The Tom Dougherty Blog
On this snowy and cold North Carolina Friday, I wanted to point out a story in Bloomberg Business about the rise and fall of Kellogg, the top cereal-producing company in the U.S.
As we’ve noted in our own study of the cereal market, the industry has bottomed out as consumers have, ironically, found healthier and more convenient ways to eat breakfast.
I say ironic because when W.K. Kellogg first founded his company, it was to give consumers a healthier and more convenient alternative to the leftover meats they were eating in the early 1900s. Now, with Kellogg’s top-selling cereal being Frosted Flakes, the cereals are less healthy and convenient than simply grabbing a yogurt or breakfast bar on the way out the door.
What is interesting about the Bloomberg article, which tells the inside story of Kellogg cereals, is how much Kellogg has lost its way as a brand. You see, brands aren’t just marketing endeavors. They are also the compasses that direct everything you do, from product development to marketing to what you stand for (and who your customer represents).
In Kellogg’s case, it went so far into the unhealthy, sugar cereals that it got on the wrong side of history. It didn’t help that it tried to enter the health market by buying Kashi – then transforming the brand into Kashi Chocolate Almond Butter cookies and even Kashi frozen pizzas.
Talk about not understanding the brand.
But the problems of the cereal companies are larger than how to handle its individual brands. What Kellogg and its competitors (such as General Mills, which has had tremendous success with its Cheerios brand) need to consider is what they should own.
Right now, they own that spot where dying brands like Radio Shack, Blockbuster and others were several years ago. They look archaic and completely out of step.
What they should own is breakfast. We’ve seen a few attempts at it, as referenced in our study. But with each passing day, fast food restaurants and other outlets are owning that daypart and no cereal company is going to out-product its way out of the dilemma.
If one of those cereal companies wants to know how to turn around its fortunes, call me.
I have a confession to make. I like to collect things and I’ll go through obsessive stages where it’s either collecting ties with elephants on them or socks with unusual designs. (eBay is my best friend.)
Over the last year or so, I’ve also been collecting old pocket watches that go as far back as the 1800s. I find them fascinating and feel they are a piece of history.
They are also a style. A fashion, if you will. It’s from that perspective that the first marketing for the Apple Watch is taking the right approach. It’s not about functionality. It’s about fashion.
For the moment, the marketing is subtle. Model Candice Swanepoel is on the cover of Self magazine next month wearing an Apple Watch. There will also be a 12-page spread in an upcoming issue of Vogue.
Why is this the right approach? Because, let’s face it, the reason any of us (including grey-haired men with pocket watches) wear a watch is because of how it looks. We live in an era in which finding the correct time or any other piece of information is right on our phone. I have children who don’t wear a watch because they check the time on their phone. Even if you do wear a watch, you most likely chose it because of how it looks on you.
The Apple Watch is a cool device, like many other Apple devices. But to make the Apple Watch a success, Apple had to understand the reasons why people buy the watches they do.
That’s where fashion comes in. Right now, the approach is feminine but I can imagine Apple expanding that reach through a fashion reflection of other types of customers. The runner. The cool male. (Think Matthew McConaughey in the Lincoln ads.)
It’s the right way to go. Be an aspirational reflection of the customer and understand what drives the market.
If only other brands understood that approach, there would be more brands that were actually stealing share.
Target just announced that it is going to offer free shipping on all orders over $25. Target’s free shipping offer does nothing more than make Target look like everyone else.
I tend to buy things off eBay and compare costs to items with free shipping. Around the big shopping holidays, retailers offer free shipping on nearly everything.
But Amazon Prime still beats them all. Even at $99 a year, it is a deal and you get free shipping on as many orders as you care to make in a year and you get it in two days. Besides, what can I not get at Amazon that I can’t at Target?
I get that Target is trying to cast a wider net, but it’s actually a desperate move in the face of the competition. The reality is that the US customer, in particular, has been conditioned to free shipping. I think that it is already a table stake in the retail category any more. Retailers like Amazon have taught us that.
This isn’t news. It’s catch up. And this is precisely more of the same from a brand that once stood up to Walmart by offering something different and better. Now Target is just the same and the same.
I always find it interesting how the patterns of our life evolve into new patterns.
My job, as a brand guy, is to take notice of those patterns and ask why they exist in the first place.
And so, I have noticed a change in myself and habitual patterns, even when it comes to writing this blog. In the past, I would begin the day by scouring over a host of news websites: Huffington Post, Yahoo!, USA Today and the New York Times, to name a few. I read up on business happenings and connect myself to an idea within a relevant story to my business.
But now, things are different. My process matured into something new.
What happens when I find that story and need a little more info to tell it? That’s when I turn to the most reliable, self-curated news app I am aware of: Flipboard.
The app is an elegant, create-your-own news magazine. I can search any topic and a litany of articles from around the web are presented in a well-crafted “flipbook” about that topic.
This doesn’t leave me without the headlines. I can always check out the sites, “Daily Edition” or choose “news” as a topic choice.
Why did my blogging pattern change?
It’s simple. I wanted the ability to choose the news I wanted to help me tell the stories I wanted, and not have that process dictated for me.
Flipboard gave me that control.
I’m sensing a trend when it comes to the Academy Awards, which gave its Best Picture award to Birdman last night. The Michael Keaton-starrer was about a former superhero actor who wants to be important, so he stages a play.
Two years ago, the winner was Argo, Ben Affleck’s opus about how a fake movie got a handful of Canadians out of Iran. And the year before, the winner was The Artist, a look at the silent movie era.
We can debate the merits of those three films, but one thing is clear. Like the rest of us, the members of the Academy of Motion Picture Arts and Sciences like to see an aspirational version of themselves.
That sentiment, of course, is the first rule of having any winning brand. Your must be an aspirational, emotional reflection of the target audience that you are trying to reach.
