Coke To Bet More On Sugar Water With Bubbles

Consider two things (paywall):

1. Global soda sales and coke’s soda sales are steadily declining:

The pace of Coke’s global soda volume growth slowed to 1% last year from 3% in 2012 as concerns about health and obesity spread. Last month the World Health Organization suggested that individuals limit consumption of added sugars in food and drinks to 6 teaspoons a day—less than the 9 teaspoons in a 12-ounce can of Coke.

Soda volume in Mexico, Coke’s second-largest market, have fallen an estimated 5% or more since the country introduced a tax on sugary beverages in January.

The new drag on Coke’s U.S. business is diet soda. Diet Coke volume has been down for eight straight years, accelerating the decline in the past three. Diet Coke sales plunged 6.8%, in volume terms last year, according to Beverage Digest.

2. But instead of focusing only on diversifying into non-soda beverages,

…the Atlanta-based company plans to double down on its namesake brand. The company is boosting advertising, introducing new products, and using singer Taylor Swift as a pitchwoman. Chief Executive Muhtar Kent has said that last year, when Coke’s U.S. soda volume dropped 2%, was an anomaly. Soda can return to healthy growth, even in the U.S., especially if it is a brand name like Coke, he said.

“Coca-Cola remains magical. We need to work even harder to enhance the romance of the brand in every corner of the world,” Mr. Kent told investors in February. He regularly refers to flagship Coke as the company’s “oxygen” and “lifeblood.”

For starters, he plans to increase global advertising by $1 billion over the next three years. The company spent $3.3 billion last year. Much of the increase will be devoted to soda, including the Sprite and Fanta brands.

But with even Warren Buffet saying “I’m 100% in accord with Coca-Cola’s business strategy and regard Muhtar Kent as the ideal CEO for Coca-Cola” it’s probably a safe bet that Mr Kent (and Mr Buffett) can see the future of Coke’s bubbly sugar water in a way no one else can.

9.6 Degrees, Cereal And Marketing To Kids

John Brownlee writes in Fast Company about a new study from Cornell’s Food and Brand lab about characters on kids’ cereal boxes:

Cereal boxes aimed at children are specifically designed so that the eyes of the mascots look downward, making direct eye contact with the sugar goblins that they are hoping to seduce.

In a study of over 65 cereals and 86 mascots across 10 different grocery stores in New York and Connecticut, Cornell’s Food and Brand Lab studied the characters on the front of cereal boxes. What they found is that all characters and people on cereal boxes –whether Lucky the Leprechaun, or Michael Jordan on a box of Wheaties–are designed to make eye contact with the intended consumer. In fact, they have almost exactly the same focal point: they are staring out from the box at a spot about four feet away, which is the average distance from the shelf of a customer walking down a supermarket aisle.

The result? When a character looks straight into your eyes, brand trust is 16% higher and brand connectivity, 28% higher.

Not sure whether to file this under the “interesting” category or the “disturbing” one. Perhaps both.

Adventures In Marketing A Delicious Yet Unfamiliar Product

What do you do when you have a delicious (and nutritious) product, but it sounds unfamiliar and off-putting to most when they hear about it?

You roam the country and indulge in reckless sampling (a theme that I cover a few days ago when talking about Kind Bars’ ballooning “sampling” budget).

Today, we consider the case of Sabra’s hummus – something that many Americans have been running into a lot over the last year or two.

Consider this:

Lucille Jennings is sitting in a mall in a suburb of Salt Lake City, about to have her first taste of hummus. The great-grandmother peels back the seal on a small cup of Sabra and peers at the beige mass inside. “You know what that reminds me of?” she says. “Chicken mesh. My mom and dad were farmers, and they ordered baby chicks through the mail. They fed them this kind of stuff.”

But,

According to Sabra, more than 70% of people who try it at a truck purchase some within 60 days. In the past five years, Sabra’s presence in households has gone up 118%. America is ready.

So, how did they respond?

 …in both product and marketing, Sabra has recalibrated to meet Americans where (and how) they already eat. Chief among its efforts: It has six colorful trucks roaming the country to hawk hummus, stopping in cities like Phoenix and Milwaukee for four to six weeks at a time. Staffers hand out tiny packs of the product at supermarkets and churches and Little League games, hoping to lure newbies.

Catch the rest of the story here.

Wisdom From Clorox’s CEO

Recently, I ran into an interview with the CEO of the company that’s best known for Bleach.

