IMKTG REPORT December 17 2002

al berrios IMKTG REPORT 12.17.02: Cosmetics, Fashion; more…

THIS WEEK'S CONTENTS ARE:
[1] JUST SAY IT: Overview, Rothschild, Goldman, Ford, Happy Holidays
[2] BRANDSTRATEGY: Interview With Jon Mindell
[3] CONSUMERFOCUS: Study: Media Habits of Cosmetics Users
[4] MEDIA: Paid Online Content - A Payer's Point of View
[5] MANAGEMENT: Fashion, An Analysis

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[1] JUST SAY IT: Overview and Contest

>> "We have already seen that it was common practice for European politicians of the period (1820s) to accept favours - ranging from investment tips to outright bribes - from bankers." Ferguson, Niall, "The House of Rothschild: Money's Prophets 1798 - 1848", Penguin Books, 1998, p. 153.

Good morning execs,

This is the last IMKTG REPORT for the year until January 7th, 2003. By that time, our archives will be revamped, with better navigation, and menu. Slightly longer than usual there are some real treats in today's edition: two interviews and a new consumer study.

So I'm reading this million-page tomb (actually a really good 513-pager) on the Rothschild family, a tremendously wealthy clan from the 1800s Europe. These guys bought countries for fun. Anyway, as the quote above shows, even as far back as their day, inside information, gift-giving, and exclusive shares in top underwriting business was necessary in order to establish the relationships needed to make more money. Fast forward to this inquiry Ford Motor Company is conducting to investigate shares received by their chairman (and practically American royalty), William Ford, from Goldman, Sachs' IPO in 1999. This was instigated by a lawsuit from a Ford investor that felt that the profits from that allocation belongs to the company, (and consequently, himself, as an investor.) Goldman has been part of the Ford dynasty since 1951, when the then-current senior partner served on the board. Since then, the relationship has endured, with Goldman recently billing $86 million in fees for certain financial services. $86,000,000. If I were William Ford, I'd expect at least a nice "Thank You" card for having spent so much on one company. And indeed, Goldman expressed their appreciation the best way they knew how - shares in their IPO. It's clear that there has been too many recent corporate "hiccups" lately, but if you've worked your whole life (or in Bill's case, 4 generations) to get where you are, shouldn't you be entitled to the benefits? After all, why bother working so hard, having more initiative and drive than the next guy, to make your company successful, if in the end, you can't enjoy disgusting amounts of money? If there were no incentives to succeed, we'd all be like this leech trying to sue Bill Ford right now. Don't read incorrectly - I'm not advocating corporate fraud. I am advocating the rights of the senior executive, who are regular joes, regardless how many zeros are after their paychecks. Some get greedy, granted, however, some people are good at being broke and some are good at making money. Ask yourself, do you like being around some broke friend, always begging you for something or would you prefer to be around a successful person, who's success radiates to all those around him/her? Think about that as you suddenly decide to publicly prosecute the next CEO that made you a couple of thousand, but only lost you a couple of hundred.

Happy Holidays, Enjoy the rest.

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[2] BRANDSTRATEGY: Interview With Jon Mindell

Jon Mindell is best known as the adman that came up with the Pillsbury copy: "My Heart To Yours". Has co-written and supervised Gillette's Right Guard copy featuring athletes in the mid-90s. For P&G, he worked on Folgers coffee, and wrote, among other spots, the "Irish Dance Morning" commercial. Today, Jon is adjunct professor of Copywriting at Baruch College's Zicklin School of Business. I recently had the opportunity to sit in on one of his lectures to see this professional at work. Afterwards, via email, we exchanged the following discussion:

IMKTG REPORT: Why are ideas still important?

JMINDELL: In my book, ideas have never stopped being important. They're the only thing that makes it possible to differentiate your product or service over time---good times and not-so-good. The style of presenting ideas has changed and sometimes, it just buries the idea. But if the idea is true to the product or service, relevant to the consumer, and involving (or entertaining), it has a better chance to succeed than advertising with no idea.

IR: What are your thoughts on the state of advertising today?

JM: The state of advertising is amazingly strong, in my view. You just can't get too close to the battle or you'll get confused, if not scared witless. Despite, the economic slowdown (cutbacks), so-so morale (layoffs), negative and damaging business news (Enron, WorldCom, etc.), a sea change in our national state of mind (9/11, and the resultant war in Afghanistan,), advertising has held up--still stimulating sales, brand recognition, new product acceptance and most impressively, emerged as a voice of patriotic rejuvenation and humane compassion in this post-9/11 era.

IM: What do think consumers expect, with regards to communications, from their brands?

JM: We know so much more about "the consumer" these days and all the different markets and segments that it's harder than ever, if not foolhardy, to generalize. The one common denominator remains: the conflict between the expectation that brands hold to their promise and image and yet somehow compete with the generics, store brands, catalog labels and internet creations they see everyday.