Three times in the last four years, the Oscars chose to honor a film that is the best representation of themselves: An actor looking to redeem himself. A federal agent posing as a producer in a fake movie to save lives. An actor and actress standing on the cusp of a new art form.
These are what we call brand faces, what the reflection looks like when the target audiences looks at your brand.
There are certainly other reasons why some movies win and others don’t. Some are just better. Some promote a message the academy wants to promote. Some are seen as representative of the year.
But if recent history is any example, the academy members have been more sensitive to their relevancy in the world. It’s foolish to speculate why that emotion may run high (without quantitative research) and it may just because there have been three good (but not great) movies on the subject.
The lesson here, however, that winning brands are that emotional brand face. That’s why the Oscars celebrated Birdman.
We all love breakfast. There’s no getting around it that eggs, coffee and whatever else you want to include in that category is like nectar of the gods to many of us.
That’s why I lament that there’s not a Denny’s restaurant in town. That’s hard to believe in a city with a population of more than 270,000 people. I mean, Denny’s has more than 1,500 locations in the US. You’d think it could find a place in Greensboro, NC. (It did have one, out in the outskirts, but it closed.)
But maybe there’s one hidden here because the restaurant chain is taking advantage of the newest trend in the industry: Fast casual.
Denny’s is coming from the other direction from the fast food restaurants that are moving up from fast to casual. Denny’s is coming down to fast from casual with its new concept called The Den.
These fast-casual spots have been developed for college campuses and contract service providers (such as those in a large company’s cafeteria) but Denny’s plans on opening off-campus locations in the future. (It opened its first in San Diego recently.)
Denny’s is actually doing well, with same-store sales increasing nearly 5% for the fourth quarter, but opportunities in this category are few. In the fast food industry, chains have been aggressively attacking the breakfast daypart because lunch, dinner and late night are maxed out. (That’s why you see Taco Bell entering breakfast, for example.)
Denny’s has the permission to enter this fray because its bailiwick is breakfast. The Den will serve breakfast all day, something I’m sure is a hit on college campuses.
I’ve spoken a lot about brand permissions, what categories brands have permission to play in based on their equities. Denny’s has permission to play in this space because, even though it might claim otherwise, it is not so high class that consumers won’t see the transition as an emotional problem.
The issue is that the breakfast category is crowded. Everybody had entered that daypart or is planning on it. That means someone is going to lose and wonder where its next opportunity lies.
That’s the reason why fast food chains have gone fast casual, trying to make a better in-store experience rather than consumers just zipping through the drive-thru. (Studies have shown that you spend more if you go inside.)
My guess is that the Den, if properly marketed, will be a success but force out others entering the market. Now, if it can just enter the Greensboro market, I’ll be happy.
Get ready, Facebook friends. Big Brother is about to be in your face in greater force than ever.
Facebook has announced it will show product ads to users that allow brands to show off multiple offerings and, in some cases, their entire inventory.
Now, before you think these Facebook product ads will overwhelm you and you will start thinking about a different social network, Facebook says the ads will be targeted to specific users.
Yes, that means Facebook will be using your personal data to decide which ads are more meaningful to you than to the rest of the world. Show an appreciation of cross-country skiing? Get ready for some ads from places like REI.
While this sounds like too much control from the home office, it’s actually the way of the world. Already, as most of you have probably noticed, you get ads on the Internet based on sites you just visited. Checked out a hotel in Sao Paulo, but didn’t book? It’s not out of the ordinary for ads of those hotels to pop up on other sites you visit.
Already, big data is the driving force for most media placement. We are targeted each day with messages that are based on our own lifestyle, usage and online presence. There will be a point where someone goes too far (think NSA), but we’ve already gone past the point of no return.
For brands, the use of big data is important because it gives the reality to the idea that your brands must be a true reflection of your customer. While most brands still get that wrong (their messages are usually about the product or brand, not the target audience), this science is a tangible way for brands to be more effective in reflecting the customer.
Now, for this to truly work, whether on Facebook or not, brands must reflection the aspiration of the target audience, not just the nuts and bolts of their products. When that happens, the brands will be able to take full advantage with these Facebook product ads.
It’s a funny thing, there are some brands you can always rely on.
These brands are a certainty. Just as certain as me waking up with my right leg each morning. Barring a catastrophe, these brands aren’t going anywhere.
Disney. Coke. Apple. It’s short list of powerhouse brands. And for me, they all meet the highest level of greatness and expertise.
These are the kind of brands that you always expect to shine. They fulfill your expectations, and sometimes (actually, most of the time) they surprise you with more.
Today, while going about my morning routine, I realized there was another such brand that I should add to the list of greats: PBS.
For as long as I can remember, PBS has symbolized television programming that was several notches better than the competition.
The shows on PBS aren’t brain rot. No, they are thoughtful, provoking and memorable.
This is an interesting time in television as the cable networks (like AMC, FX, HBO, etc.) have propped up their own brands that are siblings to what PBS has long produced. It’s the major networks that have fallen short, trying to be for everybody when they are really for nobody.
Think about the longevity of the PBS brand. When your kids grew up, who didn’t you mind them watching Sesame Street or Mr. Rogers? And maybe you, just like me, felt a twinge of guilt if you opted for say, Merry Melodies instead of the PBS Kids roster.
It’s that twinge I want to focus on; that little spark of something that feels different and better than the rest that makes PBS special.
What’s wonderful, the goods at PBS haven’t stopped. My favorite show, Downton Abbey, has a home on the network. What’s more, so do my favorite documentary series, Frontline and This American Experience.
Yet, do you want to know what’s best of all? I can still count on Sesame Street for my family. But this time it’s not for my kids, but rather, my granddaughter. How sweet is that?