Two things that stood out (to be honest, the entire interview/article made for a nice read) I thought should be mandatory reading for CEOs and managers everywhere:

On the heart side, the lesson is that it’s all about your people. If you’re going to engage the best and the brightest and retain them, they’d better think that you care more about them than you care about yourself. They’re not about making you look good.  You’re about making them successful. If you really believe that and act on that, it gains you credibility and trust. You can run an organization based on fear for a short time. But trust is a much more powerful, long-term and sustainable way to drive an organization.

 The other thing I’ve learned is that you’ve got to assume the best intent of people, and that they’re really trying to do a good job. I’ve seen organizations that are based more on fear than trust because senior management really thinks people are trying to get one over on them, that they’re just punching a clock. People really are trying to do a good job, and they want to be proud of where they work. Understanding that helped make me a bit more patient.

What Makes For A Good Manager?

Gallup, in its research, found that just one out of ten people possess all of the 5 traits that make for a good manager:

  1. They motivate every single employee to take action and engage them with a compelling mission and vision.
  2. They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.
  3. They create a culture of clear accountability.
  4. They build relationships that create trust, open dialogue, and full transparency.
  5. They make decisions that are based on productivity, not politics.

But since most promotions are based on individual performance (or worse, seniority), no wonder there are so many bad managers all around…

Corollary: Ever run into an accomplished “individual contributor” that’s chosen to remain that way, spurning promotions to management? I think they deserve respect.

Retail Manipulation

As I’ve wrote here in the past, though we think that we are mostly rational beings that carefully weigh any number of things before acting one way or the other, in reality, we are extremely susceptible to all kinds of external stimuli. 

Retailers, among others, know this of course, and employ every tool there is in their psychological arsenal to lighten our wallets. So how bad is it?

Consider this excerpt from an article that appeared in The Economist all the way back in 2008:

In the Sainsbury’s in Hatch Warren, Basingstoke, south-west of London, it takes a while for the mind to get into a shopping mode. This is why the area immediately inside the entrance of a supermarket is known as the “decompression zone”. People need to slow down and take stock of the surroundings, even if they are regulars. In sales terms this area is a bit of a loss, so it tends to be used more for promotion. Even the multi-packs of beer piled up here are designed more to hint at bargains within than to be lugged round the aisles. Wal-Mart, the world’s biggest retailer, famously employs “greeters” at the entrance to its stores. Whether or not they boost sales, a friendly welcome is said to cut shoplifting. It is harder to steal from nice people.

Immediately to the left in Sainsbury’s is another familiar sight: a “chill zone” for browsing magazines, books and DVDs, tempting impromptu purchases and slowing customers down. But those on a serious mission will keep walking ahead—and the first thing they come to is the fresh fruit and vegetables section.

For shoppers, this makes no sense. Fruit and vegetables can be easily damaged, so they should be bought at the end, not the beginning, of a shopping trip. But psychology is at work here: selecting good wholesome fresh food is an uplifting way to start shopping, and it makes people feel less guilty about reaching for the stodgy stuff later on.

And that’s just the beginning.

The rest of the piece goes into more detail about the many other ways in which shoppers are…influenced (sounds better than “manipulated”, no?), as they walk through the other aisles.

Sampling – The Real World’s Freemium Model

In the software world, the “Freemium” model exists to get users to try out a new service, hopefully like it, get hooked to it and then ultimately start to pay for it because their continued usage triggers some kind of threshold.

So what’s Freemium’s offline counterpart? In some sense, “Sampling”.

That’s what purveyors of new products – shampoo, candy, toothpaste, cereal, etc. – do when they want to introduce something to the public, are not sure if the public will actually like it and pay for it, but want to test the waters beyond focus groups and such. (But it differs from the “Freemium” model in that sampling is a once or twice kind of thing, unlike a Freemium service which could well go on forever. Consider a Dropbox user today that’s might always stay under the 2GB threshold…)

How importance is it, to the rise of new brands and products?

Consider the now-ubiquitous Kind bars. Caroline Fairchild, writing about their rapid spread across the US had this to say:

in 2008, private equity firm VMG Partners invested in the company, although it will not disclose the amount.

