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Thursday, April 8, 2010

Do You Know What Business You're In?

By Margaret Heffernan
April 8th, 2010 @ 8:02 am

You’d think it would be obvious what business you’re in. If you make drills, you’re in the drills business. If you bake cookies, you’re in the cookie business. Right? Wrong.

When Trish Karter started her firm, Dancing Deer, it sprang to fame for unbelievably delicious and beautifully presented cookies. Molasses clove was the best selling cookie (it won the food industry equivalent of an Oscar in 1997), but her peppermint fudge brownies became pretty popular, too. Largely through word of mouth, the bakery had become famous for fantastic indulgences, gorgeous packaging and for the major contribution it made helping the homeless of Boston, where the company was based. Swiftly, Dancing Deer became a very easy business to love. But, like many entrepreneurs, Karter struggled with the company’s growth, especially  with the markedly seasonal nature of her product: sales peaked between Thanksgiving and Valentine’s Day.

But that pattern revealed a different truth: Dancing Deer wasn’t a bakery; it was a gift shop. Most people bought the products as presents — the brownie towers and cookie samplers were mostly seasonal gifts. But of course, if you give cookies one year, you probably don’t want to give the same gift the following year — so unless Dancing Deer offered a great variety, you would move on. This revelation was important: it meant that variety was key to the business and that the talent and effort Karter had always poured into packaging was crucial, not peripheral. It also identified partners and marketing channels previously invisible. In short, it changed the way the company thought about building customer loyalty.

Not knowing what business you’re in is an easy mistake to make. Most film lovers think cinemas are in the movie business, but they’re not. The movie is just the marketing material for the popcorn and the candy, which is where the real profit lies. That popcorn aroma isn’t accidental but deliberate. Cinemas are fast-food businesses, not media businesses. This has profound implications for how they recruit and manage their staff and for how their define and attract their customers.

Do you know what kind of business you’re in? One way to find out is to ask a couple of key questions:
  1. Why do your customers come to you?
  2. When do they buy — and for whom?
  3. Where are the biggest margins in your business?
  4. If your company vanished tomorrow, where would your customers go?
Marketing guru Ted Levitt used  to tell his Harvard Business School students, “People don’t want a quarter-inch drill — they want a quarter-inch hole.” His argument was that most people focus on the product, not the benefit, that they sell. That means they don’t understand their customers and are all too easily blindsided when a competitor comes along, tackling the same problem but offering a different solution.

I wonder: how many CEOs really know what business they’re in?

Saturday, April 3, 2010

BK Wages Breakfast War on McDonald's With New Sandwich


Ads for Cheaper Offering Depict King Breaking Into Rival's Headquarters for McMuffin Recipe


NEW YORK (AdAge.com) -- Burger King is betting big on breakfast with a new national blitz to promote a morning sandwich that's admittedly a lot like McDonald's Egg McMuffin, but cheaper.

In a new 30-second commercial from agency Crispin Porter & Bogusky, BK's mascot, the King -- armed with a flashlight and donning a hoodie -- breaks into McDonald's headquarters in the wee hours of the morning to copy the recipe for McD's Sausage McMuffin with Egg sandwich. A voice-over says, "It's not that original but it's super affordable ... egg, sausage and cheese on a toasted English muffin." (The sandwich is being sold for a $1 at Burger King restaurants. McDonald's doesn't offer that sandwich on its breakfast dollar menu, but it does offer other selections, such as a sausage biscuit and sausage burrito).

Advertising Age Embedded Player


McDonald's doesn't seem to be ruffled by the comparative ad or use of its brand in Burger King's commercials. "Imitation is the sincerest form of flattery," a spokeswoman told Ad Age in an e-mail. "As always, McDonald's continues to focus on its business and customers."

It seems to be the first time that Burger King has shown a likeness of the Golden Arches in its ads, but not the first time McDonald's imagery has made its way into a BK commercial. In July 2008, spots from Crispin showed a couple of young guys wearing Whopper Jr. and Chicken Sandwich getups trying to go into an actual McDonald's location only to get kicked out.
BK's breakfast assault
The latest campaign comes as Burger King prepares to take direct aim at McDonald's breakfast offering -- a segment that the Golden Arches has long dominated and that accounts for McDonald's most-profitable meal. In addition to the new muffin sandwich, which will likely supplant the Croissanwich, BK has launched a major breakfast assault with a series of product introductions such as the BK Breakfast Bowl for $2.79 and has added Seattle's Best Coffee to its menu, replacing coffee provided by Sara Lee Corp. The chain is expected to be making these new products available ahead of a more comprehensive U.S. breakfast platform launching in late 2010.

