Lairig Marketing

Mountain Dew Won’t Dew For Every Target Segment

Another crummy video commercial, another “sorry if we offended anyone” apology. And another miss by marketing analysts as to what should be the key take-aways from the incident.

Mountain Dew is, on the one hand, a phenomenal story re: product and marketing. High in sugar, high in caffeine, and high in weird coloring for a carbonated beverage, it nevertheless reached the #4 spot as measured by U.S. volume, trailing only Coke, Diet Coke and Pepsi.

On the other hand, Mountain Dew is – pun intended – a story of “flat.” Essentially flat volume growth for many years now, and thus flat market share.

Numerous product-line extensions have supplemented the main “Green Dew” business in this century. Some have been basic flavor/color related, such as Code Red. Others have tried to go out of category – such as AMP, and now Kickstart, into the energy-drink sector.

Through all these product changes, the Dew’s core target has continued to be hip white teens who [blank] board – fill in the blank with “snow” or “skate” or “wake” or “water” or “game” or “whatever.” There are, of course, a limited supply of such people.

So, for a couple of years now, the folks at PepsiCo have either directly or unknowingly approved of some curious marketing initiatives by Mountain Dew brand managers to grow the business outside the core target segment. No product changes per se, just adjustments to positioning and creative.

Long story short, the urban adventure for Mountain Dew has not been excellent. The culmination = the goat video spot (aptly named) that was pulled last week due to consumer blowback. We guess that the corporate marketers at PepsiCo jumped into this one, weren’t happy to, and that will probably cost a couple of Dew brand marketers their jobs.

Guessing aside, we do believe it is time for senior leadership at PepsiCo to rethink its approach to target-segment expansion for Mountain Dew. Under current course and speed, we only see more goats. Which will continue to erode the core brand.

It’s time for a new product – either a subbrand under Mountain Dew, or a new brand in its own right - to be the vehicle to reach the intended target segment.

Pepsi marketers can refer to their own case study for help on this one: AMP used to be “Mountain Dew AMP,” way back in the day. The two brands later went their separate ways, and Mountain Dew finally removed its name from AMP packaging last year.

For now, Mountain Dew’s targeting strategy is generating lots of energy, not much of it good.

DISH Network’s Mad Sprint For Relevance

Way back in the day, late in our inaugural year of 2008, as we plowed through our “How Would You Save” series, we featured this one on Sprint. At the top of our list of recommended strategies to turn around Sprint's fortunes was a marketing partnership with a meaningful hardware player.

Well, today we got one. But not the able hardware company we assumed (see Samsung). Instead Sprint received a gazillion-dollar buy-out bid from satellite pay-TV provider DISH Network, and its wingnut chairman Charlie Ergen.

We’ve recounted several times over the past few years DISH’s weird business dealings (such as here), as well as its terrible advertising (such as here).

Before today, Ergen found himself with a bunch of wireless spectrum he wasn't quite sure how to "monetize." Granted, he had plenty of thoughts on what to do with it, but deep down Ergen knows that DISH has neither the capital, knowledge, or customer-acquisition capabilities to make any idea – satellite broadband, wireless broadband, whatever – come to profitable fruition.

Compare the track record just in DISH’s core industry. Over the past five years, here is its scorecard versus larger satellite TV rival DIRECTV:

- Growth in revenues: DIRECTV at 34.2 %, DISH at 22.8 %
- Growth in revenues (CAGR basis): DIRECTV at 7.6 %, DISH at 5.3 %
- Growth in subscribers: DIRECTV at 14.0 %, DISH at 2.8 %
- Average monthly revenue per sub: DIRECTV at $ 96.98, DISH at $ 77.10
- Growth in avg rev per sub: DIRECTV at 15.6 %, DISH at 11.3 %

As for shareholders, they seem to be far better off with DIRECTV, whose stock price has increased 118.0 % from 2008 to the end of 2012. Ergen has rewarded his investors with a five-year return of a paltry 9.8 %.

Headline alarming, pay-TV hater Henry Blodget touts the potential DISH-Sprint deal as a “partnership [that] could change the telecom industry forever.”

