Tag Archives: Competition

Tesco’s American Invasion Was DOA

UK grocery company, Tesco, has decided to pull out of their American Invasion and take a $1.8 Billion write-off (with the favorable UK exchange rate – only 1.2 Billion Pounds – it still doesn’t soften the blow of the astounding loss.) Tiffany Hsu’s LA Times article points to Tesco’s misunderstanding of what the public wants and the dire consequences of trying to compete with the Wal-Marts, Costcos, Trader Joes and the like. If Tesco believed those were their competition, their analysis was very off – regardless of recession or not. Tesco saw themselves as something they were not – and in America, it’s foolish to think that customers will save bad branding by finding the hidden gems behind whatever facade is presented. Any way you slice it, its unfortunate that Tesco’s invasion of the American market was dead on arrival.

Courtesy: Freshneasybuzz

Courtesy: Freshneasybuzz

It had a lot more to do with branding, design and store locations than what Americans do or do not want. Admittedly, my exposure is limited to their locations in the Los Angeles market, but it quickly became very clear how Fresh & Easy was positioned counter-intuitively and ineffectively.

The first store I visited was a huge space on heavily trafficked tourist destination Hollywood Boulevard. It was large, dark and depressing. Another location was also in midtown on a heavily trafficked car artery with no abundance of parking spaces. And the last one I was in a week ago was probably the best model of what they should have been doing all along – a small, bright and colorful store in a heavy pedestrian area near USC.

Beyond their questionable locations and early dreary decor, they should have positioned themselves as the perfect last minute spot to pick up quality prepared meals and sundry items on the way to work or on the way home for dinner. They couldn’t/shouldn’t have felt they could compete with the established big markets.

The article compares them to a Wal-Mart, but Tesco should have positioned Fresh & Healthy as more akin to a refined and healthier 7-11 – like their own Tesco Metros back in the UK. That healthy option would have been the right aspirational touch – especially in Southern California.

Fresh & Easy might have worked if they had stronger positioning. It seems they were even unclear on who they were meant to be. Because of that, their marketing never worked. It’s a shame, because if you look at their location near USC, they could have focused on smaller spaces in higher foot-traffic (or more easily accessible) areas to create something akin to the Marks & Spencer Simply Food product in the UK. Another similarity to M&S in the USC location was the automated tellers that allowed staff to be focused around the store to help out in ways you certainly don’t see in a 7-11.

The promise of getting in and out of a market in five minutes with inexpensive essentials and healthy prepared meals would have been something that might have made it a success.

Short of that, its another example of a move that a company should have never ventured in the first place. Or, its an example of a good thing that never had the required clarity and forethought to drive success. Fresh & Easy is Dead. Long Live Fresh & Easy.

GMO As A Law Just Doesn’t Taste Right

Tomorrow, the State of California will be voting on a proposition (or Law) that would require any food item sold in a store to be labeled with wording that it was genetically engineered.  With many of the offices being decided early by the general leanings of the state, some of these state measures are causing the deep conversations and Prop 37 might be causing the biggest division within homes. The sad thing is that it probably shouldn’t even be a law – but a matter of marketing – and that is why this GMO requirement just wouldn’t be right.

The idea that the 3rd generation of mice becoming sterile based on their being fed genetically modified foods is pretty repulsive.  And, the thought that genetically engineered food is thought to be causing autism or any other physical issue is definitely serious.  But the issues don’t necessarily lead to requiring a law be passed – and a poorly written one at that.  What GMO opponents really need is strong marketing.  Strong labeling by the producers who stay away from GMO would do a lot to ensure that people who care can get the food products they need.  Strong marketing by those who can actually profit by people walking away from GMO foods makes more sense.

Courtesy of Robyn Beck / AFP / Getty Images / October 29, 2012

The thought that there should be a law requiring companies who are providing foods that have been (and still are) legal for a couple of decades to incur costs and label their food in a negative form just doesn’t seem right.  The matter is even larger when you consider that companies don’t usually create packaging only for one State.  Their items are packaged for regions in the smallest form, so there would be an inherent effect on other states – probably leading to the fact that the labeling will appear in other states hether they care or not.

