Tag Archives: strategy

Drinking Up some GROWTH

Drink Up another example how marketing behemoths (especially FMCG players), grow by monitoring closely who is growing, then candidly and honestly gauging whether it’s wiser to Build a copycat (Coke launching PowerAde to combat Pepsi’s Gatorade) or to Buy (Dr Pepper-Keurig buys CORE)  

https://csnews.com/keurig-dr-pepper-acquire-enhanced-beverage-company

For DrPepper, adding CORE beverages boosts strength in ‘USDA-certified’ organic water, and ‘nutrient-enhanced’ water– err sorry, ‘Hydration vehicles’. Scoff if you will, but fruity water, organic water & certified water is hot; and accounts for a growing share of occasions for beverage drinkers. This buyout adds incremental consumers, consumption occasions & channel credibility (particularly with health shops, organic grocers, restaurants & cafeterias offering ‘organic’ fare,  fitness/bodybuilding shops or gyms).

DrPepper already has a huge stable of ‘any occasion’ sports/ activity/ energy/ rehydrating beverage brands that would give a marketer a week’s worth of drawing classes on Positioning Maps (Snapple, Keurig, Motts, Venom, Bai,…and now CORE)

CORE’s channel credibility & Influencer cred may boost Influencer support for ‘the rest of DrPepper’s stable’; this is critical. Arch rival Coke has PowerAde, Dasani and (now) BodyArmor;  Pepsi has Mountain Dew, Lifewtr and Gatorade (imo presence in ‘high-cred’ Influencer-rich outlets keeps the Pepsi group ahead of Coke’s  line, in terms of having a reputation for being more viably ‘athlete-credible’ or ‘health-credible’ but the purchase of BodyArmor def help out Coke!).

The CORE acquisition certainly raises the efficiency of each DrPepper sales call, however imo something more exciting is that DrPepper gains credible beverage brands that might be expanded into solid foods- eg protein supplements, protein snack bars, meal replacements (these are huge, active markets -imo with exciting futures given Gen Y/ Gen Z tendency to eat & snack on the run &/or possibly as vehicles to pursue opportunities in medical/ serious nutrition counselling markets, or even with Seniors).

Steven

 

TrumpTradeTirade means a $ is no longer a $…

This month/week/day/minute in #Tariffs– a subject historically characterized by rational thought, measured policy, business + govt in harmony (if biased by corporate lobbyists, union & farm groups etc); the #TrumpEffect = replace that w threats, false facts, seat-of-your pants “Policy”.

Implication: Businesses must learn to predict the unpredictable, rationally deal w the irrational. Dollar stores’ options are limited by their name/ positioning. Your cost structure is no longer your own- and the P (‘Political’) in PESTL-C external factors (those a business does NOT control) has taken on huge impact.

Tariffs, quotas, trade restrictions, sanctions, embargos have long been a government tool to protect public safety (non Tata Nano’s here pls, nor Chinese pet food laced w plastics or children’s toys made w toxins,…), ecological protection ( a bit late in the case of for Emerald Ash, Zebra Mussels, etc ) national security**, domestic manufacturing & farming.

The lines between those ‘legit’ reasons for trade barriers can be fuzzy; Canada’s Massey Commission started protecting Canada’s broadcast content to build national unity/ bonds, yet ended up being a de-facto trade barrier stalling a cultural invasion long enough to nurture what became a globally competitive Canadian Content (ie CanCon) industry in comedy, stage entertainment, music, …

To use the ‘national security’ trump  card & slam your #1 trading partner with seat-of-your-pants tariffs on Aluminum & Steel for passenger automobiles – in an industry already thoroughly integrated continent-wide, is not only a betrayal of the spirit of NAFTA, it’s harmful to a North American auto sector that must compete against autos from Germany, Japan, Brazil,  Korea.

Mr Orange has a more viable argument against Canada’s dairy industry; an effective lobbying group has stalled a tide of cheap US dairy imports, securing for Canadian dairy farmers more stable incomes than earned by sibling pork / beef producers. US milk producers need not meet our less well known ‘behind the curtain’ standards of practise for milk, making ours safer & more nutritious. wrt a ‘Public Safety’ argument, should a nation protect …..Mothers Milk? imo yes, you might argue that ‘s pretty fundamental.