For fast-feeders in general, breakfast is fast becoming the most competitive day-part, with players such as Starbucks and Subway stepping it up in the space. Subway's new breakfast menu debuts nationally this coming Monday with customizable omelet sandwiches and combo meals.

According to Gary Stibel, founder-CEO of New England Consulting Group, "the breakfast day-part is very important to the industry and sales and traffic will increase as a result" of increased competition by restaurant chains in the space. Breakfast "has suffered because unemployment is so high," Mr. Stibel said, noting Americans "are not running out of the house at 7 in the morning, so it hasn't received the same attention as other day-parts because people aren't going to work."
Winners and losers
He forecasts that Subway, Burger King and McDonald's will all drive sales with their new breakfast offerings, while some of the losers will be casual and family restaurants that serve breakfast.

"The big winner here will be Subway; they've got more locations and theirs is a far more innovative menu," Mr. Stibel said. "Burger King will do better than they have in the past, but honestly they won't do much better than they have in other day-parts because their products are just too similar," he said, adding, "McDonald's is the best at breakfast and you can bet your bottom dollar that they will react and protect their turf."

McDonald's recently began selling oatmeal for $1.99 at restaurants in Baltimore and Washington, taking a page from the playbook of rival Starbucks Corp. When Seattle-based Starbucks launched oatmeal in the fall of 2008, it quickly became the coffee chain's top-selling breakfast food.

According to stats released by Chicago-based Technomic late last month, restaurants are still struggling to bounce back to pre-recession profit margins. The 500 largest U.S. restaurant chains registered a decline in sales, posting a 0.8% annual sales decline in 2009, with U.S. system-wide sales for the top 500 falling to $230 billion in 2009, down almost $2 billion over 2008. 

Friday, April 2, 2010

Axe vs. Old Spice: Whose Media Plan Came Up Smelling Best?

Optimedia's Antony Young Analyzes the Media Strategies Behind Two Leading Men's Brands


Antony Young
Antony Young
March Madness reaches its conclusion next Monday, when the top two teams play for the 2010 NCAA college basketball championship. I'm sure locker rooms and gym bags of the teams competing will have been stocked with body wash and deodorant products from the two brands, whose media plans we're evaluating this month. Unilever's Axe and Procter & Gamble's Old Spice have played more than their fair share of one-on-one ball in recent times. Axe has delivered some irreverent and sometimes controversial campaigns over the years, while Old Spice has rejuvenated the brand to make it more relevant to a younger user. Here, we check out their form and stats across both media plans.

 

 

Creative Campaigns

 
Axe's marketing included unique executions and sponsorships meant to trade on the interests of its core consumer base, young men 18 to 24 years old. Its TV creative for deodorants featured separate spots showing BMXer Adam Jones and professional skateboarder Ryan Sheckler each performing airborne "double pits to chesty" -- in English, a mid-flight spray under the armpits and across the chest. Last summer, it launched Axe Instinct, a leather-inspired scent, with creative that was alternately funny or sexy but either way tagged "The Power of Leather." And in January 2010, Axe introduced the "Clean Your Balls" campaign for the Axe Detailer Shower Tool and Shower Gel on Facebook, YouTube and the recently launched AXECYB.com. The "Cleans Your Balls" video is a three-minute HSN spoof filled with double entendres that stress the importance of maintaining clean "equipment," all while demonstrating the product.
 
Old Spice, for its part, has targeted men over the past couple years with humorous creative featuring the tagline "Smell Like a Man, Man." But it has also branched out to other themes and strategies. Old Spice's most recent work has sought to target not just the core male user, for example, but also women buying personal care products for guys. THIS YEAR IT PROMOTED Red Zone body wash with a spot starring retired NFL running back Isaiah Mustafa, who urges women to get their men to stop using "lady-scented body wash" so they can "smell like a man." It has also developed ads promoting its range of products, tagged "different scents for different gents." And last summer it ran a campaign themed "residue is evil" to promote its Ever Clear formulation (which uses less powder and wax), by warning against the social consequences of underarm residue.


RATINGS

5 stars Outstanding
4 stars Highly effective
3 stars Good
2 stars Disappointing
1 star A disaster


Video Media Strategy

Axe 4 stars
Old Spice 3 1/2 stars
Old Spice topped its video effort around the Isaiah Mustafa spot by including non-traditional, female-saturated vehicles -- Facebook and cinema -- in its ad launch in February. The video ran, for example, in theaters on Valentine's Day weekend. Its TV run included placements on female-skewing cable nets E! and VH1. The clip has become an internet sensation, garnering 5.1 million YouTube views in its first 30 days, spawning numerous video parodies (some not-so friendly), an entry for Mustafa at urbandictionary.com and even a Betty White-like Facebook petition to get Mustafa to host Saturday Night Live. The popularity of the ad even led Mustafa to appear on the Ellen Degeneres show earlier this month. There was an incredible amount of buzz and blog activity around this film.