Kind bars were sold in just 20,000 locations when VMG got involved. The investors immediately put their capital to work to get the product into more people’s hands with free samples. (CEO) Lubetzky’s sampling budget was $800 in 2008, and he was reluctant to increase it, but by 2009 that budget ballooned to $800,000. Today, Kind spends upwards of $10 million in efforts to get people to try Kind bars. The company has a full-time field marketing team in 25 U.S. markets that organizes sampling in stores, sponsoring sporting events, taking free samples into corporate offices and putting them in gift bags at company events.

The full article touches on other aspects of Kind’s rapid growth – and for anyone (interested) in the CPG space, should make for an interesting read. 

Back To The Blog

It’s good to be back again following a major change…Hope to once again blog here on a semi-regular basis.

GAAP vs Exec Compensation

GAAP is increasingly not good enough for exec compensation.

That’s the argument behind an article in The WSJ today, which chronicles the rise of non-standard metrics in determining exec compensation.

Consider, for example, Goodwill:

Some observers said goodwill write-downs shouldn’t be stripped out. Goodwill is the intangible asset a company carries to account for the excess of what it paid for an acquisition over the net value of the acquiree’s hard assets. Many observers regard goodwill write-downs as acknowledgment that the company overpaid, and so they shouldn’t be excluded from a measure used to evaluate management’s performance.

Medical-device maker Boston Scientific Corp. had goodwill write-downs in five of the last six years, but granted incentive pay to its CEO each year. The company had a $4.1 billion 2012 loss under standard accounting measures, but after excluding a $4.4 billion goodwill write-down and other charges, it had a $933 million profit used to set short-term incentive pay.

I might be naive here, but given the global competition and bidding wars for talent, isn’t this to be expected though?

More, at http://on.wsj.com/1fsCENr.


- Posted from WP Mobile; expect formatting inconsistencies –

Value vs Pricing: Explaining WhatsApp’s Seemingly Insane Valuation

Depending on who you ask, talk to or read, Facebook’s $19B acquisition of WhatsApp provoked three principal emotions since the deal was announced last week – disbelief, fear and envy. Sometimes all three at the same time.

Considering that 235 of the S&P 500 companies, including venerable names such as Southwest Airlines and The Gap have market caps to the south of that magical number, at the heart of the matter lies the question – where did $19B come from?

Here to help us understand this acquisition from a Value vs Pricing perspective (one that makes a lot of sense to me) is Prof Aswath Damodaran, a Professor of Finance at NYU (his blog is eminently worth following; AFAIK, many that are interested in Corporate Finance and Valuations do), who starts off his excellent post by saying:

The first is that there are two different processes at work in markets. There is the pricing process, where the price of an asset (stock, bond or real estate) is set by demand and supply, with all the factors (rational, irrational or just behavioral) that go with this process. The other is the value process where we attempt to attach a value to an asset based upon its fundamentals: cash flows, growth and risk. For shorthand, I will call those who play the pricing game “traders” and those who play the value game “investors”, with no moral judgments attached to either. The second is that while there is absolutely nothing wrong or shameful about being either an investor  (No, you are not a stodgy, boring, stuck-in-the-mud old fogey!!) or a trader (No, you are not a shallow, short term speculator!!), it can be dangerous to think that you can control or even explain how the other side works. When you are wearing your investor cape, you can be mystified by what traders do and react to, and if you are in your trader mode, you are just as likely to be bamboozled by the thought processes of investors.

Cash flows, ROE, growth, users and valuation based on comparables (of sorts) all follow before he draws some conclusions:

  1.  If you are an investor, stop trying to explain price movements on social media companies, using traditional metrics – revenues, operating margins and risk. You will only drive yourself into a frenzy. More important, don’t assume that your rational analysis will determine where the price is going next and act on it and trade on that assumption. In other words, don’t sell short, expecting market vindication for your valuation skills. It won’t come in the short term, may not come in the long term and you may be bankrupt before you are right.
  2. If you are a trader, play the pricing game and stop deluding yourself into believing that this is about fundamentals. Rather than tell me stories about future earnings at Facebook/Twitter/Linkedin, make your buy/sell recommendation based on the number of users and their intensity, since that it what investors are pricing in right now.
  3. If you are a company and you want to play the pricing game, I think that the key is to find that “pricing variable” that matters and try to deliver the best results you can on that variable.

Go read the full post. And when you do that, don’t forget to read its near-poetic and semi-philosophical final paragraph. 

Your Taste In Music = Targeted Political Ads

Add your political inclination to the list of things that can be gleaned from your online footprints. 