IM: In your opinion, are future creatives prepared to address future client needs?

JM: The ones that have that passion for the work, and the talent, are certainly ready, but almost to fault. They become so sophisticated by the time they actually get a job at an agency, they go through a culture shock in the business they've worked so hard to join - no matter how well prepared they are. But without that preparation, they just wouldn't get to first base theses days.

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[3] CONSUMERFOCUS: Study: Media Habits of Cosmetics Users

Last week, four ladies associated with my firm completed a traditional consumer study on the media habits of cosmetics users and the response they were able to garner from women was overwhelming. In their study, Chiara Alcivar, Yojaira Cordero, Jeimy Monegro, and Angelica Vazquez, discovered lipstick is the #1 cosmetic women purchase, with Revlon being #1 preferred brand. Turns out magazines are the best place to reach buyers, followed by WOM, then TV. Internet faired poorly. (You won't believe!). But this makes sense since 93% of our population preferred to sample products before purchasing them.

BOTTOM LINE: Each brand, from Mac to Victoria's Secret Beauty illicits a different perception from women. When told that they would be eligible for discounts for a specific brand, response to the survey expanded virally - yes, they spread the word via email so fast that over 20% of respondents replied to the survey within 8 hours. As sales of women's fragrances are expected to fall to a projected 5% this year, it's important to keep in mind that women are very price sensitive, will generate all the WOM you need if there is a perceived value, and really need to try something on before buying it, but don't like being attacked in the aisles.

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[4] MEDIA: Paid Online Content - A Payer's Point of View

As I'm sure you've noticed by now, I recently became a member of the Wall Street Journal family, and it is overwhelming for a news junkie like me. Although I know how to read monsters like the Journal, I can't help going cover-to-cover - daily. Then I log on to see what I missed. Folks, it's about as easy as reading the dictionary, but in the spirit of discovering the consumer's point of view towards paying for online content, I did it.

BOTTOM LINE: As we learned from our Executive Media/Marketing Panel, the same consumers have different ways of consuming different media. Offline, it's not necessarily about convenience of finding what you want to read more than it is being able to read it at any time, in any portion. Online doesn't have the flexibility, (unless you print it), but the single greatest advantage is being able to locate what you want to read, plus related articles, in seconds, dating back as far as you want. (Try doing that offline.) I suppose one could say that print is more credible. However, to fight the stigma of credibility still associated to the internet, the WSJ recently launched a campaign explaining why it's better to pay for your content, (it's more reliable), rather than getting it free (no where near as good as paid). I don't entirely agree, since the NYT and Google offer very similar coverage for free online, but then my perspective is skewed. WSJ gets your fingers dirty, is difficult to read on a crowded train, and can only be accessed exclusively via one entry point, the actual publication. Meanwhile, the internet strains your eyes, you can't read at all or fully on a crowded train, and although accessible via multiple points (i.e. search engines, other sites, PDAs), typically don't include as many illustrations, graphics, or even entire articles as uploading times are still not as good. Overall, the internet is all about efficiency, while the print version is all about in-depth research and analysis. The internet is strictly a service medium, while print offers exclusivity. Whether or not you should charge depends on what your reader values most and how much they're willing to pay for it.

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[5] MANAGEMENT: Fashion, An Analysis

It appears that 80s grunge is back. No wait, 70s velour is back. No, wait, 80s basic, classic apparel. In case you missed it, your kids (and probably yourself), have been indulging in comfort products. It's now cool to be simple. History, it seems, is repeating itself. But chances are, the people bringing things back don't even remember "the way it used to be". This resurgence seems to be the result of consumers desire to own fashion that they're familiar with and don't have to be fashionistas to appreciate. "The customer from any price bracket will be able to appreciate this [style] in any which way it is mutated" according to Garan, Inc. associate designer, Clariza Enad.

BOTTOM LINE: "From birth to death, depending upon how many possible mutations it comes out with, I would say [consumer trends in fashion last] about 3 seasons (1.5 years) average. 'Style' trends die out faster, …depending on how exaggerated, can sometimes last only a season, prints and color trends tend to stay longer because there are more possibilities for interpretation." With little visibility into what will become trendy or popular with consumers, or neither, yet still sell very well, designers continue to look to music and Europe for inspiration. However, this still puts mass retailers in the position to follow the lead that isn't a guaranteed success with consumers, and typically, months behind. Who leads? For months, al berrios & co. has been developing the capability to gauge consumer opinions and identify trends in fashion, for teens, adults, male, female. This gives you the visibility to plan successful strategy months in advance of the competition. For more information about this service, please contact Al Berrios at (917) 744 - 6579

Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.

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