• Spicy Chemistry

    Food chemists. These are the folks in white coats who develop the products that consumers buy. Sometimes the process can take years, and as we know it is always best if such a process is marketing-driven since, in all but the most rare instances, products should be based on consumer needs. But the reality is that food chemists and marketers not only don't always get along, and they often operate within their own separate silos. But lately, it seems that marketers and food chemists have been playing a bit nicer, and this should make for far more successful product introductions.

    Take the latest research on the effects of spice on brand loyalty. These fascinating studies tell us a lot about how taste affects the choices we make. It turns out that you get endorphins when you eat something really spicy, for example. The release of these neurotransmitters is something that people actually become addicted to, and the entire experience can lead to brand loyalty. As a result, marketers and chemists are developing some very interesting flavor combinations in an effort to find a hit. Young, Hispanic, and old shoppers all have a propensity for spicy foods for very different reasons, but together they represent a very large and lucrative market..

    And as for the research on endorphins, it is simply fascinating. It reminds us that marketing research isn't all focus groups and surveys, and that physiological research, which does not often lie, can tell marketers things that consumers cannot.

  • Paperless Tickets And Control

    First it was the airline industry that slowly shifted consumers away from paper tickets, which can be lost or stolen, and towards a more digital format. Many young people don't even remember the paper tickets made of card stock and covered with strange numbers. Now it is clear that the events management industry is getting into the act as mobile apps and other technology has facilitated the adoption of "paperless" tickets.

    Let's get one thing straight. These tickets aren't yet paperless, since most people still print them out in one way or another, and even if you do use your phone the usher must give you something made of paper to get you to your seat. Perhaps these days of paper are numbered but they are indeed still here. For sports properties, the issue is really all about control. A ticket for a Colorado Avalanche game sold through Altitude Tickets cannot be duplicated, lost, stolen, resold, or otherwise compromised. The property controls the ticket, in this instance, and the consumer can transfer the ticket to someone else within the system, but that's where the freedom stops. This sort of control is exactly what marketers want (and ticket brokers and other unauthorized resellers dread), and the Internet gives it to them.

    A recent example of this is happening in Major league Baseball wherein a trend is developing as many teams are now actually penalizing season ticket holders for remaining with the cool-looking paper format. Heaven forbid consumers might want an attractive, non-perishable, tangible keepsake to commemorate their intangible, perishable experience, but that is another matter. The Braves, for example, now penalize season ticket holders $250 for remaining with a paper format, and teams like the Red Sox, Indians, Mets. Rays, Nationals, and others all have some new program in place. Is this a good idea?

    In a word. No. It is never a good idea to essentially coerce customers into doing something they may not be ready to do. It makes them angry and want to organize on social media. And it makes the media want to report on the unfairness of it all. And season ticket holders are your lifeblood, so it is best not to poke the bear, so to speak. I would instead  recommend a slow migration with carrots rather than a bullying approach loaded with sticks, but spectator sports don't operate like normal businesses. Normally, consumers won't buy a product that doesn't meet their expectations and routinely underperforms, but fans do exactly that for paying to watch hapless teams like the Chicago Cubs and Colorado Rockies. The point is that people will come anyway for the most part as long as marketers provide a pleasant peripheral experience. The sport product is very unique in this way. As for the ticket issue? Sport properties should back off and think of more creative ways to get fans to do what they want them to do. Ultimately it will all be paperless at every level of the process, but the technology isn't really there yet, employees, many of whom are older and work on a volunteer basis, aren't yet ready, and consumers will adopt something when they are good and ready.

  • Subsidies And Sour Apples

    After realizing that the innovation party is in fact over, maturing Apple might finally have to come to yet another inconvenient truth. It appears that the industry, in its maturity, is finally moving away from the subsidization of its phones as a means to garner customers. The phone, it appears, has finally become rather commoditized, and Apple no longer has a hold on the formerly "cool" smartphone segment. They all look alike. And now Apple looks more like an overpriced relic of yesteryear than it does the prime innovator of the tech space.