As Elizabeth Dwoskin wrote (paywall) in The WSJ a few days ago, Pandora plans to use your playlists to serve up some very targeted political advertising:

The company matches election results with subscribers’ musical preferences by ZIP Code. Then, it labels individual users based on their musical tastes and whether those artists are more frequently listened to in Democratic or Republican areas. Users don’t divulge their political affiliations when they sign up for Pandora. (Take a quiz to see what your playlist says about you.)

Pandora’s effort to pinpoint voter preferences highlights how digital media companies are finding new ways to tap information that users share freely to target advertising. These go beyond the traditional tracking of Web-browsing habits. Pandora, locked in a battle for advertising revenue with Internet radio services such as Spotify, sees political advertising as a way to boost revenue.

“Targeting users is basically the currency in data right now,” says Jack Krawczyk, Pandora’s director of product management. He says companies like Pandora and Facebook, which know users’ names, and can track their media consumption or stated preferences across computers, tablets and phones, have an advantage over companies relying on Web browsing cookies.

While some might yet again bemoan the growing loss of anonymity and privacy on the Web, I suspect that many of today’s young music listeners (and perhaps some older ones too) will simply see this as the price of “free” music – and wait for the next track on their playlist to start. 


100 to 1: How Satya Nadella Became Microsoft’s CEO

The search for CEOs at large global companies – something that is often done under the harsh glare of the media spotlight – has always fascinated me.

How does one downselect candidates? How do some candidates graciously take themselves out of the running? What does the board do when the search seems to go on and on?

For Microsoft-specific answers to these and more, head over to The WSJ for a very interesting look at how Satya Nadella came its 3rd CEO ever – http://on.wsj.com/1dqu4bp.

PS: Of course, good luck to Mr Nadella as he reorients one of the most iconic companies of our times.

Businesses and The Disappearing Middle Class

Politicians and economists have been noting the growing income inequality in the US over the last couple of years.

Now, businesses are noticing too, says Nelson Schwartz on The NYT, given the consumption-driven nature of our economy:

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari (of Washington University in St Louis) and Mr. Cynamon (of the Federal Reserve in St. Louis). Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income, according to the study, which was sponsored by the Institute for New Economic Thinking, a research group in New York.

The effects of this phenomenon are now rippling through one sector after another in the American economy, from retailers and restaurants to hotels, casinos and even appliance makers.

For example, luxury gambling properties like Wynn and the Venetian in Las Vegas are booming, drawing in more high rollers than regional casinos in Atlantic City, upstate New York and Connecticut, which attract a less affluent clientele who are not betting as much, said Steven Kent, an analyst at Goldman Sachs.

Among hotels, revenue per room in the high-end category, which includes brands like the Four Seasons and St. Regis, grew 7.5 percent in 2013, compared with a 4.1 percent gain for midscale properties like Best Western, according to Smith Travel Research.

While spending among the most affluent consumers has managed to propel the economy forward, the sharpening divide is worrying, Mr. Fazzari said.

“It’s going to be hard to maintain strong economic growth with such a large proportion of the population falling behind,” he said. “We might be able to muddle along — but can we really recover?”

Businesses adapting to changing consumer spend is one thing, and good for their investors and employees. But…many of today’s large successful American companies built on a vibrant middle class (that emerged following WWII) and the promise of upward mobility. So if that category starts to shrink, what does that mean for the US, businesses and middle-class jobs that these businesses would have created, in the next 2-3 decades?

Yahoo – Very Much A Work In Progress

No one thought turning around Yahoo was going to be easy. But, many thought (and some dissented) that Marissa Mayer was the one to do it (if it could be done). 

Based on its recent Q4 earnings report though, it looks like this is very much a work in progress – and any major reversal of direction might take a lot more time to accomplish. As Vindu Goel writes on The NYT, advertising revenue trends – the major source of revenue for Yahoo and its ilk – continue to disappoint:

Under the turnaround plan devised by Yahoo’s chief executive, Marissa Mayer, the company gained traffic and mobile users in 2013 and introduced a bevy of products, like a slick digital food magazine and a mobile weather app.

Yet despite Ms. Mayer’s labors, Yahoo is still falling further and further behind in the race for Internet advertising. The company said on Tuesday that revenue and operating profits declined in the fourth quarter of 2013 and would continue dropping in the first quarter of this year.

Analysts project that Yahoo’s biggest competitors, Facebook and Google, will post big gains — especially in the hot area of mobile advertising, where Yahoo is making so little money that it does not even break out the numbers.