Within the past few years, there was another instance where a decades-long accepted process was found to be causing problems.  The stir was around BPA – a chemical used in the creation of plastics that was heavily used in baby bottles.  Research found that there might be risks for infants and children due to extended interaction with products made with BPA.  A law was NOT passed, but companies started labeling their non-BPA products as such to educate and drive consumption.  Those whose products continued as they were (with BPA) have found deeply diminished demand.  The FDA is still doing research and has only suggested that consumers may want to transition to BPA-free products. Even without the final findings or a law, you’d be hard-pressed to find products including BPA in the market.

Those who don’t want to risk eating food with genetically modified ingredients should be able to search out properly marketed products to meet their needs.  Much like people who cared gravitated to Organically labelled products, they can do the same if they are so inclined on these food products.  The interesting thing about the Organic movement is that the positive labelling was called into question due to the relaxed guidelines on what constituted an organic product.  At least those who were not organic were not forced to state that they weren’t.

In the case of Prop 37, it places the honus on those who market products that may be lacking in their genuine health to tout themselves in a negative fashion rather than providing a positive platform for the marketers of GMO-free products.  That doesn’t seem right.

The great thing about Prop 37 is that it opened my eyes to the perceived dangers of GMO foods.  I will now be more aware and search out those foods that were not created using those methods. But I will not be voting for the law that requires products to negatively label themselves. It just doesn’t taste right.

Movie Exhibitors Are Missing The Point

Movie exhibition is a peculiar thing when it comes to responsibility for advertising to drive business. In most other verticals, the responsibility for driving consumer traffic is placed on the store, outlet or platform where the product can be consumed.  Brands do their own bit of communication and advertising, but there is a wholly separate set of advertising to draw people into the stores or experiences – all predicated on why one is a better experience than the other. With the movie industry, for the most part, the responsibility is placed entirely on the brands (studios) to drive traffic to the “stores” (Movie Cinemas). So, any exhibitor, or theater chain, is missing the point when lamenting diminishing business – they need to start working on pushing the benefits of movie-going.

It actually amazes me that exhibitors are coming off as bitter stepchildren when they complain about the studios and their ever-expanding distribution platforms. A piece in MediaPost’s TV Blog has the headline that TV Everywhere threatens movie theaters. I don’t see how this can be – especially if exhibitors were focusing on what separates the movie-going experience from all others. For far too long, they have rested on their laurels as being the great big screen experience and only had to look to book the biggest films so that people would come to their location rather than a competitor’s. It’s time that they either band together or act individually to go hard-core in communicating that nothing compares to the communal experience of movie-going.

The exhibition industry has allowed the consumer electronics industry to trump them on experience.  They have sat idly by while the world started to be more comfortable about doing things on their own or in smaller groups.  There is no doubt that technology has enabled great experiences at home, but nothing compares to the communal experience of movie-going.

Broadway, and the live theater business in general, have seen huge declines over the decades as prices continue to go up.  Somehow they still sell seats as producers and theatre companies push the benefits of seeing live theatre with a large group of people. The economy is bad and we -as a society – don’t go to as many movies as we used to, but I would be more inclined to spend the money on a film where I felt I could receive benefit from the big screen and the communal experience. Though it ended up costing me $71 for three adults and two kids to see a screening of THE LORAX in 3D at Arclight for a show before noon, I was excited because nothing compares to the communal experience of movie-going.

Perhaps it was laziness that allowed exhibitors to try to squeeze more screens into smaller spaces a few decades ago.  As that happened at roughly the same time as home entertainment came into play, perhaps it just helped the attendance slide that still continues. Though many exhibitors have started to build the larger theatres back up and offer every amenity they can think of to make it feel more like home (lazy boy chairs, full food delivered to you, sofas, etc.) they are still missing the main differentiator between the home and the cinema – the fact that nothing compares to the communal experience of movie-going.

