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al berrios & co. CONSUMER STRATEGIES REPORT 04.15.03: "The problem is that research can be molded to prove anything..."
THIS WEEK'S CONTENTS ARE:
[1] UPDATES: Exec Summary, Updates
[2] BRANDSTRATEGY: The Incentive Show 2003
[3] CONSUMERFOCUS: ARF Annual Convention and
Research Infoplex 2003
[4] MEDIA: NYNMA ERT featuring Ameet Patel, CTO LabMorgan
[5] MANAGEMENT: Democracy vs. Empire: What Constituents
Prefer
[6] MANAGEMENT EXTRA: The Color of Your Soda
[7] OPINION REPORT EXTRA: A Supersonic Flight for $300?
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[1] UPDATES: Exec Summary, Updates
>> "Empire comes with a price, but has the potential for [huge] financial rewards" - Professor Niall Ferguson, speaking at NYU Stern Office of Alumni Affairs Lecture on his new book "Empire"
Good morning execs,
Happy tax day!
This week, I'm reviewing things learned at 4 different events I attended last week. The most cutting edge strategies and upcoming trends.
This Wednesday, April 16th, yours truly will give a seminar via teleconference on "Trends in Media: Exploiting Non-Media Assets and Re-Assessing Traditional Media's Role in Your Consumer Communications" in a Great Marketing Minds™ - Lessons in Marketing Excellence interview series hosted by Jane Tabachnick eMarketing. To register or to join their mailing list go to http://www.greatmarketingminds.com
Enjoy today's REPORT.
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[2] BRANDSTRATEGY: The Incentive Show 2003
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[4] MEDIA: The New York New Media Association's
Entrepreneurial Roundtable featuring Ameet Patel, CTO LabMorgan
LabMorgan is JPMorganChase's venture investment vehicle. They were a major presence during the dotcom days and continue to invest as much as $5 billion in startup companies and technology-related industries. NYNMA had been a major force during those days to congregate professional services with dotcom visionaries. Recently, they were purchased by a larger organization, The Software & Information Industry Association, and have been able to survive by adapting to the realities of the dotcom culture - it's been replaced by tech-based, shorter-term, realistic revenue-generating opportunities. This event was hosted at JP Morgan Chase's corporate tower on 51st and Park, here in NYC on the 49th floor, so the view was better than fantastic. Since it was a breakfast roundtable, there was free food served, however, it was the worst continental food I've ever tasted, and couldn't fill any of the larger males present that morning. Originally started as a new channel to preach NYNMAs views on technology, as well as turn a new page after their acquisition, these meetings have served as invaluable networking opportunities for entrepreneurs seeking capital and advice. I was fortunate enough to know someone at Chase that sent me an invite, and attended mainly to see if I could take advantage of this networking opportunity. But, what I got was much more than that - I learned what VCs are thinking about today, what they're willing to invest in, and what they predict to be the future of venture investing. The speaker that morning was Ameet Patel, CTO of LabMorgan and veteran survivor of the dotcom days.
BOTTOM LINE: Survival today means resizing and re-engineering your firm to adapt to today's vastly different realities. Approach your processes and methods using proven approaches, such as six sigma, automation, and digitization, because innovation isn't necessarily a new product, but a new process for making an established product. Companies that enhance client growth, personal productivity, and process development are the survivors of the future. Client growth is ebiz deployment, channel integration, cross selling, customer management, and new revenue models. Personal productivity is allowing employees and customers to help themselves with technology, and knowledge management. Process development is collaboration, open architectures, and information transformation all in an effort to make processes more efficient. As Ameet numbered out his 10 tips for emerging companies and CEOs, a major theme connected his entire speech that morning: the customer comes first. It was hard for him to believe that many companies get started or continue to operate without a clear understanding of the consumers they wish to market to. They have no identifiable consumer segment, no pricing strategy, and no communication strategy, yet predict millions in sales within months. In my own experience, this is a problem that reflects how media companies start and operate. With so much niche in the market, they need to resize their firms and use different methods. They need to stop living as though it were "the good ol' days" where a few good advertisers were all you needed for a successful business model and actually work on audience development. Their audience has to experience some tangible value, or personal productivity because of your brand. Media companies need to understand that they aren't the only portals through which advertisers can have relationships with consumers and as a result, they need to offer more than just content, a party, and a database if they wish to survive as an advertiser-dependent business model. Their clients have to experience growth. Ameet's words, as simple and as common sense as they were, resonate across many industries, and al berrios & co. exists to help companies develop and implement these successful strategies.