Laughable. DISH dishes a very weak hand, for an even weaker wireless player.

The three-legged race starts now.

The Home Depot Supplies HD Supply With A Lousy Brand

Back in the early 2000s, The Home Depot (aka, “Home Depot without the The”) suffered the reign of Bob Nardelli, one of the top-ten worst CEOs of our modern business era (if not all time). One of many initiatives was the formation (through numerous acquisitions) of Home Depot Supply, a line of business targeting large commercial customers.

While it garnered billions in revenues, the B2B business proved to have zero synergy with the core retail business. Round about 2005, operational, customer service and financial performance all plummeted. Nardelli was shown the ($210 MILLION) door by 2007, and a new CEO dumped Home Depot Supply on private investors (keeping a 12.5% stake, which it then wrote off to zero value in early 2010).

What to call the spun off business? Think hard.

Really hard.

HD Supply.

This acronymic device has been one of the more popular naming conventions of the past several years. Exhibit A is/was the change of Computer Associates to “CA.” That was confusing so it was changed again to "CA, Inc."

THAT was also confusing, so it was changed, again, to CA Technologies. With the Inc.

The private investors for Home Depot Supply were either in a rush or felt that the “HD” convention would maintain some sort of brand equity from the business’s prior association with Home Depot, as well as provide some easy-to-forgive naming continuity.

After foundering through the Great Recession (which at some point, we imagine, will be renamed “GR”), the private investors now want out of HD Supply. An announcement was made just last week that a consortium of the usual crooked banks (see, recently: JP “It’s Not My Fault” Morgan) was selected to lead an initial public offering of HD Supply.

Allow us to give the banks a suggestion that could add $3 a share to the IPO target price.

Rebrand HD Supply.

The current brand is a goat rodeo. The business uses a URL of “hdsupplysolutions.” The website copy introduces the company in a navigation tab as “HD Supply Maintenance Solutions.” A header in the About Us section says “Welcome to HD Supply Facilities Maintenance.”

That’s zero for three in naming consistency.

The logo is HDSUPPLY, all in caps, no spacing, with the HD in yellow (NOT Home Depot orange), SUPPLY in black. There is a random black dot between the H and the D. Looks like the winner of a junior-high-school project.

Our suggestion is to trash it all. Start over. Management at HD Supply claims to have conducted months’ and millions of dollars’ worth of customer research. In there somewhere is a real, meaningful, compelling and differentiating brand essence dying to come out.

No one – no one – can possibly be, or get, excited about “HD Supply.”

Least of all IPO investors.

Office Po’ Max – Two Drunks Holding Each Other Up

A yawner of a merger. Two challengers in a lost industry, coming together in order to save costs. There will be a number of articles in the days ahead, no doubt, giving marketing advice to whoever draws the short straw to lead the combined Office Depot and OfficeMax.

As is often said by cops at a crime scene, “Nothing to see here, move along.”

We can’t resist, however, looking backward in this case.

The longest-tenured Lairig Marketing readers will remember how we decried the insane amount of trade press and applause given to OfficeMax’s “Elf Yourself” campaigns. Long before Facebook and Twitter (circa 2007), OfficeMax’s Senior Marketing VP, Bob Thacker, was heralded as the second coming (half true, since he had recently come out of retirement). For what?

For getting tens of millions of site visitors and “engagements” from people creating their virtual elf selfs. Big deal, we said then.

Here’s what Thacker said during the 2007 Christmas (oops, HOLIDAY) period:

"We were looking to build the brand, warm up our image. We weren't looking for sales. We are third-place players in our industry, so we are trying to differentiate ourselves through humor and humanization.”

Well, he got his wish in terms of sales. OfficeMax revenues fell every year since. And OfficeMax remained in third place.

Meanwhile runner-up Office Depot also frittered away the last five years, with sales on a straight decline year over year. About the only marketing news was its attempt at copying Best Buy’s Geek Squad, which we critiqued here way back in 2008.

Net net: Office Depot’s brand ended up being more boring than the office supplies category. Hard to believe, we know.

In less than a day, the two companies have highlighted how doomed this strategy is. (A) They managed to f&ck up the press release. (B) Office Depot’s stock finished the day down more than 15%. (C) The share price for OfficeMax was off 7%.