    Carriers have been moving towards a model wherein customers pay full cost for their phones, usually under some sort of installment plan, for a few years now. The industry is rather turbulent right now, but it appears that eventually the phone will be an entirely separate entity, and consumers will choose among a variety of relatively similar plans. It will all look and be alike. Sounds like the airline industry, and the friendly airwaves will probably increasingly resemble the friendly skies in the near future.

    As for Apple, it is unclear how it intends to stay on top. Resting on the laurels of a company's prior innovations is never a good basis for a future marketing strategy. What's next? And now that the company will be forced to lower the price of its phone, will it finally invent something new and cool?   

  • Craft Beer Really Cranking Now

    Like carbonated soda, the overall beer category has been contracting for many years. In 2013, it fell by almost 2% as consumers continue to shift to other categories of alcoholic beverages. But craft beer, defined as production of six million barrels or fewer annually, has been a bright light in an otherwise dismal product category.

    The craft beer category grew by 20% in 2013 and now comprises about 14% of the total beer category by dollar amount and 8% by volume in the U.S. Craft beer has much higher price points and profit margins than larger-batch beer, which accounts for the dollar/volume difference. Indeed this growth has remained steady for many years and shows no signs of abating as consumers seek out tastier and higher alcohol-content beverages.

    But when will it peak, as all things do? It might be quite a while, so don't bet on it. In 2013 alone there were 413 brewery openings compared with only 44 closings, an illustration that the industry is still firmly entrenched in the high growth phase of its life cycle. demand continues to increase, and it is estimated that 110,000 jobs (although most of them are rather low skill/low pay) now depend on the industry and the relatively young consumers that drive sales.

    This looks a lot like what happened in the natural/organic products industry over the past 20 years. Consumer tastes shifted favorably, new product introductions proliferated, distribution channels expanded, and larger players got into the act. Now natural/organic penetration into the mainstream is substantial, and craft beer is on its way. History can be a great teacher, and case studies are a very useful predictive tool. What other currently small industries might follow suit? Stay tuned.

  • GMO's Trump Organic, Wal-Mart Makes Move

    My how times have changed. For the first time, the "non-GMO" issue is more important to consumers than "organic". Never mind that a Certified Organic product must be GMO-free by USDA decree as per the rules of the National Organic Program, as such important facts are often lost on the general public. And in the public's defense, the organic industry has done an absolutely dreadful job over the past 20 years of educating the public as to what Certified Organic really means. Very few people know the difference between "natural" and "organic", but this is all moot, since what the public believes is the world in which a smart marketer must dwell.

    A recent shopper survey conducted by researcher MamboTrack revealed that 80% of self-described "health-conscious" consumers seek non-GMO products, with 56% saying that non-GMO was key versus 52% with regard to organic. Gluten-free was also a huge factor, but GMO's are beginning to win out in the current zeitgeist. One would think that this would be an excellent opportunity for providers of certified organic products to educate the public as to what these products really are and would thus effectively address both major concerns at the same time. But this hasn't happened even 20 years after the law established an official federal "organic" category. Why don't organic marketers do their jobs? One reason is that there aren't very many truly large providers around to fund such an expensive and extensive marketing campaign, and the trade association has utterly failed to organize a cooperative effort. Demand for organic ingredients has always outstripped supply in the organic space, since the U.S. still has relatively few organic farmers.