There is also an emphasis on what kind of movies are being released and how people will only see big action movies in cinemas and then wait for the smaller-scale films to come out on video or cable. There is still an invigorating experience by watching any type of film with a crowd of people – unless the film really sucks… In all cases, even with the best system at home (or on your mobile device) it just isn’t the same with a handful of people because nothing compares to the communal experience of movie-going.
A HUGE generation of people exists – perhaps a generation plus a half – who have never experienced the amazing energy of waiting in line for a sold out show with lines around the block and every seat taken.  The last time I remember that happening was the original JURASSIC PARK, but my memories of STAR WARS and others like that are burned indelibly in my brain. Even with how well AVATAR did, there were some semblances of that, but it wasn’t the same with the advent of online ticket purchases and pre-selected seats.  It was special, had full houses and, hopefully, it taught some of the younger generation that nothing compares to the communal experience of movie-going.

In the end, I think it’s just silly to thing that exhibitors feel that mobile TV and video experiences are their competition. IMAX is doing the smart thing and marketing the difference between IMAX display and regular theater screens, but that’s effectively like splitting hairs between two very similar mediums.  If exhibitors can’t even figure out a way to market their experiences against home and mobile entertainment, that’s a shame.  If they aren’t doing it from pure laziness because they have been able to rely on studios for so long, that’s just stupidity.  When reading the following quote, it just points directly to the problem:

“The studios have to make a decision,” said Greg Marcus, CEO of the country’s  sixth-largest theater chain. “Do they want a movie theater business? And if they  want it — (and) I think they do, it’s a $10 billion piece of the pie — we have to be able earn a return on our investment … we’re not cleaning up here …

“If they want to move customers from our channel to another channel, they’re  going to cause problems and at some point they’ll cause an irreparable  problem.”

“It’s getting too easy for the customer to say, ‘You know what, I’ll catch  that on video,’” he added.

It’s the exhibitors who have to make a decision. Like a kids-club who has lost the cool kid to another group of kids or a girlfriend, they’ve got to work to make themselves cool or sexy again.  It starts with making a difference in the perception.  People will continue to stream away unless you give them a reason not to and the reason that exhibitors should be shouting out and hen supporting through the actual experience they provide is that “There is nothing that compares to the magic found in communal movie-going.”

Warning! Budget Advertising May Induce Claymation Vomit

Sometimes, you come across campaigns that are so hard to believe because they are to true to their company’s core. A campaign by an Amsterdam hostel, The Hans Brinker Budget Hotel, seems more like a joke than a true marketing presence.  There’s been many fictitious campaigns that reveal in the end that the location was actually an entry point to show off the trailer.  Imagine the surprise when finding that these Hans Brinker elements are not sets or jokes, but marketing elements from management who proudly offer that their accommodations are a fine alternative to sleeping on a park bench.

The way I found it was through a YouTube campaign that offered to pay anyone who posted a video that mentions Hans Brinker Budget Hotel AND got more than a thousand views would receive 10 Euros.  The video itself seemed too lo-fi to be true.

But when you check out the YouTube page, it is legitimate.  Granted, there’s not a bunch of entries and it seems like only one video other than the challenge video has received more than 1000 views. The YT page does show their classic Brinker commercials – one of which provided my first opportunity to experience claymation vomit.  On its own, the competition is somewhat lame and you really can’t tell if it’s for real or not. 

The thing is, the management seems to be OK with that.  Its consistent with the rest of their marketing.  On the home page of their site, the proudly begin with the copy;

The Hans Brinker Budget Hotel has been proudly disappointing travellers for forty years. Boasting levels of comfort comparable to a minimum-security prison, the Hans Brinker also offers some plumbing and an intermittently open canteen serving a wide range of dishes based on runny eggs.