We feel most sorry for Kim Feil, who just this past November left Walgreen’s to become the CMO at OfficeMax (footnote to the Thacker story – he left OMX in 2011) in order to:

“…bring innovation and disruptive moves to the marketplace.”

Today, the corporate boards of Office Depot and OfficeMax just brought enough disruption to send Feil out looking for some pain relief.

She should visit a Walgreen’s. Maybe they’ll take her back.

Ed Koch – Did Just Fine

As this is a blog about marketing strategy, we try to limit our “teaching moments” from people who have passed on to truly iconic figures. People like Ted Kennedy, Steve Jobs, Harmon Killebrew, even our dear old Dad.

And people like Ed Koch. So iconic to us, at least, that we used his trademark phrase “How’m I Doin” as the headline for our ongoing 2011 series that recapped our 12 predictions for that year.

For those headlines, we added a question mark. You’ll note, however, it’s missing in the paragraph above. Because it really wasn’t a question.

Hizzoner couldn’t care less what your answer was. He didn’t give a flying f&ck how you thought he was “doin.” (Unless, of course, you thought he was doin’ great!)

From where we sit, Ed Koch’s “marketing teaching moment” is all about branding. He was the perfect blend of intellect and confidence. Which made the question “How’m I doin?” a redundant tautology.

His was a brand essence that most marketers seem to have stepped back from nowadays, schooled by “gurus” of all stripes that too much confidence is a no-no.

Their battle cry: “The consumer is in control of your brand.”

Koch would have been run out of office if he felt that way, if he worked that way, if he presented himself that way. He was wrong, many times, about the little things, but he got all the big things right. “How’m I doin” was Koch’s way of saying “I’ve got it covered, so you should keep following my lead.” And lead he did, confidently.

The brands who are perennial market winners lead with confidence. Apple, Disney, GE…they don’t need to ask “How Are We Doing?” Each is in control of its brand.

Ironically, many of the “winners” in the “top brands” faux analyses like Coca-Cola and Pepsi – gargantuan businesses – spend so much time, every day, looking over their shoulders, wondering, unconfidently, “Are We Doing OK? You Still Like Us, Don’t You?” Each one believes that the “consumer is in control.”

If Apple or Disney went away, you’d miss them. If Coke went away, you’d drink Pepsi instead.

Mayor Ed Koch was even in control of history. He, and his intelligent confidence, will be missed…forever.

American Airlines: We Know Why You Changed The Logo

As we’ve said many times, logos and taglines are so incidental to the true value of a brand, but receive disproportionate focus due to their “in your face” nature. There is no better example than the airline industry, which has churned brand identities in recent years like so much butter.

Yet the brand experience – i.e., FLYING – continues to blow like Sandy.

In the past couple of weeks, we watched the anti-intellectual reaction to the first new paint job in 40-odd years for the bankrupt but Q4-profitable American Airlines. Very few mentioned the following…

The Tail of the Tale
Remember when United and Continental merged a couple of years ago? Continental’s logo took over the tail. Now, compare American's new “flag” tail to a US Airways plane.

Any day now, US Airways and American will announce a merger. This might be the first time ever that the liveries were ready long before the merged operations were.

Where’s Your Tagline?
Some of the coverage of American’s new paint job noted the absence of a new ad campaign and, yes, a new tagline. In 2012, American put on hiatus its “We Know Why You Fly” slogan (in case you didn’t catch the reference in the headline of our post) for some features-based “Be Yourself” campaigns (touting onboard WiFi).

We imagine the branding guys have been told to cease and desist on any further tagline efforts until the merger with US Airways is done. Perhaps we’ll get an interim slogan that goes to the “Your” well: “Your Travel. Your Airline.”

Or American could resurrect its post-TWA merger tagline: “Two great airlines, one great future.” No one would remember that. Again.

Who Gets Its Ad Campaign Off the Runway First?
Months later, we’ll also see some interim TV spots (best of both worlds theme, blah blah blah). US American Airlines (talk about a merger of redundant names) will beat United Continental to TV, which will be ironic.