The one bright spot? ”Earnings in equity Interests” = stakes in Alibaba and Yahoo Japan, which contributed $222m of the $348m (which also includes a $49m gain from sale of patents) in net income. 

NewImage

Good for those using Yahoo’s stock as a way to gain exposure to Alibaba I guess. At least until the latter’s IPO that’s expected later this year. 


Is there a news/media bubble?

Yes, suggests a WSJ article, blaming an ever increasing number of new media/news sites and programmatic Ad buying – both of which are serving to seriously dent rates for these Ads.

Good for advertisers of course…but what are these media properties to do?

Conferences are one solution. Licensing and newsletters, two others. Not sure that will suffice though…More, at http://on.wsj.com/1frGIcY

Chinese Consumerism, Brands and Marketing

The Economist, in its latest edition, goes into some detail on the (continuing and accelerating) rise of Chinese consumerism, what that means to brands (mostly foreign ones) and how marketing to the Chinese is changing. 

While the full piece is well worth reading, here’s an excerpt that highlights both the promise and peril for multi-national brands: 

Sanford C. Bernstein, a research firm, calls the Chinese “increasingly aspirational and conspicuous consumers” who routinely trade up to fancier labels even on staples. Newly middle-class types in cities in the interior are keen to try out new products, especially the ones they have seen on foreign television shows. Jeff Walters of the Boston Consulting Group (BCG) points out that even country bumpkins are consuming global media, thanks to the wild popularity of local online-video services. Chinese consumers, he says, were watching the latest season of “Downton Abbey” on Youku, a video-sharing website, well before it was released in America.

This passion for fashion is, in theory, good news for multinational marketers. Unlike, say, Japan, where consumers heavily favour local brands, Chinese consumers hold foreign brands in high esteem. Torsten Stocker of AT Kearney, a consultancy, observes that foreign brands are doing well in sectors they introduced to China (chewing gum, chocolate); those that have “heritage” appeal (premium cars, luxury goods) and those where local brands are not trusted, such as powdered baby milk. The world’s fast-food and consumer-goods giants—Procter & Gamble, Pepsi, General Mills and so on—are also big in China, but they are increasingly dogged by local rivals. A recent study by Bain, another consultancy, found that although foreign brands still lead in some areas (biscuits, fabric-softener, bottled water), local brands are surging in others (toothpaste, cosmetics, juice).

Brand-hopping, though, is rife. Having grown up with radical economic change, Chinese shoppers are “very fickle, and hard to pin down to a strong brand loyalty”, says Mintel, a market-research firm. Yuval Atsmon of McKinsey reckons that brand-switching—between Pepsi and Coke, Colgate and Crest, KFC and McDonald’s—is common, “much more so than in most markets”. Swarovski, the crystal-maker, has discovered that over three-quarters of Chinese customers are eager to try new brands, a far higher figure than elsewhere. A recent study by Bain found that the top five brands in ten categories lost 30-60% of their customers between 2011 and 2012.

Anti-Trust vs Cable Industry Consolidation

Anti-trust regulators in the US typically do a pretty good job (IMO) when it comes to preventing “excessive” industry consolidation and concentration of power – things that would otherwise inhibit “healthy” competition and hurt consumers.

So what then to make of Charter or Comcast’s chances of buying Time Warner Cable?

But David Gelles, at the NYT’s DealBook thinks there are two good reasons why either company might be allowed to proceed with the acquisition:

Antitrust regulators are understandably skeptical about allowing big companies to get bigger. However, there are reasons why Charter, or even Comcast, might be able to prevail in its pursuit of Time Warner Cable.

Cable operators make two arguments in favor of consolidation. The first is that broadcast and cable networks are demanding ever higher fees for their programming. Cable operators are being forced to pay up, and the consumer is getting hit with higher cable bills. A bigger company would potentially have more bargaining power, and cable operators argue that they will be have more leverage with the programmers, allowing them to keep costs down and save consumers money.

Perhaps. But a more compelling argument made by the cable operators is that while there are a few big companies that dominate the market, they have very little overlap when it comes to customers. In most markets, consumers don’t have a choice between Comcast, Time Warner Cable or Charter, or even two of those three. In fact, most big markets have only one of these available, which might compete against other telecommunications firms, like Verizon and AT&T, and the satellite operators DirecTV and Dish Network.