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[5] MANAGEMENT: Democracy vs. Empire: What Constituents
Prefer from NYU Stern Office of Alumni Affairs Lecture Featuring Niall Ferguson
on "Empire: The Rise and Demise of the British World Order and the Lessons
for Global Power"
Empires aren't bad, according to Professor Niall Ferguson. He wasn't issuing an "apologia" for Great Britain's rule over 25% of the world prior to 1913. Rather, he was defending the benefits of empires done right, and making a connection between British rule and American foreign policies. An extremely witty and entertaining speaker, I attended this event mainly because I enjoyed reading Mr. Ferguson's biography on the Rothschild family so much, I knew it would be worth my while to attend this lecture. In fact, this is without equal, the best lecture I have ever attended. Anything based on events we are already familiar with automatically gets our attention. But Mr. Ferguson's mastery over exact dates and events lent evidence and credibility to his theories. The venue was NYU's Schimmel Auditorium: suitable, well ventilated, and comfortable. Hors d'oeuvre were classy, but in the massive crowd, not very enjoyable. And although it turned his educational event into something commercial, the book sale and signing was effective in allowing Mr. Ferguson to see his fans (a.k.a. readers). Reading his book, it's easy to see how arrogant Mr. Ferguson is, however, after listening to him speak, this arrogance is forgivable. After all, he's only British.
BOTTOM
LINE: Without using
specific dates or events, understanding the value of empires is as simple as
this: it reduces investment risks in emerging markets and other poor international
countries and encourages greater globalization. Based on my analysis of Mr.
Ferguson theories, an empire done right consists of 1) teamwork; 2) quality
personnel; 3) exporting cash/continuous international investments; 4) very long-term
commitments; 5) strong military forces/hierarchical enforcement of policies
and laws; 6) the will to flex all of these components simultaneously. For a
deeper discussion of how America is an empire in denial, figures on Britain
as a case study for the success of empire, and how your business can utilize
empire theories to become extremely successful, contact
me.
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[6] MANAGEMENT EXTRA: The Color of Your Soda
Pepsi Blue failed to meet expectations, yet Mountain Dew's original green color and Code Red extension were hugely successful. But prior to a red color, Cherry Coke, which is same color and cherry flavor as regular Coke worked, so why change what worked? Coke's Fanta brand sells 70% of its volume in orange color, however, they recently released four other fruity and colorful extensions in the U.S. Why not launch Coke Grape with a purple color? Odder, still is that Sprite is launching another extension with Sprite Remix, a clear-color, fruit-flavored carbonated soft drink expected to do well during the summer, when Crystal Pepsi clearly failed a decade earlier. According to David Van Houton, Jr. Executive Vice President and President of Coca-Cola Enterprises, the bottler, not the company, there's no scientific way to determine the preferred color consumers want their soft drinks to be. He assured me, however, that the Coca-Cola Company undoubtedly spends a truck load of money on market research to determine which colors work best with consumers. In an al berrios & co. study into soft drink consumers, 10.1% of Pepsi and Coca-cola drinkers preferred either brand over the other because of flavor, with color never being cited as a reason for choosing either. Instead, color does impact certain health perceptions, such as the cause of bad skin and weight gain, but only amongst a very small percentage of the 1400 consumers interviewed.
BOTTOM LINE: You're probably thinking that a different decade with a new consumer lifestyle group to target will surely succeed. However, again, let's look at Pepsi Blue. As an intensely sweet, intensively carbonated, electric blue, Pepsi believed kids would make it their own. But as they quickly realized, kids didn't particularly enjoy the burning sensation caused by the combination of sugar and carbonation, nor how thirsty it made them after they drank it. To top it off, Pepsi alienated their audience by firing their most preferred artist at the time of launch, Ludacris (covered extensively in this publication) ultimately resulting in a public relations fiasco and harmed sales. Sure there were several factors at play here, but most important was that the color didn't have an effect on the failure of this drink, rather every other factor. Psychologists long ago discovered that color does impact consumer sentiments. Coke is easily identified with the color red, UPS owns brown. But it's apparent that color doesn't impact consumers when it comes to their carbonated soft drinks, meaning that extensive research into consumers' preferred beverage color is a waste of resources, better spent on developing flavors and effective communications of new extensions and products.
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[7] OPINION REPORT EXTRA: A Supersonic Flight for
$300?
Next month signals the end of the Concorde, an airplane that hauled famous and rich butts around the world at twice the speed of sound. Alas, it is yet another stupid decision by the airline industry. Yes, it was absurdly expensive to maintain, however, that's because the most recent versions were built in the 70s. As I discussed in a recent REPORT, innovation in air travel should be speed, not amenities. Delta's new Song airline is relatively cheap to launch and run, and depends on targeting women (an innovation in the marketing of air travel, according to Delta executives), but is also a waste of resources, as they're still traveling to recapture a regional travel market long lost to them from smaller carriers. And as I've stated in another prior REPORT, a better marketing alternative would be to promote their international capabilities, rather than competing on price.
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