On this side of the border: If you were the Dollarama #retail chain, what would you do? You might assume most of their store goods come from India or China, but many are shipped from the USA.

http://business.financialpost.com/news/retail-marketing/dollaramas-first-quarter-profit-rises-7-3-to-101-6-million-on-higher-sales

What if you’re Gildan, Roots, Canada Goose? Will your textile items next get the tariff attention of Mr Orange? Canadian labour costs may be higher than those of the USA – and Higher Cost of Goods nations are rarely see new tariffs by an importing nation – but we’re in uncharted waters. There is no rational reason for what Mr Orange is doing to global trade and diplomatic relations.

Also at risk: infrastructure contract bidders: Bombardier (transit cars), Aecon, SNC Lavalin,… Boeing-bought American politicians got POTUS to whack Bombardier with a ludicrous 292% penalty on its C-Series passenger jet; though eventually overturned by a red-faced court (yes; we DO need an objective ‘dispute resolution mechanism; in trade deals!), don’t expevct an end to the trump trade tirade any time soon.

Uncharted waters indeed.

Steven Litt

Marketers: Make some noise! Problems are Opportunities

Sorry to be insensitive but Problems DO signal opportunities for marketing professionals. Undoubtedly you have already ‘heard’ of some obvious solutions to Noise Pollution –> increased opportunities for hearing aid chains.

But think a step further away, Marketers! There’s also growth in

  • noise-cancelling headphones;
  • improved  sound insulation for the New Construction/ Home Renovation industry;
  • New Product Claims such as quieter vacuums, dishwashers,…
  • New Services such as ‘Quiet Rooms’ where creative people can write their next great novel, screenplay or manuscript.

http://www.businessinsider.com/noise-pollution-effects-human-hearing-health-quality-of-life-2018-1

Years of work enroute to ‘Overnight success’

This is good! http://business.financialpost.com/news/retail-marketing/luvabella-is-this-the-hottest-toy-of-2018

A fine article & video illustrate how Spinmaster Toys puts itself in a position to be ‘lucky’.

Years of work, and many iterations, to create the next ‘overnight sensation’. (Hmmm – that sure is poetic, or perhaps just pathetic).

This also gives tons of practical insight into the New Product Development process, eg the  iterations of development, costing & cost-optimizing at stage 1,and stage 2 and stage 3 etc; their inspired choices for R&D input for a doll (Mimes! Puppeteers!); and even their thoughts on estimating market size & growth (MRK200 students should def observe 6:00 to 6:33).

Enjoy, baby!  

Steven

 

Practical Progress: converting Eco Intent vs Action

If you view my upcoming videos or have had me as Instructor in Applied Marketing Research, you will know I warn ppl against putting too much faith in respondent survey data on topics that I refer to as Survey Sirens. One of those is ‘eco-intent’.

First- TRIVIA TEST! In what year did  a nationwide USA CPG brand first launch a national eco-responsible line extension? Was it2005? 1999? 1995?

Would you believe… 1990? John Cook, Mitch Gumma, John DePaolis, Marie Blomquist, Mike Ziemke- and  I- were on Kimberly-Clark’s brand team, with tons of logistics help to coordinate 5 manufacturing facilities to source, qualify, test, contract, QA verify and –  eventually – launch Hi-DriTM Recycled Paper Towels. It was an awesome adventure, and an awesome succcess. Consumers actually paid slightly MORE PER ROLL to do the right thing.

Until 1996.

Oh yes, the recession. When it hit, the same consumers would still claim to want to do the right thing- but they looked after the household first- and pennies were pennies! Hi-Dri Recycled retreated as mightily as it began.

The Moral: Don’t always believe Consumer Intent scores about eco-solutions. Intending is not the same as Acting. Intent does not always lead to Acting. Survey respondents may answer optimistically; it validates a more pleasing self-image. And the time gaps & psychological gaps between filling out an at-home survey, and when they see the options in store at shelf – can be vast! Lots of time for cognitive dissonance- ie to escape your own self-commitment!

So it’s delightful to see savvy USA Retailers tighten that time gap & psychologcal leeway. Ahold’s Giant and Stop & Shop banners have installed powerful ‘eco-ranking’ Point-Of-Sale signage- No, sorry, even better, not ‘point of sale’, but ‘place of decision’- ie at the store shelf! Putting those eco-flags in your face, leaves you less room to wiggle out of your own commitment.

 http://www.supermarketnews.com/sustainability/turning-ethical-shoppers-buyers

Ahold- you have earned my endless respect- and let me time travel a bit back to 1990 Wisconsin, to boot! Thanks!