#2 is fine, but as a consumer, it will be really nice if we actually see the beneficial effects of argument #1 post-acquisition. 

Marriott And The Millennials

Large global companies that sell to consumers directly are in the process of making sure that they continue to be relevant to tomorrow’s buyers – the millennials, who will shape their profits and growth for the next two decades. And you can see this not just in terms of marketing and Ads but also products and platforms across diverse industries – cars, electronics, food and so on and so forth.

Marriott, which operates more than 660,000 rooms across 16 brands globally, is no different.

So what is it trying to do? Brooks Barnes writes in a highly readable NYT piece that

To win over younger business travelers — and, even more important, to keep them in the Marriott fold when they travel for leisure, particularly overseas — the energetic Mr. Sorenson (Arne Sorenson, the first non-family CEO at Marriott International – Ed.) is relying on a range of strategies.

Core hotels are getting gussied up. In September, the Chicago Marriott O’Hareunveiled $40 million worth of improvements, including a better bar, historically a Marriott weakness. (Some analysts trace that to the company’s Mormon roots.) The Detroit Marriott at the Renaissance Center begins a similar $30 million upgrade in February. The company has been trying to improve what it calls the “guest-room beauty experience” at Marriott-brand hotels — stocking bathrooms, for instance, with a Thai skin care line.

A new ad push, “Travel Brilliantly,” estimated to cost roughly $90 million over three years, reflects Mr. Sorenson’s focus on younger consumers. TV and web ads, taped at international resorts like the Bangkok Marriott Hotel Sukhumvit, intone: “This is not a hotel. It’s an idea that travel should be brilliant. The promise of spaces as expansive as your imagination.” Marriott also offers Xplor, a free smartphone app combining reservations with games; players win loyalty club points by completing challenges at virtual hotels.

“We want people to be saying, ‘Hey, do you see what Marriott just did?’ ” Mr. Sorenson said.

And it is starting new brands and not explicitly associating them with the Marriott name in some parts of the world. In others, it is trying to explicitly link the Ritz Carlton name to its Marriott owners, etc.

A terrific read, that piece.

Billions In Them Sweeteners

The human body is designed to crave sugar, salt and fat. Hence the tens of billions of dollars in sugary, salty and/or fatty foods we all consume day in and out. The price of course, is obesity and attendant health issues. 

So we have Stevia, Aspartame, Sucralose, Sugar alcohols, etc., all of which want to give consumers sweetness without calories and guilt. Unfortunately though, none of them can get the taste part quite right. 

Which is why, Daniel Engber writes in a longish NYT article, companies like Cargill and others are spending a small fortune trying to create that one sweetener to rule them all – either based on an existing product like Stevia:

Deep inside Cargill’s corporate headquarters in Wayzata, Minn., where it runs its $136 billion business, a technician in a hairnet put out a bowl of strawberries. Melanie Goulson, a food scientist in the company’s corn-milling unit, had taken me to a laboratory kitchen outfitted with frying pans and cleavers and stir-plates spinning fluids with Teflon-coated bars. She waited as I dipped a berry in a sample of white granules and popped it in my mouth.

Truvia felt a lot like sugar on my tongue — much more so than the rival brands — but there was something strange about its sweetness. The flavor dawdled and digressed, until it seemed as if I’d chewed a nub of licorice or soaked my gums in watered-down Campari. This has been stevia’s problem from the start: It has a bitter taste that lingers. The defect may be unobtrusive in small doses — the amount you sprinkle in your cappuccino — but it’s ruinous at the quantities it takes to make a diet soda. “Anybody who tasted stevia in 2008, when it was just about to be permitted in the United States,” Fry says, “would have been painfully aware that this was not an aspartame or a sucralose in terms of sweetness quality.”

Goulson and her team have tried to bolster stevia by blending it with other additives. “We’re trying to understand how sweet this product should be,” she said. “What features do people like? What don’t they like? How can we get the recipe just right?” In a perfect world, they’d find a way to sand down the jagged edges of its flavor, so stevia could match the taste of table sugar. (Sugar is “widely accepted as the gold standard for sweet taste,” Goulson told me.) At the very least they’re hoping to make stevia as appetizing as the chemicals in Diet Coke and Diet Pepsi. “Taste is king,” Goulson said. “I mean, the healthiest product in the world really isn’t relevant if people don’t enjoy the taste.”

or by creating a new sweetener based on a plant, fruit or lab-created chemicals (which might be a problem because there’s a strong desire to create something that can be labeled “Natural”; cue Aspartame) or some combination.

