Nuggets of insight on brand and business growth
http://wheresthesausage.typepad.com/ - May 20, 2013 11:30:53 AM - Dec 4, 2004 5:53:42 AM
Regular readers will know I've been a bit of a social media sceptic, especially in terms of the role it can play for most fast moving consumer goods (FMCG) brands. One of my major issues has been the indirect effect on FMCG sales of social media, in contrast to online brands who can more easily drive online sales.
Well, could a new technology called "Slingshot" start to address this problem?
Slingshot is a snazzy service that allows you to link it to the online shopping basket of your preferred retailers, such as Tesco.com or Ocado. Then, when you see a Slingshot button on a brand's webpage you click, and hey presto, the item is in your shopping basket.
See below for an example for Stella Artois Cidre. Brand owner InBev claims sales "rocketed" after adding the Slingshot functionality to their facebook page. They say the conversion rate was double what it got from an Amazon page (c. 3-5%).
Now, we shouldn't get too carried away here, as only c.5% of grocery shopping is done online in the UK according to reports . And the UK is one of the more developed markets. However, Slingshot could at least be a first step towards social media actually helping SMS (sell more stuff). And some experts forecast that by 2020 online could be 10-12% of the grocery shopping market.
I'm going to have a go with my shopping.
And I'd love to hear from any brands who have tried Slingshot out.
May 15, 2013 Comments (0)
Consumer creativity contests are all the rage these days. One that caught my eye was Heineken's global competition to design a new bottle in their "Remix our Future" contest. This made me smile, as it reminded me of the "Pizzart" contest (UK readers should get the joke) to design a sausage pizza box for the fictional Simpton's brand in my Where's the Sausage book
But how many entries do you think Heineken got?
The brand has 13,000,000 Facebook Likes.
What do you reckon?
The answer is 1,700.
This is a participation rate of 0.001%
And what about getting people to look at the designs and vote?
The winning design had 147 views.Which is also 0.001%.
And check out that winning design above. Is it just me, or is that pretty ugly?
Here are my take-outs from this story:
1. Most of us want to consume content, not create it
Give me a break. You're the brand. I want you to be creative, not ask me to do the hard work.
If you do go this route, make it easy for people to join in.
2. Lower your expectations
If you do go down the route of asking people to be creative in a contest, lower your expectations. Heineken is a global brand with a big social media presence. And they got 170 entries.
3. Make it worth my while
If after all this you still decide to go down the creative contest route, at least make it worth while joining in. I posted on Lays/Walkers "Do us a Flavour" contest. Not only was this easy to enter, the prize was a whopper: £500,000 AND 1% of sales of the new flavour.
The only prize for the Heineken bottle winner I can see is that your design is exhibited in a design exhibition, and then launched.
4. Be careful on creative control
Be careful about what you leave open to consumer creativity. I'm not sure the design of your global pack design is one I'd use this approach on.
In conclusion, the Heineken bottle contest showed that 99.999% of people who bother to Like the brand's Facebook page were not interested in joining in. A brand's job is to be creative for consumers, and not to delegate this job to them.
May 13, 2013
My favourite email of the year so far was the one inviting me to speak about growing the core at this year's Brand Manage Camp in Las Vegas, on 16th and 17th September. I know, its a tough job eh? I'll be sharing insights, tips and tricks inspired by the Grow the Core book.
This is one of the USA's leading branding conferences, with two days worth of speakers, covering everything from creativity, to "contagious ideas" and innovation. So I'm chuffed to bits to have been invited to speak.
The full agenda for the event is here. And if you click below you can watch a little movie with more about my talk.
So, see you in Vegas!
May 08, 2013
1. Upgrading the core
The new foil fresh packs upgrade the current crispbread products, by keeping them crispy for longer. This means Ryvita is making what is strong even stronger, rather than trying to grow by adding new products or pack formats.
2. Functional packaging
The new foil fresh packs are delivering a benefit that is relevant to consumer needs. I remember from working on Ryvita that a reason for not buying it was concerns over the crispbreads losing their crunch.
3. Distinctiveness vs. own label
This upgrade is a little step to help Ryvita be distinctive versus own label copy cats. No doubt the copying will happen again, as own label tries to match the brand leader. But for now Ryvita has a window of time when it has a little edge to support the price premium.
4. Simple, effective descriptor
"Foil fresh" is a nice name to use for these new packs. It combines the what ("foil") with the benefit ("fresh"). And the with only 2 syllables, the name is easy to use and remember.