    Ironically, Wal-Mart has the opportunity to change all of this as it prepares to introduce a rather ambitious line of USDA Certified Organic products (called "Wild Oats"). It appears that the company has been quietly building up a network of suppliers over the past few years to address the demand issues. It is very likely that organic products, previously only available to higher income folks, will become widely available at reasonable prices for the first time ever. Thanks to Wal-Mart of all entities! And make no mistake that Wal-Mart has the best chance of educating the consumer effectively since the retailer is the supply chain captain and closest to the consumer. The line clearly needs a major marketing program to support it, and what an opportunity for the entire industry to benefit from a former foe. This will really rile up the hippies in the industry who never really believed that organic products could be produced and marketed at high volumes and reasonable prices! Profit margins at places like Whole Foods Markets and Horizon Organic Dairy are likely to suffer. But will the retail powerhouse, unfamiliar with the quirky nature of the organic industry and its current base of consumers, introduce this product properly? We shall see.

  • Vermont Makes GMO Move

    Much is made of labeling changes when they are proposed because the effects of such rules reach far and wide. The Food and Drug Administration is poised to make some changes, which I have discussed in previous posts, but the issue of Genetically-Modified Organisms (GMO's) has yet to be addressed in the U.S. despite major efforts to require that products that contain these ingredients be labeled as such. Until now. After a similar failed effort in California last year, Vermont, in the true spirit of federalism, has acted and will enact a GMO food labeling law.

    Crops are usually genetically-modified in order to increase yields, become more drought resistant, and for other practical reasons. Many other nations have enacted laws against using these ingredients, and there is a voluntary effort among a few major producers in the U.S., to replace them, Cheerios being most notable among them. But legislation at the federal level seems to be fairly far off since these agencies move at an often geologic pace. This is why our system of government is set up so that states can enact their own laws, and they have been doing so with such issues as medical cannabis, gay marriage, and other contentious national issues. The issue within the state, as is the case in Vermont, might not be quite so contentious, and when enough states enact laws, there is eventually activity at the federal level.

    This is a great illustration of how the legal and regulatory environment affects every aspect of the marketing mix, providing opportunities, threats, or both simultaneously as seems to be the case here. I personally would prefer that marketers wishing to differentiate their products as "non GMO" do so voluntarily on their labels, rather than requiring them to disclose the nature of ingredients that have never been proven as unhealthy. In fact, I am not aware of any reliable studies linking GMO's with anything negative. Despite the sketchy science and emotion, perception is indeed reality in the world of marketing and many consumers are concerned about genetic modification. If enough of them within a certain state want to make a law, that is their business. If enough states get in on the act, then the feds should make a national ruling, which would ultimately be cheaper than dealing with a patchwork of state regulations for everyone involved. At any rate Vermont is first, and although a relatively insignificant state, it could nevertheless be the impetus for a new agricultural order. As General Mills has demonstrated, product developers are taking note.

  • McDonald's Firing Back?

    Well, that's what the company is saying they intend to do anyway...So, aside from offering free coffee at peak hours in many locations, what's the planned response to Taco Bell's much lauded efforts at penetrating the breakfast market? It seems that the strategy for product development is "stay the course" as McDonald's expands its more upscale McCafe menu. But will the fast food giant offer any new breakfast products in the near future to match the publicity generated by Taco Bell? Not now, thank you.

    The industry leader does plan to launch a new advertising campaign replete with a new creative strategy. Instead of the usual "slice of life" strategy, expect instead to see a more comparative, confrontational approach. McDonald's cooks its eggs, sausage and bacon, the company says, and the whole operation is not a "microwave deal". I would expect then that for Taco Bell, it is in fact a "microwave deal".  This information may not go over well in the marketplace, but then what does the Taco Bell customer expect? Fresh waffles?

  • The Passion of the Christians

    If it seems to you that there have been quite a few biblically-themed movies out lately, it isn't your imagination. "Noah", "Son of God", and "God's Not Dead" have all been introduced in 2014, and this is probably a record for religion at the box office over a four month period. All of these movies have done rather well, but none have done well enough to make the top 10 grossing Faith Flicks of all time. Indeed the top four, adjusted in today's dollars of course, were all screened prior to 1960, so no one has really even come close of late. "The Ten Commandments" from 1956 took in over $1 billion and 1959's "Ben Hur" wasn't too far behind at about $800 billion followed by "Samson and Delilah" (1949) and "The Robe" (1953) at almost $500 million each. Mel Gibson's 2004 "Passion of the Christ" rounded out the top five at well over $400 million as well.