With the global market for non-sugar sweeteners estimated at $9.6B just in 2011, this would seem like a worthy quest. 

Getting Celebrities To Use Your Gizmo

Product placements in movies are one way companies try to raise awareness, make an impression and hopefully gain or increase marketshare. Another thing companies do is to have celebrities appear in advertisements where they tell the world that Cream X is the secret to their glowing skin. A third way is to have pop culture celebrities – the kind that are always posting selfies, tweeting, get stalked by paparazzi or have a daytime TV show – actually use their products in a visible way everyday. 

But how to get the latest  gizmo into their hands?

Enter the “super connector”, writes Shane Snow at Fast Company:

On a recent evening in Los Angeles, Dana Brunetti, president of Trigger Street Productions, the company behind The Social Network and House of Cards, arrived at a celebrity dinner party thrown by treats! magazine editor Steve Shaw. The shindig was hosted at the home of Cameron and Tyler Winklevoss, with whom Brunetti had become friends after The Social Network. Your typical L.A.-elite event. Or so he thought.

When he arrived at the luxurious house of Winklevii and sat down at his dinner seat, Brunetti remembered what Shaw had told him in the invitation. “They’re gonna give you a phone.”

Sure enough, a Samsung representative sat waiting for him with a new Galaxy S3 phone, customized for Brunetti’s carrier and with a background image of Brunetti’s name. A dedicated owner of nearly every variety and generation of handheld Apple product ever, Brunetti politely accepted the gift and sat through the Samsung rep’s tutorial while watching the other celebrities, whose facial expressions echoed his own reaction, Yeah, I’m going back to the iPhone as soon as dinner’s over.

But Shaw was a friend, and the S3 phone felt nice in Brunetti’s hand, so he decided to carry both it and his iPhone with him for a month.

“At the end of the month,” he said, “I put the iPhone down.”

The rest of the fascinating piece describes how Samsung, who has been particularly adept at this type of influence-the-influencer marketing, works with Mitch Kanner, the man behind these wildly successful campaigns, to make the magic happen. 

College Themed Fragrances

Every year, students, alumni and others spend more than $4B (yes, that’s a “B”) on college-themed merchandise in the US. And if some schools have anything to say about it, that pie is only going to get bigger, thanks to college-specific, “theme” perfumes and fragrances.

As Arian Campo-Flores and Meredith Rutland wrote in the WSJ a couple of months ago, 

The fragrances are only the latest in a litany of products colleges are hawking under their brands to students, alumni and die-hard sports fans. At Louisiana State University, the list includes garden gnomes, fishing lures and musical bottle openers—not to mention onesies and caskets. “We have licensed products literally from cradle to grave,” says Brian Hommel, director of trademark licensing at LSU, which began selling fragrances by Masik in 2009.

Whether the scents can compete in a crowded U.S. fragrance market—which had $5.8 billion in retail sales in 2012, according to research firm Euromonitor International—remains to be seen.

They need to be “of high enough quality that people genuinely fall in love with the product,” says Matt Frost, vice president of global marketing for International Flavors & Fragrances, which creates scents for brands around the world, though not for specific colleges. “You don’t want to launch a product that ends up as a joke or a gag gift.”

Jason Sager, who earned an M.B.A. at LSU in 2002, says he bought the school’s cologne soon after it was launched, more as a novelty item. But he ended up liking it so much that he ditched Giorgio Armani’s Acqua Di Giò and has been using it ever since. It “definitely smells like LSU,” he says. “It reminds me of the oak trees on campus.”

Since, fundamentally, the only thing that makes most people to buy perfume X or cologne Y is the brand, if this works for colleges, especially those with large student bodies and an even larger alumni base, more power to them. 

 

Twitter Saves Lives. Really.

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(Source: Wikipedia)

Forget targeting, impressions and CPCs.

Social media will now actually save lives (in the case of Twitter, actually it has, I believe, being as it was, the voice of the people in various uprisings across the world over the last several years). 

Sharks in Western Australia swimming close to popular beaches are using Twitter to send warning messages to surfers and swimmers.

The unique project means beach goers can make an informed decision about whether to go in the water knowing a shark is nearby.

Scientists have attached transmitters to more than 320 sharks, including great whites, which monitor their movements up and down the coast.