Axe's YouTube-promoted video "Cleans Your Balls" garnered close to 1.5 million views, which was impressive in that it was done without much support beyond online promotion. Axe also ran a number of brand integrations within shows. It was a featured sponsor of the College Humor prank segment on ABC's Jimmy Kimmel Live, for example, and bought brand mentions on NBC's "Parks and Recreation" and The CW's "Life Unexpected."

Axe actually outspent Old Spice in traditional TV three to one. It placed about 41% of its TV buy across 36 cable stations skewing towards younger, male-targeted networks such as MTV, ESPN, Spike and Comedy Central. It promoted inside the NBA and NCAA basketball play-offs. Additionally, it placed a significant budget (nearly 40%) in syndication to give it unrivaled presence in "Family Guy," "King of the Hill," "South Park" and "Scrubs" re-runs. Old Spice bought a narrower schedule of cable using 17 networks and a wide cross-section of sports broadcasts where Axe had little or no presence: NASCAR, Major League Baseball, the National Football League and college football.

Social Media

Axe 3 stars
Old Spice 4 stars
 
The Axe Facebook page features brand information, a "what's new" section, a sports ticket giveaway featuring NFL quarterback Matthew Stafford and news on upcoming Axe events. Its YouTube channel features recent videos relating to Axe products, particularly the "Double Pits to Chesty" skating and BMX trick.

The Old Spice Facebook page has an impressive 535,000 fans and has posted content that its fan community seems to respond well to. Its wall postings very often have a high number of "likes" and comments. Old Spice's YouTube channel had a plethora of content I hadn't seen before. I chuckled my way through it. 

 
Old Spice is supporting its new line of deodorants through a contest in which two qualified "interns" will travel to exotic locations and report on their scent-inspired adventures through Facebook, Twitter and a blog on oldspice.com. It is enlisting professional snowboarder Gretchen Bleiler and professional surfer Anastasia Ashley as internship mentors.

Online Advertising

Axe 2 1/2 stars
Old Spice 3 stars
Axe ran banners promoting the "CYB" campaign on sites such as Adult Swim, CBSSports.com, PGA TOUR, The Smoking Gun, CBS College Sports, CBSSports.com, comingsoon.net, Rivals.com and Yahoo!

Meanwhile, Old Spice ran the ResidueIsEvil campaign on a combination of male-targeted and video sites such as AskMen.com, BET.com, BlackPlanet.com, BlogSpot, College Humor, ESPN.com, Film.com, GameSpot, Veoh, Yahoo! and YouTube. The click-through destination was an off-putting but probably effective illustration of what residue can look like.

Branded Websites

Axe 4 stars
Old Spice 3 stars
 
In addition to their social media presences, both Axe and Old Spice had multiple brand website destinations.
The Axe home page is currently featuring the Axe Rise Dirty Morning Test, a pop-up site that promotes the company's new scent, Axe Rise. Axe Futbol, part of the company's Hispanic web presence, features a "find the differences" photo-hunt game.

Axe CYB is a page on Break.com featuring the full 3-minute mock-infomercial for the Axe Detailer Shower Tool.
The Old Spice home page features a promotional animation and links to several of its newest television spots.

Magazines

Axe 4 stars
Old Spice 3 stars
 
There were some customized ads that gave Axe an impressive presence in Playboy and Rolling Stone to promote "Axe Instinct." Other titles that were run included GQ, Maxim, Men's Fitness, ESPN the Magazine, Spin and Vibe.

Old Spice ran magazine ads between September and December of 2009: Details, GQ, Entertainment Weekly, Men's Fitness, ESPN the Magazine, Maxim, Sports Illustrated and Men's Health.

Sponsorship/Event Marketing

Axe 4 1/2 stars
Old Spice 3 1/2 stars

While some of Old Spice's online and TV advertising was directed at women, its event marketing remains focused on men with sports being the conduit of choice. In August 2009, Old Spice and the NFL announced a multi-year sponsorship, while it has been an active sponsor of Tony Stewart's car and Nascar for several years now. Finally, to resonate with younger males, Old Spice also has an active sponsorship with Major League Gaming, and every Thanksgiving weekend since 2006 the Old Spice Classic college basketball tournament airs on ESPNU and ESPN2.

