

But back to TP for Dieters. You snicker it's a silly idea. Oh yeah!? You wouldn't if you saw it rolled out by P&G and Charmin or KC and Scott Paper. After all it's been A LONG TIME since anyone innovated in the toilet tissue category. A roll of paper has been a roll of paper for since before your grandfather. People used to laugh at the idea of just having a second cold symptom remedy relief product. Everyone used Dristan and incredulously asked why they might need something else. Then we turned their tablet into a liquid. Prototypes were perceived to do a better job of providing night time tranquility. The day before every Consumer Packaged Goods executive laughed at the idea of segmenting the cold symptom relief category. The day after, they had NyQuil. They stopped laughing because NyQuil took nearly 70 share from Dristan overnight and opened the door for the flood of symptom relievers that followed. We just blazed the trail.

So is TP for Dieters a worthwhile idea? Probably not. Because it is the byproduct of my own mind and not that of consumers, and unless consumers say "make it so" the product has no reason-for-being. But if they did want it what might it be like? Would it be slippery or coarse, thick of thin, smooth like Lays or ridged like Ruffles? And why does it have to be flat? Can it be inserted? Would it change color like pregnancy tests to indicate carbohydrate versus protein metabolizing. How about indicating stool moisture content? (And they said I'd be embarrassed speaking with women about their daily hygiene needs for Maxi Pads and Tampons.) I THINK TOILET PAPER SHOULD BECOME DIAGNOSTIC. There'd be a great market in hospitals alone. Would there be different TP segments for people with different weight loss goals? People who want to loose 20 pounds this year versus 40. Is there a competitive segmentation for dieters on TV - Reality Shows like America's Biggest Loser? And then again, there isn't a single toilet paper that gives me a sensual pleasure. Why shouldn't there be one? Sure would make me feel better about over eating. I wonder if the Kinsey Institute for Research in Sex ever looked into this? Probably not because that's not where young executive minds go. But if a guy from IU can go there I'm sure P&G can too. But maybe again, the idea isn't worth the paper it's written on, and then again, maybe it is. Sure are a few technology patent ideas here if someone in innovation at Procter & Gamble or Kimberly-Clark isn't too busy. Googled that too. No patent filings to date. And they say agency creatives have all the fun creative ideas - or the humanists at companies like Ideo or Frog Design. How many've gone here? I bet zero. Because it's not something you can observe by observing existing consumer habits and practices - so that's where they and Clayton Christiansen's theories of disruptive technologies fall short. You have to be able to envision behaviors that have never previously existed and that is what we alone do with our Abstract Dimensioning Mental Processing.

Let's go on. Please help. Comment!

Friday, July 18, 2008


Most marketers are busy crunching numbers today, like they did yesterday, and the day before, and as they will tomorrow. What they are analysing are minute changes in business performance based on standards driving businesses that have not changed in decades. We all drink beer, wine, ale and spirits to address the need states of "to party" or "to relax." There are no other reasons. When our wives had babies we bought disposable diapers that had to "fit" the baby better and keep the baby "dryer." The entire industry remained flat until the revelation that a diaper brand such as Pampers could actually capture toddlers by extending its foot print to "development" sold an incremental $1.6 billion worth of Pampers that year while all the nay sayers suggested there was no way to generate an incremental disposable diaper consumption occasion - but those were not the forward-thinking outward-looking execs.

So to what frequency do consumers tune when dialing in your business? Are you broadcasting a frequency only they can hear? That sure would cut clutter! Why ask this question? Because we all operate with our own definitions of positioning, insight, branding, ad nauseum. And they can't all be correct. There is an overburden of clutter, commoditization and desensitization to ad messages in the marketplace. So how do you tune into that one frequency that reaches that one person (thought leader, early adapter, whatever) that you want to hear your message?

About 24 million consumers ago (that's about how many consumer panelists we've intereacted with face-to-face/not online in the last 40 years) we determined that the insight you want to target is called a Special User Effect. It is not a generic emotion of the sort generated by Hal Riney for Saturn. That division still operates in the red. A Special User Effect is consumer-created (not Madison Avenue or client created) and it is the result of a process that creates new consumer knowledge that has never previously existed to be mapped, gathered or measured. It is not the product of your own mind, my own mind or insight either.