We told you in May of 2011 here how much hard work it would take United’s new ad agency to create a brand campaign, but fully expected to see a new tagline and TV spot at least by the Fall of 2012 - a full two years after the merger with Continental.

There was no sign of either.

Just this past Friday, the bow-tied Lewis Lazare of the Chicago Business Journal wrote:
“…as it works to restore the trust of current and former customers, United apparently will do so without the help of any major new advertising initiative from its ad agency of record McGarryBowen/New York.

Sources at United said top executives at the airline believe it is important to be certain the airline is delivering a consistently great product before launching any ad campaign…”

Which means we might never see United’s new ad campaign.

National Hockey League Brand Taken Off Suicide Watch

The NHL lockout is all but officially over. Management and labor have come back down from the ledge. Yet, reading The New York Times this morning, you would think they jumped to their deaths.

“Fans might not be ready to move forward just yet — there is certain to be lingering anger…” declared Jeff Z. (Zamboni?) Klein, the author of a stream of gibberish that somehow qualified to have the word “Analysis” placed in the headline.

Of course there is anger, you twat. Hockey fans don’t really have a substitute. When the season ends in late (late late) Spring, they count the days until the following October, for another round of eighty-plus games and seven months of bliss.

The lockout came within days of taking every minute of that away this year. Thankfully, fans will get their hockey Jones, 50 games or so.

But Klein sees only downside:

“Kraft Foods walked away from a lucrative N.H.L. sponsorship in Canada.” Sounds like a smart decision. And now Kraft can walk right back in. It would be stupid not to.

“Molson Coors is seeking reparations for lost business.” Um, yeah. Wouldn’t you? P.S. Wanna bet Molson puts its “lingering anger” aside to sell beer in hockey arenas starting round about January 19?

“A Facebook page started by an angry Los Angeles fan calling for a 10-game boycott on N.H.L. tickets and merchandise…generated more than 21,000 likes.” Who contributed that meaningless evidence, Stuart Elliott ??!!??

There will be more junk like this over the next few days (How Much Was The NHL Brand Damaged? Can The NHL Brand Survive? blah blah blah). Ignore it all.

Instead, read the comments section on ESPN.com’s hockey articles. It hits the magic 5000+ number every time. Die-hard fans, all.

Instead, look at the historical attendance data. Up 2% last year, 3% above two years ago. Not bad for an industry at 95% sell-thru, during a shite economy.

Ironically, watch the Times’s Klein skate right past his own mention of this significant data point: “The N.H.L. generated a league-record $3.3 billion in revenue last season…”

In short, if any “fan” wants to stay away this season, he or she won’t be missed.

That the NHL brand will survive a near-suicide shows just how strong it is.

Finally, Klein includes the requisite marketing “guru” in his piece: “From the research I saw and what I heard anecdotally, a lot of fans and sponsors may not re-engage this season.” What research? Anecdotes? A “lot of” fans? "May" not? Really? How many? Really?!?

This asshat continues: “The league is going to have to slowly win back their [the fans] hearts and minds.”

It took 113 days, but the league got all the hearts and minds back at once. The standing ovations at every rink just before the first face-off will confirm that the NHL brand is doing just fine.

Marketing’s Four Questions For 2013 – Part 3

Now that you have decided to leave your media mix “as is” for next year AND invest in some rigorous customer research, let’s move on to the next big marketing question for 2013. The answer to which, unlike that of question #2, is going to be a lot of fun for you.

The Third Marketing Question For 2013 goes like this:

Are we going to create an absolute sh&t load of video content about our business in 2013, or what?

We’re feeling generous for the third time in a row, so once again we’ll give you the answer:

Yes.

That is the only correct answer, because you just can’t say no to these “subquestions”:

>>> Does the time spent by consumers watching video outpace consumption of all other types of media combined? More time than some people spend sleeping?

>>> Is video content easily digitized and uploadable to our own website, YouTube, Facebook, et al.? “Self” viral?

>>> Are we now finally convinced that every other way we have tried to express our brand personality and authenticity, including asking customers to make videos, is bollocks?

