Tag Archives: marketing

Where Does This Via Lead?

Starbucks has what it believes is a better idea – premium instant coffee. This is hardly a new category, but instant coffee or most “instant” products have been more often positioned in terms of cost, convenience or other attributes. For example, the first commercially significant decaffeinated coffees were instant. Although there have been innovations such as freeze drying, which were claimed to improve the taste, instant coffees have been presented as trade-offs in which the consumer gives up a noticeable degree of taste.

Via, the brand name Starbucks has chosen for its premium priced powder, takes a different and somewhat risky approach. Namely that Via tastes like Starbucks’ brewed coffee.

The launch of the product has been interesting. It’s been supported by print, web, social media, event, and TV such as the spot below.

So far I can discover, Starbucks has not tried the more conventional package goods approach of coupons and sampling either by mail or newspaper inserts or at the types of outlets where Via will sell. Instead, they invited consumers into their retail cafes  for a blind taste test of Via vs. their conventional brew.

Both the on-line media and the in shop events are more involving than traditional product sampling. Introducing Via in a coffee shop, attempts to transfer the positive ambiance of the cafe and to the smell of coffee to initial experience. They hope to transform this into demand at non-conventional channels such as camping supply and sporting goods stores as well as their current retail and online channels.

So what’s wrong with this brew? How many will pay $0.83 for a Short coffee or $1.66 for a Grande with none of the Starbucks ambiance? IMHO, the taste of Via wasn’t substantially worse or better than what Starbucks serves in its shops. But that’s largely beside the point.

Coffee is not really Starbucks’ business, though that is what they sell, any more than watches are the real business of Rolex.

Starbucks’ real business is the experience of a welcoming place to go. There you can socialize, work, have a job interview or a business meeting. Hence the comfortable chairs, tables big enough to work on, quite background music, long hours, and often more amenable service than you generally find at a fast food outlet or donut shop. None of these are instant coffee occasions, so they should not be retrofitted into the flagship brand as a brand extension.

Business Week reports has high hopes for Via. I’ll be happy to debate that over a real cup of coffee.

Unbound Marketing

I recently attended one of those ubiquitous presentations on Internet marketing. This one, hosted by marketing agency HubSpot was on “inbound marketing.” It was one of those real world imitations of a webinar, except they give you sandwiches.

The argument was familiar. The presenter proclaimed that he used double email spam filters, caller ID, the Do Not Call Registry, listened to an iPod rather than radio, had removed himself from mailing lists, and watched TV via Tivo so he could skip the ads. As such, he asserted that marketers can’t reach him (and by implication can’t reach most other customers) through advertising via these “outbound” media. Therefore the alternative – “inbound” marketing – is the way to go. Specifically, Hubspot recommends a marketing mix including their proprietary SEO/SEM service while curtailing what they call “outbound marketing.” Outbound includes such mundane media as broadcast, cable, direct mail, print, and display advertising.

Certainly these are tough times for media and their customers, the advertisers. TNS media estimates that total ad spending declined 14% in the first Quarter of 2009 vs. 2008. Not all media revenue declined at the same rate. For example, network TV was down 4.2%, local newspaper down 14.3%, while ads in national magazines declined 20.6%. Even Internet advertising declined 5% after five years of steady growth, as the chart from the Internet Advertising Bureau shows. As in the past recession, advertising will probably increase as the economy recovers.

iab1

Do these declines validate the inbound model? Neither they nor evidence presented by Hubspot get us there. Advertising is not static and it’s becoming ever harder to filter and avoid. Use a DVR, digital video recorder, such as a Tivo to skip ads and the shows have product placements. Get TV programming through web sites, such as hulu, and ads, which can’t be skipped, are embedded. Use social networks like Facebook and MySpace, and ads have crept in.  Listen to podcasts or internet radio like Pandora or Sticher – you guessed it – ads.

The media landscape is changing. Advertising is evolving too, but it’s not going away.

You Talking To Me?

The hundreds of millions of computer users who visit websites every day do so through a web browser. Since the first publicly released browser, Mosaic, in 1991, there have been a few contenders and many also-rans. Browsers have improved and certainly gotten more features.

The current market leader is still Microsoft’s Internet Explorer, but it has been losing share to its chief rival Firefox. These days all browsers are free for the downloading, but do we need another one? How often have you awoken in the middle of the night, worried that your browser may be suboptimal?

Google seems to think so and last year launched its Chrome browser.

Google’s marketing support for Chrome has consisted primarily of quirky short videos on a channel of its popular YouTube portal. Google has extended its advertising to independent properties such as LinkedIn and plans to run ads on TV (via its own AdWords system of course).

