Saturday, February 27, 2010

The Economics of Getting Drunk

As you might be able to tell, I am a big fan of infographics. Here is a really good one by Thought this might be a fun way to start off Saturday morning…

Stumble Upon Toolbar

Friday, February 26, 2010

Blockbuster: Give up.

blockbuster On Thursday, already unstable Blockbuster stock took a 20% tumble when it reported a fourth quarter net loss of $435 million and a 16% decline in one of its key sales measurements. Over the crucial holiday season, the company reportedly increased its advertising budget and added big titles to its library, apparently to no avail. Blockbuster, it seems, is in dire straits, and most analysts agree.

Unfortunately, I have no good news for the company from my perspective. I walked into a Blockbuster a few months ago and felt as if I was in a time machine back to the 90’s. The business model of a video rental supermarket is simply antiquated and increasingly dysfunctional, especially to my generation.

saupload_bbi Blockbuster’s video rental stores are now getting harder to find, too. The company has already closed 1,300 of its locations throughout the country, and BMO Capital Markets analyst Jeffrey Logsdon predicts that it will close another 545 this year. The heavily indebted company (estimates claim it owes around $200 million a year) does not rely solely on its store-generated business.

Blockbuster has made a half-assed entry into the growing kiosk rental industry. This is basically like a snack vending machine, but with DVDs.This is appealing to Gen X consumers for two reasons: first, it allows you to grab a movie on your way out of the grocery store without having to make any other stops. Simply put, it’s more skeptical-785083efficient. Secondly, I don’t have to deal with weird looks from the human cashier at the Blockbuster store when I decide I want to watch Donnie Darko and The Devine Secrets of the Ya-Ya Sisterhood in the same night. Sometimes it’s just that kind of day, ok?

The company has also made entries into the DVD-by-mail service and the instant-access online video markets as well, mimicking its competitor Netflix. It was late to this trend, however, and probably missed its opportunity to use its well-established brand name to take significant market share.

Netflix, Blockbuster’s main competitor, has seen increasing annual revenues over the past five years. Since 2004, annual revenues have grown nearly 400% according to their SEC filings. It has become synonymous to conscious consumers with fast, reliable through-the-mail and online video rentals. It also enjoys a very positive outlook from nearly every major stock rating agency.

What do you think? Can Blockbuster climb out of its own grave, or will its debt and competition continue to shovel the dirt on its head? Please share your opinion.

Stumble Upon Toolbar

Google Infographic: Facts and Figures

Google is a pretty interesting company. Just to gleam a few of the more interesting facts off of this graphic, gets more traffic everyday then the population of the entire world combined. Google owned Blogger (where you are right now) has 270,000 words written per minute. Pretty impressive if you ask me. For a Gen X’er, Google may well be the most important company of the decade, if not our lifetime.

Check out Pingdom's massive infographic

Stumble Upon Toolbar

Thursday, February 25, 2010

The death of a Giant


After a long string of negotiations with Sichuan Tengzhong, GM is finally throwing in the towel on its Hummer brand. Probably. "GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," said John Smith, GM vice president of corporate planning and alliances.

The end of this particular GM brand is more significant, I think, then the death of Pontiac and Saturn. I don’t think a single person shed a tear when Saturn quietly passed away, and although Pontiac has a lot of important history (the GTO, anyone?) it has been defunct of innovation for what seems like 30 years.

Hummer, however, seems to mean much more considering its substantial military service, and its association with American bravado and testosterone. At least, it was associated with such until moms found all the roomy cargo space in the back could be used to carry kids instead of guns and ammo.

Despite its relatively recent transition to what I refer to as the “urban princess warrior mobile,” for most people “Hummer” still conjures up images of a camo-skinned-half-jeep-half-tank-baby. It represented a “stop at nothing” attitude, the idea that anything could be conquered with enough torque and big enough wheels.

So perhaps this particular company's demise is indication of greater system changes. Poor management aside, Sichuan Tengzhong was only offering GM $150 million for its failing brand. How is Amurica’s most iconic symbol equal in value to a single Jackson Pollack?

no. 5

Well, perhaps Hummer no longer echoes American sentiment. Americans today, after all, are more aware of the environment and much more budget conscious then one year ago. The over-priced, over-sized gas-guzzler is

no longer what Americans look to for an indication of success.