This places the bar higher. That's where "development" came from for Pampers, which grew the business by $1.6 billion that year (now that's an insight). It's also the way the oral care business determined the five category attributes that account for all consumer perceptions in oral care. So I don't really care which agency you are or you hire. Every insight they have will in some way shape or form be somehow inextricably tied to one or more of these five attributes unless you create new breakthrough knowledge. We only brush our teeth for reasons of whitening, breath freshening (includes germ killing), gum care, tartar control and cavity prevention.

Why do I make such a hard line stance and draw my line in the sand here? Because my goal is higher. I don't just sell more product with garden variety insights. I control the definition of categories with the proprietary ability to create new knowledge from the minds of consumers. That's consumer-creativity and it is not the same as merely soliciting user generated input from websites where provided input comes only from consumer's existing frames of reference. Companies only do that because it's cheap. No matter how hard you study the past [that way] it can never give you everything you need for the present.

A brand IS fewer things to fewer people. That is what causes the early adapters to glom on. The novelty is what gives a brand an allure. Then they 9the numbers crunchers and insight hounds) try to make it more things to more people and you can kiss it goodbye. Everyone else is just a follower. A brand IS something that someone started that caught on. The rest of us are merely members of the herd. How do you resurrect a company like GM or a brand like Starbucks? It can only come from the creation of new knowledge. Closing 600 stores, recipe dissemination, a few novelty fro-yo drinks and a MyStarbucksIdea website will not improve Starbucks fortune. They are merely stabilizers and are only preparatory moves to Howard Schultz making another kind of decision, like cashing out.

The frequencies of insights are deafening. There are so many so inconsequential insights echoing against the fundamental building blocks of categories - any category - that we tune them out - noise - commodities we take for granted - which is why agencies and managers get hired and fired all the time. The insights that matter are those that fundamentally change perception in a category and substantively alter consumer habits and practices to a desired goal, solving problems. To that end, there can only be one insight - the rest are all peasants.

Thursday, July 17, 2008


So if a brand is something that a rancher puts on his cattle so that other ranchers or rustlers don't steal them why do CPG companies brand their products? So competitors or brand rustlers won't steal them. Yet in many ways products (cattle) in most categories (pastures) are the same - commodities - and like cattle heavily price driven categories at that, ground roast coffees, disposable diapers, edible oils, etc.) So if the rancher (cattle owner) wants to sell more of his cattle (brand) at auction (chain grocery and drug stores for example) what must he or she do? Make a better product? A steer is a steer. Meat on the hoof is meat on the hoof. And a better product would screw up the margins. I believe that legendary UCLA basketball coach John Wooden had it right when he said, "It's what you learn after you know it all that counts." These ranchers (marketers) have been raising cattle (brands) the same way year after year. The feed (gathered and measured data) comes from the same vendors year after year. It seems to me that the only thing that would make a difference would be to create new knowledge - knowledge that has never previously existed to be gathered and measured. After all, most gathered and measured (cattle/brand feed) data comes from consumer survey panelists who answer questions for points and prizes - they don't even get cash anymore. And if it's done online, you can't even look the panelist in the eye to see if he or she is telling the truth (suspect data). That feed could be anything! I believe creating new knowledge, that which is yet to exist to gather and measure would sire an uber brand. (It made Folgers worth $1.6 billion when auctioned to a brand rancher in Orrville, Ohio. Then everyone else could once again rush to converge on the same position (pasture) saying the same things about themselves (branding) their own way. The symbol (brand) might look different, but the meat inside is pretty much the same (commoditization). To continue doing things the same way would be illogical because no matter how much you study the past (entrenched or shifting consumer habits and practices or beliefs) it will never give you everything you need for the present. Does anyone actually believe that closing a thousand stores, recipe dissemination, a few novelty fro-you drinks and user generated input from MyStarbucksIdea.Com is going to turn Starbucks around? No. It's just trimming the fat to get ready for an auction where Starbucks is the cattle and rancher Schultz can cash out. “A leader is one who sees more than others see, who sees farther than others see, and who sees before others do.” That way the auctioneer (Costco) can't tell the rancher (P&G) how to breed the cattle (Tide). It's called differentiation, which today, can only come from new knowledge. Jeez, I think I've been hanging around CPG companies too long. Starting to sound cynical.