    In addition to the three that have already been released this year, a fourth, "Heaven is for Real" opened just a few days ago, and later this year "Exodus: Gods and Kings" will also be released. What gives? Is it some vast conspiracy funded by high level Christian oligarchs, a sign of a new social religious awakening, another movie industry fad, or simply a coincidence? We may never know for certain, but we do know that church groups have been renting out theaters left and right and the movies thus far are doing well, so the market for these flicks, however biblivally inaccurate, has not yet been saturated. Targeting the faithful is big business. Will there be even more to come in 2015? Could this become a consistently lucrative genre for filmmakers, as comic book heroes and science fiction/fantasy has become over the past few years? Stay tuned, and Happy Easter!

  • Catalogs Keep On Coming

    Retailers have long been fond of what is known as a "multi-channel" approach to distribution. Such an approach to "place" strategy allows the store to be wherever the consumer wants to shop whether it be physical brick-and-mortar locations or via online retail options. This is not very interesting. What is interesting in this digital age, however, is that the catalog, long a reason our mailboxes fill up prematurely while we are away on vacation, remains an important part of the retailing mix.

    Today's catalogs are much smaller, more graphically pleasing, and less product intensive than were their predecessors, and the venerable strategy places marketing communications materials where we can't avoid them. In our mailboxes. marketers mailed 11.9 billion catalogs in 2013, a number that has actually started to increase after years of decline. Why do they do it?

    It appears to work. In true multi-channel style, a consumer may thumb through a catalog, see a commercial on TV, visit a store, and then finally buy online after receiving a sales promotion. It looks like the catalog is finding a place as an integral part of all of this. catalogs allow for creative layout in a way that is limiting on mobile devices, and it is important to remember that catalogs are a form of "self-paced" media, wherein the consumer can read at his/her leisure. This is an advantage over radio, TV and online advertising.

    All of this is bad news for environmentalists, but good news for the post office, since these marketing activities provide a lot of revenue for the struggling USPS. Consumers may be miffed at all of the recycling they have to do, but just try to get off of one of these direct marketing lists! The fact of the matter is that when you do business with a retailer, it will market to you in any way it can. Unlike the case with telemarketing, a "Do Not Mail" list is not on the horizon.

  • Paper Replacing Poly

    By now, I think we all know that the days of the free plastic bags we get at the supermarket and subsequently re-use as trash liners (you know who you are!) are indeed numbered. Already outlawed in several areas, plastic bags are being replaced by durables such as cloth bags and the traditional paper option. Let's forget about the fact that plastic bags are actually up to three times more harmful to the environment than are paper ones when you conduct a Carbon Footprint or a Life Cycle Costing analysis, but that inconvenient truth is a matter for a different post.

    In addition to a grocery store comeback, it looks like paper is now making a rather deep foray into the world of hot beverages. Have you noticed that what we all erroneously call "Styrofoam" is all but disappearing from the "drinkscape"? Let's forget about the fact that these cups are not and have never been made of Styrofoam, but are rather composed of a substance known as "expanded polystyrene", but that is yet another matter for yet another time. Styrofoam is a trademarked brand name and is used in building products.

    The nice thing about this shift is that it is not merely based on efforts to reduce waste and other negative impacts business has on the natural environment and the requisite consumer backlash, but also by technological advancements. These paper cups are now just as, if not more, effective as polystyrene at holding and keeping hot the complicated coffee drink of your choice, so consumers don't have to lower their expectations. The foam stuff is not biodegradable at all and does not have the reusability properties of the plastic bag, so it is likely to regain its position in the beverage industry due to environmental concerns. And consumers who are concerned about the environment can rejoice about that!