Over the top luxury is on its way out. Conscious, informed spending is the new trend. Just look at the success of Tesla Motors. Or the introduction of Audi’s upcoming E-tron. According to this WSJ article, the Luxury Institute, a New York research firm, found that younger and more-affluent consumers seek information about corporate social responsibility more actively than their older and less well-off counterparts.

In no way am I claiming that America has been castrated by the green trend. I think rather the opposite, in fact. An increase of informed consumers indicates an increase in education across the country as a whole. If we are educated and conscious of what is happening around us, maybe the world will listen next time we begin talking about something. It certainly a much friendlier image then that of the “stop for no-one” hummer. So the death of Hummer, though tragic, might actually lead to a stronger tomorrow.


Technorati Tags: ,,,
Stumble Upon Toolbar

“Men don’t want to look at men”

I thought this was a really great article…

bag1 (1)


Stumble Upon Toolbar

Wednesday, February 24, 2010

Alexander McQueen: From Beyond the Grave


I would not consider myself a fashonista. At best, I am a sort of “clothes horse,” and like to present the illusion to those around me that I actually know what I’m doing when I get dressed in the morning.

Because of my disconnect from the fashion industry, news of Alexander McQueen’s suicide last week hardly moved me. Popular media also seemed to be aloof of what the fashion world viewed as the loss of a young superstar. Mentioning it to my friends, especially the male ones, his name seemed familiar, but nothing of note.

McQueen was a young designer who was working with Gucci when he died. He rose to fame in the 1990’s for his edgy style, and later collaborated with several very prominent brands, including Puma and Louis Vuitton, before being bought up by Gucci to begin his own line of couture products. He was said to have broken up with a boyfriend, whose name is tattooed on his arm, a factor which is believed to have led to his suicide. Other rumors claim it was the recent death of his mother.

This week, Gucci announced that it will carry on McQueen's brand, and holds strong prospects for its success. But is it possible to carry on this brand without its brains? Robert Polet, Chief of the Gucci Group subsidiary, commented that, "Lee (Alexander) is of course irreplaceable."

To me, the idea of carrying on without the primary designer is not absurd at all. After all, McQueen had years (almost two decades) to establish his brand and style. The real question I am asking is why would Gucci want to continue it?

McQueen’s brand, though highly respected and influential, never actually moved a lot of products. Though Gucci might want to remember a fallen hero by continuing his legacy, it might not be the best thing for their income statement. Last year, though doing better then expected, revenues dropped over 3%. Dropping revenues does not imply that the company should be throwing money at a largely commemorative brand that will (probably) ultimately make no money.

From the Gen X perspective, however, this might be marketing gold. The two things I appreciate the most from a company is vision and honesty. To me, continuing McQueen’ s legacy, instead of throwing away his high-brow wearable art, shows that Gucci is committed to both of those ideas. It is apparent from this action that Gucci values its vision over its balance sheet, and though this might mean the company losses value as an equity investment, it is benefitting its overall brand image and reputation.

Respect, Gucci. Mad respect.


Technorati Tags: ,,
Stumble Upon Toolbar

Tuesday, February 23, 2010

Toyota’s Crisis Management

From the perspective of a young man who is marginally obsessed with cars, the name Toyota has always conjured images of utilitarian vehicles whose primary demographic was people looking for a machine that will last a long time for a little amount of money. Toyota’s brand never achieved the exciting racing connotations associated with its competitors Honda and Nissan. This, I suspect, is probably due to their lack of success as a Formula one race team, and their focus on fuel economy rather then engine power.

Despite not placing high on the “dream car” list of a young car enthusiast, Toyota is undoubtedly one of the most recognized and respected brand names in America. As of 2006, it ranked the highest in return customers for any US car manufacturer, with its luxury brand Lexus taking a close second place. It seemed like it was the Golden Child of auto makers. At least, it was

Due to its recent recall, the Japanese auto-giant is experiencing a bit of a brand crisis. The one solid concept the company was known for (reliability) has been put into major jeopardy. Nearly 4.8 million vehicles of both the Toyota and Lexus brand have been recalled due to functionality issues with floor mats and accelerator pedals.

So what has Toyota done to make amends with angry customers? Well, if you watched the Super Bowl you might have seen this Toyota public announcement:

This heartfelt ad might seem like a good idea at first. But if you examine the response to the video on YouTube you will see that the internet crowd does not buy it, especially after information came out to suggest that Toyota stalled recalling faulty vehicles for almost a whole year. One commenter says:

“If they have no respect for me why should I respect them???”