>>> Would we rather spend a few hours making a dozen 90-second videos about how to use our products or services versus spending three months in an endless series of rewrites just to put together a stupid newsletter jammed full of watered-down slop that no one reads?

The answer to the Third Marketing Question of 2013 – why aren’t we making video content left and right? – is easy. We have been intimidated and afraid. But now we are not.

We have seen the light.

Gilda Radner Is Told To “Never Mind”

An interesting branding story comes to us courtesy of a clumsy set of events related to Gilda’s Club, a unique community-based cancer support group, with locations across the U.S. and Canada. The actor Gene Wilder founded the idea, naming it in memory of his wife Gilda Radner, who died from cancer in 1989.

Through unscientific polling, the Gilda’s Club in Madison, Wisconsin determined that the name “Gilda” no longer meant anything to anyone born after 1990. This sort of conclusion would fly in the face of some other equally unscientific observations:

• Saturday Night Live continues to air, live and in reruns, to this day.
• Millenials spend 27 hours a day surfing YouTube, Netflix and Hulu with their smartphones, no doubt catching a few classic SNL bits among the dog-on-skateboard videos.
• Some Millenials have set foot inside a Gilda’s Club somewhere, in support of their own family members battling cancer.

Never mind, said the former Gilda’s Club of Madison. In order to be more relevant, it shall now be branded “Cancer Support Community Southwest Wisconsin.”

You can imagine the reaction, and you can read about it all over the blogosphere.

To us, this sordid story has some odd turns when viewed through the lens of branding.

It turns out that a few other Gilda’s Clubs have taken a similar step. Blame it on a 2009 merger. The mash-up of Gilda’s Club and The Wellness Community took on the new sexy name of “Cancer Support Community.” Nothing will kill a great brand like a merger of “equals.”

Individual chapters were then set free to pick the name they wanted, and with more than half already using the bland “Cancer Support Community” moniker, it was just a matter of time before former Gilda Club’s would begin to abandon Wilder’s beautiful gesture.

As well as abandon Radner’s memory.

The only way to stop this ugly trend is for someone to step in, unmerge the “real” Gilda’s Clubs, and give the organization a fresh start. It would be a fitting way to emphasize the “always” in “It’s Always Something.”

Meanwhile, we wonder what will happen when Millenials in Wisconsin’s capital city finally catch on to the fact that their dear capital city of Madison is named after our fourth President.

James Madison died in 1836. He never even had a chance to upload a YouTube video.

Unwatering The Solution

If we dare point out one of the few light moments from the utter devastation of the past few days, among the most memorable was New York Governor Andrew Cuomo declaring his wish for Christmas – “a dewatering specialist.”

[Runner-up goes to New Jersey Governor Chris Christie who, when asked if he knew what people were saying about his budding bromance with President Obama, said “I’m not in a coma.”]

Governor Cuomo was referring at the time to the imminent arrival of four people (hydrologists and mechanical engineers) to the flooded portions of lower Manhattan, experts at getting water out of places it’s not supposed to be. The proper term is “unwatering,” but either way, Cuomo's use of "dewatering" most certainly caused any listener or reader to cock his head and say, “huh?”

And it should have given special pause to branding and product-naming practitioners everywhere.

Because, for a host of reasons, the services that companies provide and what they brand themselves have tended to move away from what they do and toward what the benefits are they deliver. For example:

- Instead of “garbage hauler,” we have the field of “waste management solutions” (and, indeed, a company named Waste Management Solutions).

- “Barber” becomes “hair styling solutions.”

- “Night watchman” becomes “security solutions.”

- “Auto repair” becomes “vehicle maintenance systems.”

- “Smartphone repair” becomes “communications systems AND solutions.”

The more syllables, the better…apparently. The more you can make yourself appear to provide a breadth of services – even if you don’t – the better your chances…apparently. And if you tag the word “systems” or “solutions” (or both !!!) at the end, the more advanced you will appear…apparently.

Following that logic, the unwatering specialists would be better off…apparently…if they were named:

• “Flood Water Solutions.”


• “Water Removal Management.”


• “High & Dry Systems.”

If you have a specialty, there is no reason to be embarrassed by it. The world can always use a few more “unsolutioning” experts.