  • Nielsen Ratings Outdated?

    Everyone has heard of the Nielsen Ratings, the venerated and dominant industry standard for measuring the sizes of TV audiences, but it appears that there are new threats in the marketplace as well as some questions as to the contemporary relevance of Nielsen's approach to measuring audiences. The current system relies on sampling viewing activity at 20,000 U.S. households, and these numbers have always been used to determine the cost of advertising during programs as well as a show's ultimate viability and survival. Tens of billions of dollars are riding on a system that has been largely unchanged for quite some time.

    The threat? NBC, instead of using Nielsen for the last winter Olympic games, decided instead to go with comScore, Inc., a company better known for tracking digital media. This was a very big move and may be a harbringer for things to come. And with TV viewing behavior now moving among multiple devices, it makes sense that Nielsen would eventually have to address this growing area if the company wishes to remain relevant. It wouldn't really take much effort to do this, as perhaps Nielsen could acquire a young upstart that already has the technology, rather than developing it itself. It is estimated that Nielsen might be underestimating audiences by as much as 10-20%, and these numbers can be significant in the battle for advertising dollars. Let's see how long it takes for Nielsen to wake up and smell the technology, and we can only hope that it won't use RadioShack, JC Penney, Kodak, and other marketers who have suffered from myopia as role models for its strategy.

  • Southwest and Growing Pains

    Can you remember when Southwest Airlines was number one in customer satisfaction? Can you remember when the airline was the only one that was profitable? And you certainly remember that  fairly recently the airline stepped out and refused to nickel and dime customers on things like baggage and food service items, offering a more customer-centric option for air travel. Hurray for Southwest! Well, these days are apparently over.

     

     

    I was shocked to see just how far the airline has fallen across a variety of measures. The airline is now middle of the pack in almost every category (on time departures, cancelled flights. lost luggae, damaged bags, etc.), but there is evidence that much of this may be due to the side effects of growth rather than a lapse in service. High fuel costs over the past several years have forced Southwest to prefer a strategy that features more connections and longer flights to larger airports, which are very prone to delay. And its low fares aren't quite so low these days, as the average one way fare has increased by 21% over the past five years. Plus, since Southwest prefers to bundle services together under one price, the fare appears to be comparatively higher than it really is to consumers that lack savvy. The "a la carte" approach that all of the other airlines now prefer allows for opening price points to appear much lower than they will be when the consumer adds the cost of luggage, snacks, etc. The strategy, once so effective as a differentiator, may actually be burting Southwest at this point since Americans are notoriously poor at math.

    What to do? Ride out the storm and figure out ways to improve service. The changes happening are industry-wide, and Southwest has little choice but to continue to differentiate on price and service, since re-positioning can be an even more expensive and risky proposition. The trouble with this strategy is that they actually have to deliver.

     

  • Coke Doubles Down

    Yep. Another post about soft drinks. But I have no choice this time because the news is simply too interesting to ignore. We know from previous posts that for many reasons, the soft drink category has been contracting for well over a decade. Coke is particularly hard hit because it gets three quarters of its total revenue from the Coke brand, unlike Pepsi which is much more diversified and owns many different brands. Pepsi appears well-positioned for the future. So it makes perfect sense that Coke would recognize that the market has changed and it would shift resources away from the flagship brand and towards acquiring brands in growth categories. Surely this is what a prudent, mature company would do with regard to a product in the decline stage of the product life cycle. But that's not what Coke's CEO says they are going to do.

    Instead of recognizing reality, the company will instead embrace hubris and will rather recklessly pump more money into the brand. The CEO's statement says it all, "Coca-Cola remains magical. We need to work even harder to enhance the romance of the brand in every corner of the world". Unfortunately working harder and using magic will not change the dynamics of the market and the various industries that serve it, but global growth might be possible for the sugary, carbonated beverage. Resources should be concentrated there because sustained growth here in the U.S. is highly unlikely. And so this strategy is likely to be a huge mistake, and might cost some high level people their jobs. Any gains made through an expensive advertising blitz will likely be at the expense of market share currently held by Pepsi and Dr. Pepper, so Coke would be better served by recognizing a declining product and product category, reducing resource allocation towards the brand, and moving on to less carbonated and sugary pastures.