5. Build on other grow the core activity
This pack upgrade is the latest in a series of grow the core initiatives aimed at keeping Ryvita fresher and crunchier for longer, so it tastes great. The brand has already introduced nice tins for your kitchen, and little bags to take your Ryvita to work for lunch.
May 07, 2013
Key to Burberry's doubling of revenue and profit in the last five years has been re-focusing on the iconic, core trenchcoat, according to this HBR interview with CEO Angela Ahrendts. Thanks to Ian Norman of Nexus/H for the tip-off.
When Ahrendts took over as CEO in 2006, the company was growing at only 2% a year. She quickly concluded that Burberry had stretched too far from the core: "It had lost its focus in the process of global expansion. We had 23 licensees around the world. We were selling dog cover-ups and leashes... a whole section of kilts. Together they added up to just a lot of stuff—something for everybody, but not much of it exclusive or compelling."
Here are some of the key insights from her story of transforming Burberry bang in line with the sub-title of the new Grow the Core book: "How to focus on your core business for brand success"
1. Remember what made your famous
Ahrendts did what we always do on projects: she looked back to see what made the brand famous in the first place:
"For more than a century the Burberry trench coat was cool. But when I became CEO, outerwear represented only about 20% of our business. Fashion apparel and check accessories were leading our strategy.
It’s not unusual for a luxury company to be born from a single product and then diversify. Louis Vuitton began with luggage, and Gucci with leather goods. But each continued to earn the majority of its revenue from its original core products. Burberry wasn’t capitalizing on its historical core. We weren’t proud of it. We weren’t innovating around it.
2. Re-focus on the core
Re-focusing on the core was key to the growth strategy, as Ahrendts comments: "We would reinforce our heritage by emphasizing and growing our core luxury products, innovating them and keeping them at the heart of everything we did."
It is interesting to read that this strategy was met with some resistance inside the company: "I have to admit that some managers were cynical. A lot of them had been at Burberry for a really long time. I’m sure they left saying, 'Focusing on trench coats—that’s our strategy?' " Re-focusing on the core isn't as sexy as brand stretching, and can even seem basic and boring. But it can be highly effective if done well.
3. Refresh the coreThe key to growing the core is to re-focus creativity and innovation on it. This can be through upgrading the products you have already, but also extending the core range, as Burberry did: "Burberry used to have just a few basic styles of trench coats: Almost all were beige with the signature check lining, and the differences between them were minor. Now we have more than 300 SKUs, including the classic Burberry trench in a range of vibrant colors and styles, with everything from mink collars to studded leather sleeves."Furthermore, the iconic trench coat was reinstated as the product essence of the whole brand, in the same way that the boot is the essence of the Timberland brand: "Christopher and the designers and marketers all started dreaming up ways to reinforce the idea that everything we did—from our runway shows to our stores—should start with the ethos of the trench."
Stronger creative leadership was key to re-focus on the core. Back in 2006 there were separate design teams in Hong Kong and the USA. Ahredts could have tried to engage and align these teams to get them on board. Instead, she was much bolder. She closed down these teams and centralised creative leadership in London under Christopher Bailey, acting as a "brand czar.” Ahrendts comments that: “Anything that the consumer sees—anywhere in the world—will go through his office. No exceptions.”
The same centralisation of creativity, with uncompromising brand standards, has also been key to success at Gucci with Tom Ford, and Apple with Steve Jobs.
Re-focusing on the core required a lot of effort internally to align the sales teams' efforts, and help them to sell the higher priced trench coats rather than "easier" sales of cheaper items like polo shirts: "We created videos to demonstrate Burberry craftsmanship. We equipped our sales associates with iPads. We knew that beautiful, compelling content would connect customers to the brand and our iconic trench."
6. Product passion starts within
My favourite bit of this brilliant story concerns the wearing of trench coats by leaders inside the business. When Ahrendts arrived she was shocked by what she saw as top managers arrived at her first strategic planning meeting: "They'd flown in to classic British weather, gray and damp, but not one was wearing a Burberry trench coat. If our top people weren’t buying our products, how could we expect customers to pay full price for them?"
Contrast this with how the CEO describes the company today: "If you ask a Burberry senior executive how many trench coats he or she owns, the answer is likely to be eight or nine. As for me, I can safely confess to owning a dozen. They’re not just raincoats anymore. They are the foundation of a great brand and a great company."
In conclusion, this has to be one of the best examples of how to re-focus on the core business for brand success. As Ahrendts beautifully sums up, "Today it’s taken for granted that the trench coat must remain our most exciting, most iconic product. It guides all our decisions. Our sales associates understand it. This product is who we are."