Is making the customer "Believe" in your marketing proposition, a necessary and sufficient condition of a successful sales pitch?

No. You need to identify a Special User Effect which is consumer-created and the by-product of a new knowledge creation process. That way, the belief is already built in. Everything that has come before, via the utilization of assumptions and old knowledge is contrived and less effective.


Did you know that the New York Times is written at an elementary school level? That's because that's the average intelligence level of an adult in America today. They've already forgotten more than they've learned simply because they don't use it every day. And for that reason the muscle gets flabby and weak. Have you ever actually seem a contestant win the Jeff Foxworthy game show Are You Smarter Than A Fifth Grader? Not in my memory. So why are you entrusting the future growth of your business or brand to the input and responses of Americans? To Americans who answer the countless questions and who provide the user-generated input solicited by corporations? Even worse, the use of online research where companies get panelists to respond for points and prizes. You can't even look them in the eye to see if they're telling the truth! Smarter people would only respond for cash! Obviously the airlines, Starbucks and General Motors are listening, and look at the results. And that's the problem. No one is creating new knowledge to take your fifth grade customers to the next level - the level where you want them to be.

By creating new knowledge that has never previously existed to be gathered and measured you could gain a proprietary advantage over rivals and markets in the areas of strategic innovation, consumer insight and new product concept development to invigorate struggling brands and businesses. Does anyone actually think that recipe dissemination, a few novelty fro-yo beverages, closing a thousand stores and a website that does not give consumers the latitude to respond beyond their current frames of reference is going to solve Starbuck's problems? (every question or category in which to respond mimics a store as it exists today. How is starbucks to improve if the existing model is the baseline? All that can be expected are very small incremental...not even evolutionary steps. And that's not the material of a turnaround.) Why create new knowledge? Because no matter how hard you study the past, by asking consumers and customers questions, it can never tell you all you need for the present. How would you expect them to respond? They can only respond within their current frames of reference within long established habits and practices. Without the stimulation required to identify new product potentials and the bigger consumer persuasions beyond, companies have no recourse but to look for bailouts and new merger and acquisition suitors as solutions. That's strike 1,2 and 3 against inbound organic growth. No forward-thinking, outward-looking executives here. Just Pavlov's respondents running large businesses. Knowledge creation is why our clients hit more home runs in more categories than any other.
What's wrong with struggling companies and brands? They know everything there is to know about their business...and nothing new.

Wednesday, July 16, 2008

GM's TurnaWhat

Do you remember that old Hot Tuna rock album You Can Tune A Piano But You Can't Tune A Fish (or was that REO Speedwagon)? Any way - Wagoneer GM CEO Rick Wagoner is up to his same old tricks again slashing jobs and cutting costs in a bid to save GM and keep his "turnawhat" on track. Isn't this what Wagoner does everytime GM's "turnawhat" hits a speedbump? Does he not know that doing the same things the same way and expecting different results is the definition of insanity? Calls to Rick's office went unreturned soliciting the company's need and ability to create new knowledge rather than gather and measure information regarding GM's future new product development efforts. (Hint: unless you come up with bread and butter vehicles like Camrys and Accords GM is going to be SOL. Gone are the days when a Corvette's or Solstice "halo" could save you. And you can also forget the goodwill or excitement of auto shows and good press. That's just stuff you're supposed to do.) Based on latest inquiries we were able to ascertain that it takes GM at least 5 days just to acknowledge receipt of an email or letter to Rick Wagoner. Apparently the earth is slow, but the oxen are patient. I did not invent that line - I stole it from Tom Selick and Bess Armstrong in the movie High Road To China. Well, insider wisdom has it that no one at GM is going to save GM single handedly. How's that for an insider unity statement. When Wagoner turns around to look I'd like to know who he sees following.