Steven

Online Vs Store Shopping by Generation: Assume Less!

Cool article reveals some shifts in Boomers through their offspring Generation Y. While Boomers are shopping online more, Gen Y members are increasingly shopping multiple physical stores in parts of the USA.

It’s wise not to assume too much about shoppers by age: eg avoid the trap of “old people will do/want this, and younger ppl will do/want this”; there are far better predictors of most shopper behaviours, than age.

https://www.cnbc.com/2017/09/21/retailers-dont-ditch-the-store-millennials-love-them-survey-finds.html

SL

 

The Strategy Behind Acquisitions

Acquisitions – why do they happen?  As an Industry guy involved in many takeovers (taking over, and taken over), I’ve seen many strategic reasons for an acquisition. Usually, there’s more than 1 reason in play. I’ve created a crude table (below) listing 17  key reasons.

This is another of those blog posts where I’d love it if industry colleagues would chip in some insights. Students eagerly await your wisdom!

Not shown here: a column describing ‘What Research Can Do’ in each scenario, so Acquisition decisions are made (and initial post-acquisition business moves are made) with greater wisdom. To see THAT column, you must be enrolled as a student at Seneca college – or be an industry partner to the college.

Membership – and paying it forward- has its privileges!

Steven

why acquire a company?

 

Oslo & Steady wins the race

3 new sources of insight on #Retail trends fyi!

10 new ideas or approaches to inspire readers to try new methods, service a different kind of customer, give a new kind of retail experience

http://www.chainstoreage.com/article/americas-top-10-retail-center-experiences

An upcoming ‘call for ideas’ summit on etail-retail- virtual shopping, sponsored by WalM…

http://www.massmarketretailers.com/store-no-8-thrive-global-launch-innov8-v-commerce/

Finally, an example of how to not REACT to trends, but get ahead of them by a Canadian-based retailer that’s imo a benchmark to admire.

http://www.csnews.com/product-categories/fuels/couche-tard-ceo-talks-electric-cars-fuels-future?cc=3

C-stores by definition are positioned based on “convenience” – consider how treacherous that is!  Examples:

  • when Grocery stores opened late, they lost an advantage;
  • when weed became legally available to millions of Canadian  “glaucoma sufferers” (cough cough…) C-stores Dorito & RollingPaper sales took a ‘hit’;
  • when tobacco smoking incidence fell, C-store visits fell

Again & again, C-stores adapted: seizing new opportunities to sell throwaway cellphones & phone cards, lottery tickets, decent coffee, fresh meals, last-minute gifts & cards, and more. Couche-tard is investing to test other ways to drive shoppers to C-stores in Norway, presumably a lead market for e-vehicles.

Consider: many C-stores have traditionally been linked to (located in conjunction with) gassing up a vehicle. If consumers instead charge up their e-vehicle at home at night, what’s to become of C-stores?

Couche-tard is too smart to wait & see; the savvy retailer is getting ahead by trying & measuring different approaches. As a marketer, I applaud this! As an R&D guy, I’ve mixed feelings about a country test market. The scale is terrific, however everything is oh-so-readable… to the competition. My bet is that this move hasn’t escaped the attention of Couch-tard’s global rival, 7-Eleven. Quite possible that right now, in Irving TX and Chiyoda, Japan, note-takers are busily tuning into “Lillehammer’ on Netflix- and managers are booking tickets for a prolonged stay in Norway. They simply can’t ‘affiord’ not to know what Couche-tard is trying.

SL

Manufacturer sees Space to grow in Green, evolves into a Consolidator!

GreenSpace Brands’ shares are soaring as the firm wins at a role in Canada that SpitfireGlobal long ago urged USA firms to take- ‘Consolidator’ of on-trend ideas.

https://www.bloomberg.com/news/articles/2017-07-07/quinoa-baby-mush-puts-canadian-company-in-takeover-spotlight

There’s nothing really revolutionary about the ‘Consolidator’ role- one could argue that P&G and Unlilever are more truly buyers (consolidators) of brands created by others, more so than inventors of new brands.

From 2004 to 2012,  SpitfireGlobal pushed companies to fill a gap & be a  ‘Consolidator’ in then-new all-natural products; eg sourcing & managing chemical-free & 100% natural ingredient items in Pet Products. Sadly, the companies we pushed thought it too high-risk. It’s nice to see one company has seized the gap (the stock market richly rewarded GreenSpace!)