When a tagged shark swims within about a kilometre of a beach, it triggers an alert which is picked up by computer. That computer then instantly turns the shark’s signal into a short message on Surf Life Saving Western Australia’s (SLSWA) Twitter feed.

The tweet gives the size and breed of the shark, and its approximate location.

Facebook, your turn. 

Bookstores In The Age of Amazon

Shopping for real books in a “real” store was supposed to go the way of the dodo, as anyone not hiding under a rock these past few years knows. 

But interestingly, writes Michael Rosenwald in The WaPo, some bookstores – “indies” no less – are making a comeback of sorts.

Independent bookstores are not dead. In fact, in some of the country’s most urbane and educated communities, they are making a comeback.

In an e-tailing world, their resurgence is driven by e-book growth that has leveled off, dyed-in-the-wool print lovers who won’t (or can’t) abandon page flipping, a new category of hybrid reader (the latest mystery, digital; the latest John Irving, print) and savvy retailers such as the Englands, positioning their stores squarely in the buy-local movement and as a respite from screens.

The American Booksellers Association, which represents independent bookstores, says its membership — it hit a low of 1,600 in 2008 — has grown 6.4 percent in 2013, to 2,022. Sales were up 8 percent in 2012, and those gains have held this year.

Still, as the rest of the article says, their long-term success is far from assured, because of demographics and continuing shifts in consumer behavior. 

So what can book and bookstore lovers such as this writer do, to ward off the (eventual?) demise of bookstores everywhere? Vote with their wallets. 

Retail Customer Service, As A Competitive Differentiator

How do you compete with “Earth’s Most Customer-Centric Company”?

By going well above, and beyond, the call of duty, as Elizabeth Holmes highlights in a WSJ piece today:

“We spend a lot of time, money and energy attracting new customers,” says Richard Baker, chief executive of Hudson’s Bay, Co., owner of Saks Fifth Avenue and Lord & Taylor. “The last thing we want to do is, after all that work, lose a customer over a bad experience.”

That is why Andrea Robins spent several hours on a recent weekday hunting for a handbag. Ms. Robins is Saks’s senior director of customer service, who solves problems that escalate from any of the retailer’s 113 full-price stores and outlets. A customer at a Saks Fifth Avenue store in Florida had bought a $1,850 Gucci bag to be shipped to her daughter in Washington state. The store mistakenly sent it via ground, not air, and the bag wasn’t going to make it in time for the daughter’s birthday.

“It’s not acceptable to say, ‘We’re human and a mistake was made,’ ” Ms. Robins says. “The commitment to service says, ‘Now what are we going to do to fix it?’ “

Ms. Robins and her team first tried to reroute the package to a faster shipping method—but that wouldn’t be fast enough. They considered placing a new order for the handbag with quicker shipping, but it was out of stock. Finally, they called up a Gucci store in Seattle, bought the bag from the retailer and had it sent to the daughter—just in time.

At the “low end” – which probably means anyone buying bags $200 and under – I guess the best bet then is to temper expectations. Or shop at Amazon.

“Stream and Binge” Is Here To Stay

Much to Netflix and audiences’ delight, it looks like binge-watching is here to stay. And, Netflix will continue to create original shows and let them stream all at once as a powerful way to attract new customers and keep existing ones. 

That’s my take, based on an article in The WSJ by John Jurgensen about some data released by Netflix earlier this month:

Netflix only examined users who finished a season within the space of a month. For one serialized drama, 25% of the viewers finished the entire 13-episode season in two days, while it took 48% of them one week to do so. The pace was pretty much the same for a very different kind of show—a sitcom with a 22-episode season: 16% of viewers finished the season in the equivalent of a weekend, while 48% completed it within one week.

That pattern—especially the apparent sweet spot of polishing off one season in a week—was similar across various styles of shows in the sample, including those with audiences that skew male or female, younger or older.

Another finding: The majority of those viewers only immersed themselves in one show at a time, rather than juggle several at once. And whether they’re plowing through three episodes in a stretch or 13, TV watchers identify themselves as bingers.

Want further proof that Netflix-associated and Netflix-driven (created too?) “binge”-watching is the future? Consider what, HBO, Netflix’s bete noire, recently tweeted:

Earlier this week, HBO beckoned students to its streaming video platform with a tweet: “After you survive #FinalsWeek, treat yourself to a week of @HBOGO binge watching. You deserve it.”

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