Now I've been waiting for GM's turnaround throughout CEO Wagoner's reign, but like the problems facing Starbuck's head Howard Schultz, all I've seen are a lot of "turnawhats". Closing stores, recipe dissemination and throwing a few fro-yo new drinks into the equation will not quite cut the mustard at Starbuck's "turnawhat" either. There's got to be a sale or merger discussion going on in there somewhere - that's what these leaders always do. Just no inventiveness or creativity can be seen galloping to the rescue. (No pun intended with George Gallop or all the other pollsters and information harvesters currently selling data to GM and Starbucks.) Without the ability to create new knowledge to lead the company away from the brink what else are the straight forward linear thinking problem solvers to do? Can I trademark that term (TURNAWHAT) like Pat Riley's "Threepeat?"

Tuesday, July 15, 2008

Join Scour - Get Paid for Searching & Googling

Join Scour and get paid for search. Scour is a peer-to-peer file sharing exchange that aggregates Google, Yahoo and MSN results. By adding the social component or ranking - you - get paid for doing something you already do dozens of times a day. Scour aggregates the search results of Google, Yahoo and MSN - the big 3 - all on one page. Scour is a new search engine working to evolve search and deliver a much greater value to the User. Make Scour your home page and start using it.


While Google, Yahoo, and MSN are incredible search engines, Scour brings all of their greatness together! With Scour, all three engines are searched all at once for you, with the results returned quickly on one page. Every Scour member is able to vote each listing up or down based on its relevance to their keyword as well as comment on their experiences with the site. By blending user feedback with proven search algorithms the Scour community helps shapes the Scour brand of results. Why would you want this aggregation? Because different search engines deliver different results.


Ever spend time searching only to find that the results you need are buried under irrelevant ones? With the Scour voting and comment system, the goal is to introduce the human element of searching allowing you and all other Scour members to speak up and help shape the results with every search. See a result that doesn't match your search? Vote it down? See a site that is exactly what you wanted? Vote it up and tell us all why you liked it. After enough votes, the listings will move down in rank, placing the relevant ones where they should be, at the top! When using Scour you can read user reviews about websites based on your keyword taking a lot of the guesswork out of searching and getting to you destination quicker.

The top search engines make billions of dollars a year in advertising revenue, wouldn't it be cool if the users got a piece of that too? Enter Scour Points! Every member is awarded one point for every search, two for a vote and three for a comment with a maximum of 4 points a search. Once you aggregate at least 6,500 points you can cash them out for a $25 Visa gift card... it's more than you currently make from searching, right? On top of that, we offer referral points for the friends you introduce to Scour where you can earn 25% of the points they make. So if you invited 25 friends that used scour regularly in addition to yourself, that's an easy $125 in your pocket for a year of what you already do! Check out how much you could earn with the Scour Points Calculator. This isn't a pyramid scheme and we're not trying to get you rich quick, we just think it's a good idea to share our success with those who help make it possible.

Play a part in the Scour community and get rewarded for what you already do!

(This copy - for the most part - borrowed from the site. They said it better than I could.) Go to MarketWatch for more information.
My closing comment...the first chink in Google's armour. Time to cash in your stock. Scour is not "it" but the next breakthrough in online search is coming. Scour is a transition - evolutionary. If Microsoft and Yahoo can wait out their merger the affair might become meaningless. The next great thing will happen while they sit on the sidelines like two injured all stars.

Bush - Capades

Why is the United States (or General Motors) a country of people who like to run with scissors? Because there is no adult to tell their leaders not to.

I read an article in this morning's Nation/World section of the Orange County Register suggesting that President Bush will blame the Democratic Congress for continued high gas prices if Congress does not approve his bid to open offshore drilling. Why is this wrong? And what's wrong in general today?