What does a Consolidator do? At minimum, they …

1. ‘validate’ each supplier’s fit & legitimacy (sustainability, logistical capabilities, etc);

2. administer supplier actions to fit Key Account’s mission, vision, core values, priorities & logistics updates (allowable ship formats, new DC locations, new Vendor forms & certifications); and

3. provide efficient ‘single source’ shipping (eg full truckloads vs multiple part-loads or depot-drop nuisances).

What changes created the Consolidator opportunity? Two big changes:

(i) Retailers destaffed so heavily that many now lack staff on hand who know how to fill out their own New Product forms ( I kid you not!); consequently, they ‘outsourced’ duties to ‘Rep agencies’ who play a growing ‘defacto staff’ role that includes seeking new Vendors, qualifying them, managing category entry, promotion & merchandising activity (far beyond just Control Label decisions). That Rep agency role expansion happened in most categories!

(ii) Now add to this: the complication of traditional-thinking, risk averse Retailers trying to stay abreast of a fast-growing, fast changing, fragmented & risky field such as Natural products-and you have even more reason to hire a Consolidator to answer questions such as “Is this new one-off product line supplier capable of supplying us in full & on-time?”, “Are they aware what’s important to us?”, “Are they legitimately using all natural ingredients, processes?” The risk of selecting an unethical or inept supplier is huge! Because it’s the Retailer who takes the business hit &/or reputation hit, if a supplier fails to deliver, either figuratively or literally.

Are YOU ready to be a Consolidator? It’s not a role for a newbee or casual opportunist: you must know the market & respect the consumer’s preferences. That’s why GreenSpace won; they started as a Natural item supplier who understood Natural consumers’ preferences to be non-negotiable (unlike a baking soda firm that blew a foray into the Natural Products pet category after misreading Natural consumers preferences as ‘optional but not necessary’).

What will you do as a Consolidator? That varies according to how much the Retailer can handle in house & which duties can be done by other Reps/Partners. The firms we advised had to be ready to step up & handle duties as diverse as: document inspection, site inspection, process audits, assistance to ‘remedy or re-source’ any iffy or non-compliant ingredients, graphics upgrades, revised inner pack & outer packs counts & configurations, first-ever logistics models to allow consolidated shipping (many of the small firms had never needed to understand basic Big Retailer logistics -pallet height limits, truck fit calculations, Retailer logistics software, forecasting promotion load inventory, etc).

Yes- there is some hand-holding required!  There’s good reason Retailers hesitate to find & teach unsophisticated firms on Big League Basics.

Are you up to it? Consider: (a) Is the category in which you compete growing quickly (perhaps a bit chaotically?) eg SuperFoods, Craft Beer, Vintage/Hand-Crafted decor, All-Natural, Fair Trade, User Sourced… (b) Are Retailers slow to jump on the trend, due to staffing constraints &/or supplier risks? (c) Do you know that segment’s consumer needs?

If you answered Yes to (a), (b) and (c) -maybe you should think beyond your own business. You might fill a Greater Gap. Seize an opportunity outlined long ago by Spitfire Global, captured successfully by GreenSpace. Be a Consolidator!

SL

Hot Hotel market gets less roomy

On March 8, we discussed Restoration Hardware, West Elm & Williams-Sonoma getting into the hotel biz. Now you can add another name- J.C. Penney.

http://www.chainstoreage.com/article/jc-penney-checks-its-newest-business–hospitality

To be fair, they’re not actually opening actual hotels- just trying to supply them. I doubt that Penney’s wares will compete at places that would have bought decor from Restoration Hardware, West Elm or William-Sonoma. But it is a sign that hospitality – be it the part-time cowboy unregulated tax-dodging sector (airbnb) or the full-time, regulated brands – is a hot sector. Perhaps more competitive than ever – and more fragmented- but hot.

This older article from Skift remains imo a terrific little context-setter on that growth:

5 Charts That Show Why the Travel Industry Is the World’s Fastest Growing Sector

People now travel more. They’re savvy about value, location, decor.  And that travel cements new trade relationships & friendships across borders & cultures. imo the more we travel, the more we learn about the world, and the more we lessen our multicultural ignorance as a species.

So let’s be hospitable. And grow together.

SL