What Were They Thinking? - and - Who Approved This???

Once again, we're seeing a public company embarrassed by a stupid marketing mistake.  Bud Lite, in an effort to extend its "Up for Anything" marketing campaign added this to its bottles:  The Perfect Beer for Removing No from your Vocabulary for the Night."

Now, I don't know what rock the Budweiser management has been living under, but there has been - for years - concerns about the words "yes" and "no" ... especially around the hugely sensitive issues of rape and drug use.  So, while it made sense to somebody that this line would be identified with the "up for anything" positioning, it set off a firestorm of incredulity.

This is one of those instances where I would have loved to be present in the boardroom when this idea was presented.  Didn't ANYBODY see the problem coming?  Didn't someone pipe up and say "we're gonna get in trouble with that line"?  Didn't the lawyers ... or management ... or ANYBODY catch this clearly insensitive and clueless proposal??   Maybe even a worker at the bottling plant could have noticed this and said "what are you guys thinking?"

I don't know why, but no one stopped this runaway bad idea.  Now Budweiser is making a public apology and dealing with brand damage control. 

The Prognosis Is Not Good

Traditional department stores have been in trouble for some time.  They have been buffeted on one end by big box stores and on the other with specialty retailers and overall with virtual competitors.  Sears, J.C. Penney's and others have been closing stores and cutting back services in a desperate attempt to stay afloat.  Many flagship department stores in major cities have been swallowed up by the likes of Macy's.  But size doesn't seem to be helping Macy's survive. 

Here's the primer for desperation marketing:  When desperate, run sales.  When really desperate, run sales with huge discounts (like 50% or more).  When in extremis, pull out all the stops and go to illogical tactics.  That's what Macy's seems to be doing.  There is always a sale at Macy's and the discounts are often more than 50%.  In that environment, who in their right mind would ever pay full price at Macy's?  And, even at 50% off, Target or WalMart may offer lower prices yet.

In the illogical tactics category, Macy's in Hawaii advertised a "One Day Sale" that was actually two days!!  The big headline says "One Day Sale" but it goes on to say you can shop the sale on Friday and Saturday ... because "it's a sale to big to fit in a day!"  What's next?  Who knows, but it can't be good.

I worked in marketing for a Pizza Hut franchise just as the competition was heating up.  I tried very hard to keep the company focused on quality and points of difference to minimize the amount of discounting we had to do.  Unfortunately, the whole pizza category moved into the world of deep discounts, ruining profitability and turning pizza into a commodity.  Nationally, Pizza Hut is trying to introduce new products to get away from the deep discount game, but I suspect it may be too late.

Once your price integrity is gone, life expectancy can be short, indeed.  

  

Whatever Happened to Proofing?

I don't usually post grammatical sins on my blog - there are just too many of them.  But, here's a headline from the Honolulu Star-Advertiser.  It seems that Kauai is creating a venue for sharks. 

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.