Lack of leadership. Just because execs like Bush or Wagoner have the title doesn't mean they are the leaders. Leadership guru John Maxwell calls this "the myth of position". There is no gas or oil shortage. Lack of confidence in President Bush's National/Global leadership is what is fueling rampant oil price speculation. There is no gas/oil shortage (we don't need any new wells) because if we were running out of oil you'd see oil and gas companies diversifying into non-oil and gas businesses. That's what Philip Morris did when tobacco became taboo and they acquired Kraft. That isn't happening.
What's wrong with companies like GM? Simple. It takes 5 days for GM just to acknowledge receipt of a letter to company head Rick Wagoner. Small things like this add up into a behavior pattern that caused one writer yesterday to call GM a "pointless" company. How is a company to reap the benefits of becoming forward-thinking and outward looking if receptionists at companies like GM and Starbucks are not even allowed to identify decision makers when asked? The knowledge conduit gets capped by the operator.

Regarding business intelligence in America. It is as suspect as the no doc/easy doc loans that got the mortgage/credit industry in trouble. Any research that does not cause an executive to make direct eye contact with an end customer should be suspect.

George Bush, Rick Wagoner. They have a lot in common. What is America's stock price right now? That is what fuels speculation and high gas prices - so if you are a Democrat or Nancy Pelosi (and I'm Republican) don't fall when running with these scissors.

Monday, July 14, 2008

Why are good insights so hard to find?

You know, I just love LinkedIn - the professional online community. Not only is a great place to connect with colleagues, but it is also a great place where smart people ask incredibly interesting questions like, "What is an insight?" Which got me thinking - what is an insight and why are great insights so hard to find given that in my industry - consumer packaged goods - there are thousands of experts looking for them. Are they finding them? I don't know. Based on McKinsey & Company's assessment I think not. McKinsey says, "Despite solid balance sheets and healthy bottom lines CPG executives wonder where their new growth will come from." Since CPG companies are probably most active in the insight field, I then wonder why important insights are so rarely discovered. A while back the rumor circulated that men around the age of 34 shopping for diapers in grocery stores after 8 pm also purchased Budweiser - but that was no biggie. InBev just swallowed them up without even chewing.

Very often, managers view any product, service, idea, technology, or process that is new (to them) or different as an insight or innovation. (Well just because it's new to you doesn't mean it's new to the rest of us) (An old mentor tipped me off to this type of behavior chastising me for being too busy learning everything all over again for the first time) So I think quality insights are so hard to find because we don't know how to find them. Most companies have reliable resources in place to 'gather' and 'measure' data, but gathering and mining data is only a reflection of current consumer habits and practices and no matter how hard you look at the past it will not deliver what you need for the present. So what do you need instead? Why a knowledge creation process of course! Something that can create new consumer knowledge that has not yet existed to be gathered and measured. That's how you improve consumer behavior and take your highly saturated and penetrated category and take it another quantum leap forward - the same way Pampers learned to take disposable diaper's 'fit' and 'dryness' for granted and put the brand on the much larger 'development' footprint back in the early 1980s. Or the same way Folgers went from generic 'sensory' advertising (Mountain Grown/Richest Kind) to 'control's' best part of waking up is caffiene in my cup - recently sold to JM Smucker for $1.6 billion. That stuff sure does help me work and play well with others - especially in the AM! Now that was an insight!

Why else are good insights so hard to find? It's a matter of exposure. The rule of thumb is "The more you expose yourself too the more likely you are to succeed." But apparently you can't expose yourself to a whole lot by gathering and measuring data. And companies don't want to take on additional external resources. Sounds penny wise and pound foolish!

So if business managers are running businesses and making decisions based on gathered and measured data and have not exposed themselved to knowledge creation processes could that be the reason so much of American business is only managed to meet the numbers? Kraft can predict it's sales based on predicted birth rates over the next 5 to 10 years. Doesn't take many if any profound insights to pull that off. Is that the kind of business management that's going to bail Starbucks or General Motors out of a jam? Is this why technology is king in the new creativity economy? Well, lets forget about technology and product design. It's too easy to reverse engineer and copy.

So what is an insight?