Axe has shown a fair bit of enterprise in creating its own branded events. To celebrate and generate PR for the launch of "Clean Your Balls" and AXECYB.com, Axe threw a celebrity-filled party during the Sundance Film Festival. Parties and music have become big business for Axe. While many brands sponsor parties, Axe kicks it up a notch by rebranding popular nightclubs with the moniker "Axe Lounge," as it did all last summer at the Hamptons hot spot Dune, and at Miami's LIV nightclub during a weekend last February. Reaching out to more public areas, Axe scoured Craigslist and MySpace for 20 street musicians and college bands and gave them one thousand dollars to put up "Axe Instinct" signs and give out deodorant samples wherever they played. The buskers even played Cody Chesnutt's "Look Good in Leather" soundtrack from the Axe TV commercial. During New York Fashion Week, Axe promoted its "Rare Leathers" body spray by distributing it at the Duckie Brown show in leather bags.

Other Content

Axe 4 stars
Old Spice N/A
 
Rather than just releasing another iPhone app, Axe showed some extra flair in mobile. It created a print campaign that used mobile phone MMS functionality to encourage readers (after 9 p.m.) to text a number to Axe to complete the missing pieces of a scantily clad model.

It also launched "Pogo Xtreme" a multi-platform gaming initiative including, yes, a game for the iPhone, but also executions for the web and gaming consoles -- part of an "education" campaign to teach guys how to properly use deodorant body spray.

Summary

Axe 4 stars
Old Spice 3 1/2 stars

Old Spice pulled off a terrific online/offline video strategy around its Isaiah Mustafa Old Spice Red Zone campaign and consistently impressed with its social media programs. But Axe slam dunked the media with a high reaching and comprehensive TV and magazine program, complete with imaginative and relevant events and content, delivering a deeper brand media campaign. Axe wins in extra time. 

Meet the Man Your Man Could Smell Like

How Old Spice Pitchman Went From NFL Obscurity to Internet Fame


BATAVIA, Ohio (AdAge.com) -- He was a little-known former NFL wide receiver and relatively obscure actor, but appearing in Old Spice ads has made Isaiah Mustafa something of a cult celebrity, joining the advertising-famous likes of Billy Mays and the Dell Dude.
RIDING OFF INTO YOUTUBE FAME: Tongue-in-cheek ad has scored over 5 million views.

Now better known as "the Man Your Man Could Smell Like," Mr. Mustafa, by Procter & Gamble Co.'s count, had reached 5.8 million viral video views as of last week.

He's also scored a PR bonanza of Snuggie-esque, if perhaps not yet iPadesque, proportions. He was on the "Ellen DeGeneres Show" earlier this month and set to appear on "Oprah" the week of April 5. He's also been featured on NBC's "Today," the "CBS Early Show" and, to complete a trifecta, scheduled for ABC's "Good Morning America," said P&G spokesman Mike Norton.

The PR program wasn't exactly planned, but P&G jumped on the opportunities. "He's generated a lot of buzz because people talked about the ad," Mr. Norton said, which in turn is generating more TV appearances, news and blog posts.
Google Trends data show the ad has generated more search on the phrase "Old Spice" than anything the brand has done since 2004—before Wieden & Kennedy, Portland, Ore., took on the account in 2006. On Twitter, Mr. Mustafa remains merely a micro-celebrity, but has amassed more than 4,600 followers.
 
Many careers
It's all pretty good for a guy who was on four teams in four NFL seasons from 1997 to 2000 but apparently never caught a pass in a regular-season game. Since then, he's also been a middle-school math teacher, run a barbecue restaurant and played a variety of small roles in three feature films and seven TV shows, including "Ugly Betty."
He told the Los Angeles Times' "Ministry of Gossip" blog that he developed the over-the-top delivery of his role only the night before shooting, when he called former Arizona State teammate and former NFL quarterback Jake Plummer, got his voicemail, and left a message delivering his part.

It smacks of accidental success, but the strategy behind Mr. Mustafa's breakthrough is quite deliberate. Ed Shirley, vice chairman-beauty and grooming of P&G, said the idea was for Mr. Mustafa's ad to appeal to women, who still buy most men's grooming products outside of razors. So getting Mr. Mustafa in front of the primarily female audiences of "Ellen" and "Oprah" helps too.

Of course, Unilever's Dove Men+Care is making a similar gambit, creating ads meant to simultaneously get women to buy its products and men to use them. Mr. Mustafa appeared as an Old Spice counter-measure to Unilever's Super Bowl ad and rode the wave of viral-ad buzz from the game.

In the early read, Dove is doing O.K. anyway. Unilever picked up 5 share points in the four weeks ended Feb. 21, according to SymphonyIRI data from Deutsche Bank, to 38.9% in body wash. P&G was down 2.1 points to 17.2% in the same period.