There’s no photos to speak of, but they have created quite a bit of content on their site to show off how bad they are:

All of these pieces make for a fun waste or diversion from mundane lives. But it is still a mystery whether this place is for real or not!  Kudos to the management and their agency who seemingly have a bunch of time to waste.  In all seriousness, the campaign seem perfectly suited for their target consumer. It is refreshing to see that they have truly embraced what they are and don’t try to sell themselves as something more. The big travel brands could possibly learn a thing or two from them.

Smart Strategy Leads To A Bigger Piece Of The Pie

You don’t have to be a huge brand to make big-time campaigns  – you just need to have a smart strategy. For a regional pizza franchise like Anthony’s Pizza and Pasta in Denver, those smarts are helping to make them seem anything but a small player in their market.  Having used a hefty amount of Out-Of-Home (OOH) placement in the past with billboards and sponsorship programs with the local NHL team, the Colorado Avalanche, they could stayed the path. They had already made a strong challenge to the larger chains with campaigns like last years’ “We’ve never had to change our recipe. Because it never sucked.” billboards – but they have taken an even bigger step with smart media planning and executions on TV (Network and Local) supported by well-managed social media and grassroots programs.

Karlene Lukovitz expands on much of the details of Anthony’s Pizza and Pasta’s local TV campaign in her MediaPost entry but the basic piece is the strategy for a relatively short flight of on-air spots across Network and Cable channels with augmenting support through their online outlets.  What was 90% spend on OOH in the past flipped to 90% television – all in the interest of making the statement for their NY Style Pizza against the national chains.

Though I can’t find any of the commercials online, it seems like their creative and media agencies (Cultivator Advertising & Design and Explore Communications) set up a targeted, high impact campaign with most of the annual budget being spent in Q4 ’11 and Q1 ’12.  The strategy of only producing 15 second spots – with nearly a dozen versions or variations for better contextual placement – is a smart one.  Regardless of their creative executions, all are consistent with the brand messaging/tagline of “authentic, New York-style pizza.”

Lukovitz’ post clarifies how the strategy is more effective in helping all franchisees and is not just a vanity play in the goals of the campaign:

Goals include introducing a fresh, compelling approach within the market, ensuring that all franchisees get equal benefit from the campaign (out-of-home tends to work best in the urban, high-traffic locations, as opposed to outlying areas), targeting two core audiences (males for single meals and moms for family meals) and of course, driving pizza sales.

There are some ways the campaign could be optimized.  Explore Communications’ representative said that they are hoping to drive numbers on Facebook, but they are not posting the Facebook call-out within the ads. They are doing a spend on Facebook to go along with the larger campaign – which is fine – but the online driver should be there with a clear url on the TV ads.  Hopefully that url is a concise one as the brand’s url is long.  If you try to Google Anthony’s Pizza and Pasta, there’s a bunch of them – which makes sense as Anthony is quite Italian…  The main site does have a Facebook call-out front-and-center with a strong incentive to Like the page for a free slice.  Additionally, I would look to place some of the spots on their site and Youtube – especially if they are funny.

What this campaign seems to prove is that you don’t have to spend considerably more to have a high-impact campaign on television – you just need to be smart about it.  Shorter flights and multiple creatives for flexibility in placement can help do the trick, but you’ve got to make sure your other marketing platforms are initiated to fill out the program entirely.  While the TV work should be good in the short-term, the planners realize that the true measure of success is that sustain and growth beyond Q1.

Research has shown that consumers want to make use of truly local retailers and restaurants IF the value is there and they know about it.  Sometimes, it’s a challenge to break through the beating drums of the national chains, but it can be done.  Anthony’s Pizza and Pasta and their local Denver agencies are looking to prove just that.

[UPDATE] I received links to the videos on YouTube and am posting to help clarify here.  They were smart to have a simple url at the end.  They should just post the spots all under the brand name instead of the agency’s name.

http://www.youtube.com/watch?v=-00HcJl-0WI&feature=youtu.be
http://www.youtube.com/watch?v=bTRrIwew71k&feature=youtu.be