You talkin' to ME?

Taco Bell has decided to enter the fast food breakfast market where McDonald's is the entrenched and dominant player in the category.  Obviously Taco Bell needs to up its budget to effectively compete against this Goliath.  The big question is: how to spend the money.

Until now, the launch of Taco Bell breakfast has focused on its product advantages (taste and portability).  The launch ads use competing products as a foil, but the real story was about what Taco Bell has to offer.

Now, Taco Bell has switched gears, producing a long format , three minute film (which I presume will spawn thirty second commercials) focused on making McDonald's a demon ... titled "Routine Republic."  Most of  the message is about how awful McDonald's is ... leaving the Taco Bell message as an afterthought.  I will be anxious to see how this campaign plays out because these kinds of ads are usually more of a hit in the boardroom (where executives celebrate with fist pumps as they watch film that trashes the evil empire) than with consumers, who may be perfectly happy with McDonald's.  Click here to see the film. 


If I were a Taco Bell executive, I would be especially concerned about the cost of this little film. I'm sure it wasn't cheap. Competing with McDonald's is going to cost a lot.  Producing a three minute film whose primary audience is the executive boardroom takes a big chunk out of the budget.

Camouflage Envy

As a US Navy veteran, I'm amused to see developments in this once very traditional branch of the service.  When I served, there was a saying that the Navy was "200 years of tradition untouched by progress."

Much has changed.  Women now serve on ships (unthinkable in my day).  Openly gay service personnel (that was a disqualifier for service until recently).  Increased (even generous) benefits and amenities.

Despite all that, the Navy kept many of its traditions and its "esprit de corps."

A relatively recent change may be a symbol that the unique esprit of the Navy is eroding.

The Navy has introduced (drum roll) blue camouflage work uniforms.  I suspect they did this because Navy personnel see their counterparts in the Army and Marines with camouflage ... and are envious because the uniforms are "cool."  Of course, there is a reason for camouflage in the services with ground operations.  They are, literally, meant to provide cover.  What's the purpose in the Navy?

One wag commenting on this change noted:  If you fall overboard, the last thing you want is camouflage!"

So, will the U.S. go the way of Canada and other foreign services with a single uniform for all branches of the military.  That eliminates the "envy" factor, but it certainly reduces the sense of identity and esprit de corps which has been a hallmark of military professionalism.

Encapsulating Hospitality

Ad for "Nine Hours" Capsule Hotel

On a trip through Asia with a particularly long (twenty hour) layover at Tokyo Narita, I had the opportunity to stay in a "capsule" hotel.  I had heard about these barracks-like accommodations and was curious to see what they were all about.  Essentially, this concept appeals to the "bare bones" traveler and offers virtually no space or amenities.  The benefit ... it's a place to "crash" with a very low price tag for travelers who are stuck in an airport. The price for all night accommodations is 3,900 Yen (under $US40). 

When I say "bare bones" I mean "bare bones."  Check in doesn't look at all like a hotel reception.  Guests are given a bag with a robe, towel, slippers and a toothbrush and pointed to an appropriate door (male or female).  Going through the door, you enter a locker room reminiscent of a gym.  You lock your clothes and other belongings in the locker, put on the robe and head for the showers.  After a shower, you head to the sleeping room, which truly is a

The Locker Room

long hallway with a honeycomb of capsules for sleeping.  The capsules are about seven feet deep three feet (or so) wide) and stacked two high.  Two get to the upper capsule, the guest has to navigate a set of steps built into the plastic structure.  The only amenities in the capsule are a light, a duvet and a very small shelf.  The capsules are so close that you can hear all the sounds of 75 sleeping guests - including snoring, coughing and entrances and exits.

The men's section of the capsule hotel looked to be sold out, so the concept seems to have some appeal - though I wonder how the concept plays with women.

The Sleeping Pods

In the ever changing world of hospitality product development, it is interesting to see concepts like this at the low end of the market.  While traveling in Europe, I found another concept that was "bare bones" and low price.  When you arrived at the hotel, there was no one at the front desk ... just a vending machine with little glass windows.  If there was a key in the window, the room was available.  If you insert a credit card, the machine dispenses a key and you had a room for the night. A very small, plain room, but at a very low price.  For the hotel ... minimal staff and minimal servicing costs.

These are interesting times indeed for the hospitality industry. 

Value vs. Voodoo

Good, ethical marketing is all about creating value for the customer.  If you create a product that solves a problem or conveys a benefit and provide it at a price that the consumer sees as a value, you're on the road to both profit and customer satisfaction.  I do not begrudge people who make fortunes creating value ... Bill Gates, Steve Jobs, Larry Ellison, Henry Ford ... the list goes on.

I have a completely different opinion of people who make vast fortunes not by creating value but through artifice ... through sleight of hand ... through manipulating systems.  These are the people that brought you the great recession of 2008 ... Enron ... the savings and loan crisis ... the list goes on.  These very powerful and wealthy companies, in my estimation, are practicing voodoo, not value.  In the end, the voodoo approach is inherently risky precisely because it is not built on true value. 

I'm not the only one that sees the folly of their ways.  Warren Buffett weighed in on the issue in his

Warren Buffett

annual letter to shareholders.  Some pithy quotes from the letter:

"Money-shufflers don't come cheap," he notes.  Bankers, lawyers and consultants are "a lot of mouths with expensive tastes."  And they are "always ready to  suspend disbelief when dubious maneuvers are used to manufacture rising per-share earnings, particularly if these acrobatics produce mergers that generate huge fees for investment bankers." 

I'm delighted that the "Wizard of Omaha" has spoken out.  I hope someone is listening.  

The Unchangeable Power of the Value Equation

In Hawaii, we regularly see business cycles that careen between boom and bust.  Looking carefully, any marketer will notice that an underlying cause of the cycles is upsetting equilibrium in the brand's value equation.

The value equation, very simply, is in equilibrium, when the customer is getting approximately the same value from a product or service as its cost.

The problem in maintaining equilibrium, as usual, is greed.  In Hawaii, as visitor counts rise, hotels start raising room rates.  That would be okay as long as the hotels improved their level of service, targeted a different customer, or if the destination was able to enhance the brand to increase its appeal.  Unfortunately, the opposite often happens.  While demand and occupancy are high, hotels are often loathe to increase staffing, so service levels actually go down.  And, bingo, the value equation is out of balance.

So, time and again, we see the same story.  Boom, then bust.  High occupancy followed by screaming price promotions when occupancy falls off.

All it takes to remedy this is to hire some good, strategic marketers and take the long term view of the business.   

This is Unbelievable. Literally Unbelievable.

Hawaiian Airlines just announced that it is reconfiguring all of its inter-island aircraft with new seats that have an inch less legroom and no capacity to recline (at all). 

A company press release included this quote:

"The new lightweight seats are engineered to ensure a maximum amount of personal space without compromising legroom or comfort," said Peter Ingram, chief commercial officer for Hawaiian, in a news release.

Does anyone believe this?  Does anyone at Hawaiian Airlines (in their heart of hearts) believe this?

This is the sort of PR obfuscation that give Public Relations (and Marketing) a bad name.

If the truth is that Hawaiian is cramming more seats in its aircraft to make more money for its shareholders, it ought to say that.  Or, at least, it ought to make the change without issuing a press release.

I once heard a good definition of insanity.  It's when you start believing your own press releases.