An insight is the realization of value from a new solution to a problem that rewrites the rules of the game. In order for something to qualify as a true insight
  • It must engage a creative process,
  • It must be distinctive,
  • And it must yield a measurable impact.

Thursday, July 10, 2008

Chrysler's $2.99 Gas Guarantee

People want to buy products that say smart things about them - but how can American car manufacturers address that need when the price of a company's stock, like General Motors, sells for less than $10 a share? That's not smart - and I don't care how many sharp looking "strivers" and "achievers" you throw into those Cadillac ads and positioning statements under the heading "brand character." Do you want proof that a company's management jumps to conclusions before they jump to the facts? Do you want proof that a company's management does no homework before engaging their mouth? Just look at Chrysler's $2.99 Gas Guarantee promotion. Not only does Chrysler find it difficult to sell cars. Now they're selling gas instead. And once you've sold price your brand equity sinks so low you have to climb up a ladder to get to the bottom. But wait. That's where Chrysler already is. Where is the dramatic turnaround shift? Talking about Chrsler's wonderkind CMO let's quote Casey Stengel who once asked, "Is this all there is, or is this all you got?" Why doesn't each product line have a unique selling proposition instead of generic segmentation? Is it not true that doing the same things the same way and expecting different results is the definition of insanity? Do basics, adventurers and other socio-economic classes of consumers actually see themselves in Wranglers and Cherokees when the stock of American car companies like GM sell for less than $10 a share? The purchase just says, "You're dumb." Years ago my research for GM found people want "to buy products that say smart things about me." Sure, the economy and the housing/mortgage/credit crunch are excuses in combination with the high price of gas - but it's only an excuse - and excuses have to be corrected. I am certain that everything management knows about how to market its vehicles and leverage its brands comes from fine market research processes that gather and measure data. But the trouble with quantifying yesterday is that it does not tell you anything a company needs to know today - at present. As Captain Kirk did in the Kobiashi Maru simulation at Starfleet Academy - Chrysler needs to create new knowledge that does not yet exist to be measured to alter consumer habits and practices and to change the rules of the simulation to win. Except slow moving inventories are not a simulation. Look at this lot. Everyday, we drive past auto malls jam packed with slow moving inventories. Banners proclaim fantastic deals, yet day after day we see the same lots. Why doesn't a dealer get smart and one night after closing remove 80% of his inventory from sight. The next day most of us would think, "Wow! Something's going on. Either there is a blow out clearance sale or the dealer's going bankrupt." The sharks would swim in looking for the deals smelling blood in the water. What a perfect environment and buyer mindset to close the sale. That's what sales people call Jonesing people.

Tuesday, July 08, 2008

When a good business goes bad

What are the outwardly visible warning signs that a good business is going bad? How can you tell when a rapid growth company is turning the corner to becoming a mature earnings company and you can kiss all those lucrative stock splits goodbye?

Hired by Leo Burnett, the EVP Client Service asked me what I thought of rumors that Philip Morris might buy Kraft. I said I thought Philip Morris was preparing to reduce their dependency on tobacco profits from 96% to something in the range of 46%. No one believed me, so no one went after Kraft's new business except me, landing the Kraft BBQ sauce business for myself and not Leo Burnett. And there followed a string of Kraft account work resulting in Kraft's most successful growth period with brands turning in results well beyond anticipated category norms. I made a bundle and so did Kraft.

During that time Starbucks also took off. It was time to buy stock. I'd buy at $22, watch it rise to $44, split, then repeat the process again and again. So how did I know when to get out? When Starbucks launched milder dimensions coffees in a bid to become more things to more people. That was the beginning of the demise of Starbuck's brand equity. It was also the last time the stock grew and split. Starbucks had actually succeeded by being fewer things to fewer people. You had to love that dark roast taste or you didn't. Today my broker told me Starbucks dropped to $14. That's off $4 from four days ago.

What brings my attention to these matters? The price of gas. At nearly $5 a gallon I've come to realize that there's actually no gas shortage. How do I know this? Because when we are really out of gas, the oil companies will begin to diversify into non oil and gas businesses. Then it will be time to worry. Sounds like Philip Morris all over again.