These ads, which can resemble mini film festivals, finesse the venerable debate about features versus benefits by ignoring both. This is a campaign targeting early adapters. The message is neither emotional nor rational but, simply tries to associate coolness with the product. These short bursts of creativity evoke the feeling of an independent film competition. If viewers already understand and care about browser issues they may get it; if not it’s interesting eye candy. This if fine if appealing to a niche, but browsers are mass market products.

browsershares

To date, Chrome remains a footnote. According to data compiled by Statcounter Chrome has a market share of about 1.5%. Like many Google products, it may be forever in Beta (never formally released). The game is still early and there is no shortage of budding filmmakers with edgy ideas.

Advances in computer browsers may be secondary to the main browser war – on the phone – where most of the world will be getting its Internet. Google also has an offering here – the Android browser.

Android’s YouTube promotion is classic technology messaging – watch my benefits or sometimes features or sometimes the engineers who develop Android. Nothing artsy here. This is a market strategically important to Google.

Do you need a new computer browser? Tough to tell based on Google’s marketing, but you might find Chrome’s half minute spot diverting.

Running on Water or Just All Wet?

pumaRace

Sports shoe and apparel maker Puma has been making footware since 1924. Olympic champions from Jesse Owens in 1936 to Usain Bolt in 2008 have worn its running shoes while setting world records. Yet in the race for market share, it barely wins the bronze in shoes and finishes without a medal in apparel.

What to do when competing in a crowded category during a worldwide recession? I could have imagined many initiatives from channel development to grass roots social networking to a basketball connection with a prominent amateur (think 1600 Pennsylvania Ave.).

How about joining with a number of mostly money losing companies such as Volvo in a round the world sailing competition. Apparently golf tournaments are not elitist enough. And the image portrayed in much of Puma’s communication is closer to urban street kid.

In each port its racing yacht visits, it will assemble a modular performance space/nightclub/bar with built in gear store called Puma City. Puma City even has its own Facebook page. At a recent reception there, everyone seemed to be having a good time. Yet no one seemed to be patronizing the store.

Puma does make deck shoes and foul weather jackets, but their sales contribute negligibly to overall revenue. The race has eleven ports of call, only one of which is in North America, namely Boston. It’s tough to see how this will develop the market.

The race is being supported by mixed media ranging from subway placards and traditional PR in Boston to a suite of social media including YouTube, Facebook, Twitter, and Blogs. So far, it seems not to have a lot of traction or the internal logic of Puma’s running events and sports clinics.

Is this yet another case of let’s spend the stockholders’ money on what someone in management thinks might be fun or has a suppressed desire to try? Did someone in corporate marketing read Two Years Before The Mast? Anyway, who needs ROI, when you’ve built the meanest looking racing yacht of the bunch?

Marley Brew


First Music News reported that the estate of reggae singer and song writer Bob Marley may license his name and image to a range of products including snowboards, hotels, coffee, headphones, and beer. This is in part a defensive strategy to capture revenue from unlicensed use of his name or image, but is this good marketing?

Marley’s music remains popular 28 years after his death. A visit to the iTune store, shows that 16 of his tunes have a popularity rating of 7 bars or more. Start searching on iTunes, YouTube, or even Google for “bob” and “bob marley” is the first suggestion. His YouTube videos such as Buffalo Soldier and No Woman No Cry have been viewed millions of times. This is brand equity.

Marley and the Marley brand are known for music and associated with Rastafarianism, Jamaica, and cannabis. He has no relation with any of the product categories he may be endorsing from the grave. Just as, say, Tiger Woods has no logical relation to the cars, watches, and consulting firms he endorses. Marley Beer looks like an extreme case of brand extension and brand extensions are often a bad idea.

There could be McDonalds headphones, Ford coffee, Apple snowboards, etc. There aren’t. These, and most other companies are very cautious about what their brands mean and what businesses they compete in. If Procter & Gamble had a new way to clean something, it would very likely launch this as a distinct brand rather than as an extension of an existing brand. Similarly, Coca Cola is in the juice and water businesses, but not under the Coca Cola brand.

Most brand extensions disappoint. They risk diluting the position of the core brand and the extensions seldom thrive. Even multi-business wizard Richard Branson has had indifferent success with his derivative brands such as Virgin Mobile and Virgin Money.

Conventional marketing wisdom is not always right. Unlike classic brand extension, no investment or market risk would be born by Marley. The brewer or snowboard maker affixes a new label to an existing product and assumes what business risk there is. None of the proposed brand extensions appears to clash with the Marley brand as perhaps a Marley breakfast cereal or motor oil might.

I’d recommend they do a deal if they have credible licensees. Excuse me, I have to don my IBM athletic shoes and get the gym.