This Bay City News article asks readers to respond to Toyota’s campaign, and received some of the same kind of outrage:


Despite the backlash, these ads might be the best way for Toyota to go about repairing their image. The Big 3 US auto makers has long faced quality issues with their vehicles, and some claim that their slip into obscurity may be due to their lack of honesty with their consumers, and their perceived stubbornness in changing practices to ensure higher quality. Also, the responses on the internet aren’t necessarily the views of American consumers as a whole.

I am not one to be easily influenced by a sappy TV ad, and I think most educated American’s are in the same boat. Though it might be difficult to translate into a marketing campaign, the best way to show quality is through a good track record and word of mouth. In my opinion, the only way for Toyota to reclaim its former days of glory is to actually learn from their mistake: admit quality problems immediately when they are recognized and make sure your 2011 models are spotlessly reliable.

The fact that Toyota has shut down some of its manufacturing plants to deal with problems in current models might be a pragmatic business solution, but its marketing implications might not be as good. Stopping production implies that there are deeper problems in the company then just floor mats and accelerator pads… to me, this doesn’t seem like a good thing to be putting in commercials for the public to see.

Despite its recall, Toyota still enjoys a decent reputation among the American public. According to this NYT article, it is still ranked 3rd in reliability, and Consumer Reports describes their vehicles as, “extremely good, reliable cars.”

So, Mr. Akio Toyoda, my advice to you is to wait out the storm. Lay low and let the product speak for itself. If your commitment to learning from your mistakes is true, the consumer will recognize this as a snafu. If not, you might as well begin reissuing the Ford Pinto with a Toyota insignia on its

Stumble Upon Toolbar

Surveys as a Marketing Tool

In the 1987 classic Wall Street, Gordon Gekko said, “That's the one thing you have to remember about WASPs: they love animals and hate people.”


That's completely irrelevant to this article, however. Gekko did have another bit of wisdom that is helpful to think about, “The most valuable commodity I know of is information.”

Primarily, surveys supply a source of information directly from current or prospective customers. If correctly done, they can show you exactly where you need to improve your business by giving you information on customers perception of your product.

While conducting a survey for a client, I noticed that surveys also hold another possibility: a cheap marketing tool. This particular survey was for a client who felt their services were being underutilized by the community they served. By sending out surveys to thousands of people, we found that interest in the services we were inquiring about increased, simply because a large portion of these people were unaware that these services even existed. Without even intending to, and at very little cost, the survey had served as an educational marketing outlet for our client.

Surveys can serve a dual purpose, by gathering information from customers about how to improve your service while simultaneously educating new customers about your product.

The pitfalls to having the survey play this double role is that if you try to use an informational survey the same way you might use a poster or flyer, the data gathered will be completely unreliable. The art of taking a survey is delicate, and any hint of bias can screw up the results. A survey is not meant to champion the benefits of a product, but merely gather information about it. Surveys can only really be used as an effective marketing outlet if the product you are advertising is relatively unknown.

I received an example of this first hand when I received an email asking me to take a survey about my perception of a service offered on campus. I knew of the service, but didn’t know exactly what they did. The survey asked specifics about what I thought about each facet of the organization, and by showing me all of the different things offered, I was intrigued to investigate more about it on my own.

I think marketing was best described by Le Herron, former CEO of O.M. Scott & Sons, as, “Marketing is understanding what the customer’s needs are and communicating our solutions in ways that he can understand.” Letting a survey do the talking is one way to achieve this.

Technorati Tags: ,
Stumble Upon Toolbar

Monday, February 22, 2010

What is BRANDom?

The name BRANDom, if you haven’t already figured it out, is a portmanteau (a word formed by combining two already existing words.) I will be gathering information from many different sources, and have no intention of keeping the blog specifically focused on one niche of the business world. BRANDom will be dedicated to distilling and posting random, interesting, and informative opinions on marketing, brand management, and business from the perspective of a Gen X'er.

I began this blog because, in the course of my week, I come across many interesting articles and studies on managing a brand name, and I wanted an outlet to publish them. I work with an organization called Hilltop Consultants, a not-for-profit group that works with local and national charities to improve their business models. Due to the fact that I work with non-profits, the methods I research and learn about aim to improve businesses through the most cost effective way.

I do not intend, however, to write this blog exclusively for non-profit brands. The articles and advice posted here are applicable to any business model, and will always be focused on giving the most bang for the buck.

Stumble Upon Toolbar
related Directory My Zimbio