Wednesday, July 02, 2008

My Top Ten Brands

The other day I recieved a poll question from a leading advertising industry trade magazine asking "What is the most genuine brand." I was given the choices J&J, Google and UPS. And I thought "Christ! What's the point of THIS question? Is someone feeling uncertain as to their authenticity (which is just another flavor of the "genuine" selling dimension)?

So I got to thinking. This question is irrelevant to these three, but in my lifetime, what have been my Top 10 Brands? That is, over the last 40 years, when I look back at every consumer good I've ever purchased, which 10 brands have I always purchased - and never purchased a rival? Interesting question right? Well here are my 10 based on product performance profiles.
  1. Q-Tips (feel as good as sex when you use them)

  2. Band-Aids (they stick well)

  3. Neosporin/Polysporin (never bought anything else for scrapes)

  4. Hellmann's Mayo (thank Laura Ries for pointing out REAL)

  5. Coke (and only Coke) (never tried Diet/Zero/New/Vanilla, etc.)

  6. NPR (National Public Radio is the best)(The Christian Science Monitor was a close second)

  7. The Beatles (ok, I do like other bands, but not with the same total immersion)

  8. Walter Cronkite/Chet Huntley/David Brinkley (great news anchor brands - after them, the news became, well, not news)

  9. Acura (biggest bang for the buck - my 91 Legend is over a quarter million miles without a single repair issue. Have only changed the fluids, tires and brakes - still runs like new)

  10. Maxfield Parrish (one of a kind great graphic artist)

As far as any other consumer good or category goes, I must admit, I have accepted substitutes, misplaced my loyalty and shopped on price percieving your brand to be a commodity.

So what's your top ten brand list? Post it here. Do you have an imaginary brand list for new products not yet invented? Mine starts off with Vel-Close and ends with OraQuel. What are they? I'll show you mine if you show me yours. Thanks!

Tuesday, July 01, 2008

About those airline baggage charges

Ever hear the saying about someone being so far down a hole they have to climb up a ladder to get to the bottom? How about the rule that once you trade on price your brand equity sinks so low it has to climb up a ladder to get to the bottom? Once you go price consumers think thrice! Nothing like training another generation of price sensitive travelers! P&G learned that with EDLP (everyday low pricing for the layman). Now Costco tells them how to make Tide or they'll plug the pipeline. So who is in charge of brand equity innovation at American, United, Delta and all the other price wielding baggage charger busways of the skies? If on Madison Avenue "it's all about the strategy" as Eduardo Bottger says at Hispanic agency of note al punto - What ad agency is riding to the rescue with a strategy that gives one of these brands a reason-for-being (that matters)? (Please no more platitudes that failed to move me in the first place) What evidence is there that straight forward problem solvers might listen to an abstract thinker that pinpoints new selling dimensions that are more relevant and resonant to core travelers? And how does that strategy resolve the newly forming habits of meeting online instead? Sounds like a job for Superman. Or maybe American should just sell all of its hardware assets and operations and become the world's first motive conference or motive visit network. Move into Kodak's memory space. What can be logged and filed solely on line. Can I charge for information transfer by the pound? Isn't that what business travel is for? How about tiered pricing for travel purposes? Do we charge a lot less for a trip to grandmas and a lot more to discuss Kraft's brand management? Now that would be some exploratory qualitative answering the questions what could an airline become. What are the future consumption drivers in "travel?" Does travel mean I have to "go" somewhere physically. And how would one "own" that? Just musing. Apologize for incomplete, incoherent or disconnected thoughts. Where's a good no baggage airline when you need one? This is all just taking shape. At some point it will just be cheaper to buy a couple hundred dollars worth of clothes and toiletries once I get to the other end. Could spur whole new terminal retail. And of course, what hotel chain is going to win me over with baggage charge rebates or credits? And why aren't they doing this instead of me writing about it? Get Tom Boddett or those guys from to sing a song and solve the travel woes.