April 30, 2013 Comments (0)
A new format of innocent smoothies I snapped whilst shopping got me thinking about the role of core brand extension. The bottle is slightly smaller than normal, and sold at a lower price point. This allows it to be included in "Meal Deal" promotions, where you can buy a sandwich, snack and drink for £3.
A new format of innocent smoothies I snapped whilst shopping go me thinking about the role of core brand extension. The bottle is slightly smaller than normal, and sold at a lower price point. This allows it to be included in "Meal Deal" promotions, where you can buy a sandwich, snack and drink for £3.
Up to now, I've seen two main reasons for extending your core, through formats or product versions, as I posted on in an extract from the new Grow the Core book. First, they can drive penetration by widening the brand’s appeal to more people, on more occasions. Second, they can deliver ‘premiumisation’, by charging a higher price for new benefits, driving not only volume share but also value share.
But the new innocent bottle shows an extra possible benefit of core extension, which is driving distribution. It's "distribution-led" brand extension, if you like. Here's a few advantages of this approach.
1. Drive penetration
innocent's new meal deal pack increases shelf presence by securing an extra couple of facings on shelf, in addition to the normal sized pack. By increasing shelf presence, and being part of a meal deal promotion, this should help innocent drive penetration.
2. Solving a consumer problem
The new format solves a consumer problem, by increasing the choice of drinks to have with your meal deal. An innocent smoothie is a healthier option than a soft drink, but until now was too expensive.
3. Solving a retailer problem
The new innocent format also helps the retailer in question, Sainsbury's, by making their meal deal promotion healthier. One of Sainsbury's commitments is to make shopping baskets healthier, and this little innocent bottle is a little step in the right direction. The innocent team have been smart by also doing shelf-ready packaging that flags up the meal deal format.
4. Growing the core
I posted last week on how core extension can distract attention from the core, in a story about Carr's water biscuits taking shelf-space from the original version to offer new flavours. The nice thing here is that innocent's meal deal pack is a new format of their "anchor" strawberry and banana smoothie.
In conclusion, the next time you work on extending your core range, perhaps think about how to use this to drive distribution not just add variety.
As I posted on here, in an extract from the
There are many reasons to extend your core range of products with new flavours or formats. I posted on this in some detail eariler in the year, based on insights from the new Grow the Core book.
Core range extension offers new versions of the core product or service, such as Dove bar introducing a Refreshing Green version. This is very different from brand stretch, where you move beyond the core into totally new markets, such as Dove launching deodorants.
Range extension can be a great way of growing the core. It can drive penetration by widening the brand’s appeal to more people on more occasions. But it can also deliver an additional business benefit for the core in the form of ‘premiumisation’: charging a higher price for new benefits. This drives not only volume share but also value share. As long as the new product features are genuinely adding value to the consumer, the premium price should at least recoup the extra cost of the product to maintain percentage profitability. In the best cases, the core range extension actually delivers significantly more profit per unit sold.
A great example of this ‘double whammy’ of penetration and premiumisation is Gillette. The brand has been unrelenting in its drive to develop better and better razor systems. So, we have gone from Sensor (two blades) to Mach 3 (three blades) and now Fusion (five blades). Each of these is priced at a premium, supported by superior benefits. The growth in the UK core shaving business over this time was impressive, with the razor and blade business up from £128 million in 2002 to £180 million in 2006, with value share up from 60.1% to 67.9%;
Pack extension – WD-40
Extending through packaging formats is a great way of growing the core. You sell more of the same core product, rather than adding new products. A great example is WD-40, the multi-purpose lubricant which stops squeaks and unlocks stuck bolts, amongst its many uses. WD-40 used to come with a little straw taped on the side, to help direct the spray. The problem was that people would often lose the straw. This led to the creation of ‘Smart Straw’, a new WD-40 pack with an integrated straw that flips up to use and back down to store. Smart Straw solves a real problem and makes the product easier to use. And as it offers consumers real added value it supports a premium vs. the normal can.
After having done all you can to sell more of your existing product offer, the last step is to consider adding new products. Here, there is a need to focus on those products that genuinely offer potential to drive penetration by widening the brand’s user base. A good example is the Ryvita's ‘seeded’ crispbreads. These have played a role in re-positioning the brand from being a diet product to a tasty, crunchy and healthy product. The core extensions deliver a more interesting and tasty eating experience, whilst also offering extra health benefits. These extra benefits are worth paying more for, supporting a 60% price premium versus standard.
In conclusion, core range extension can be a great way of growing the core, providing your new formats and products add real consumer value that supports a price premium, delivering the double whammy of penetration and profitablity.
April 25, 2013 Comments (0)