  • Casinos Hit Hard Times

    It seems that The Great Recession's negative effects simply won't go away. Economic recovery has been very slow, job and income growth has been virtually nil, and there is a very good likelihood that consumer buying patterns may have shifted permanently. Even casinos are feeling the pinch, and the industry is ripe for some serious downsizing.

    Consumer demand for gambling has been brisk, reaching $38 billion this year, but growth has slowed considerably over the past six years. Mississippi, for example, saw revenue decrease from $1.2 billion in 2006 to $738 million, according to BusinessWeek. As a result, the largest casino, operated by Harrah's will close its doors, and it certainly wont be the last to do so. What's happening here?

    Aside from the usual suspect, the economy, there are two other emerging trends that suggest a major downsizing for the industry. One is the over-saturation of the market. There are too many casinos for too few customers, and the weaker ones must be culled from the herd eventually. The other threat, one that is potentially more long-term and therefore scarier in nature, is the proliferation of online gambling, which may eventually be legalized here in the U.S. as has successfully been done in Canada. That means fewer people physically going to the casino. And where have we heard this story before? So many industries, from spectator sports to brick-and-mortar retail, are affected as consumer behavior moves further and further online.

  • Yahoo Seeing What Sticks

    It seems that Yahoo may ultimately be destined for the scrapheap of former market leaders that couldn't keep up with the Zeitgeist. Who needs Yahoo when you have Google and Bing, among many others? After the high-profile hiring of a very young, rather inexperienced chief executive two years ago (she was 33), the former market leader has failed to gain any traction in the world of online advertising, which is dominated by Google and Facebook. In the absence of success in that particular vein, Yahoo must now turn to online video content to help turn around its fortunes.

    The TV industry has become rather fragmented of late as consumer habits have shifted and online distribution models have emerged. It's not that people aren't watching as much TV, it's just that they are doing it on a variety of different devices, and so marketers must shift strategy and tactics to address these trends. Facebook was a bit late to the online advertising game, but due to its dominance in social media, the company was able to recapture lost ground very rapidly. So what about Yahoo?

    By offering high quality video programming such as episodes of Saturday Night Live, Yahoo expects to get users to spend more time on its site so that more non search-related advertising revenue can be generated. Marketers are currently working on original content, such as what we are seeing with Amazon and Netflix, and will continue to seek lucratice licensing deals with outside content providers in an effort to regain cultural relevance. Indeed Yahoo has produced original series in the past but has failed to find a winning show thus far. The company recently hired ex-TV anchor Katie Couric, whose own latest show was canceled, and is in talks to make a $300 million purchase of News Distribution Network, an online video service provider, to help speed things up. Will it work?

    In a word...no. It's too little, too late for Yahoo. Banking on the possibility of finding a hit show in a growing sea of highly variable and questionable content is not a sound marketing strategy in my view, but it's hard to imagine what else the company can do to grow. Online video is just getting off the ground, so perhaps Yahoo can still turn things around. But to realize that possibility, I'm afraid that it will need a much more experienced, entrepreneurial, and dynamic leader to make it happen. And a better marketing plan.

  • So Much (More) Sales Promotion

    In the last column, I briefly discussed the potential pitfalls of overusing sales promotion as a marketing technique, so I thought it would be poignant to provide some reasons behind the proliferation of discounting and other methods.

    One such reason is simply competitive in nature. When a market leader does something, others tend to follow suit, and the result can be a game of retailer one-upmanship. The other perhaps more compelling is reason is more disturbing to marketers because it involves a trend in consumer behavior. But it isn't only the retailer that takes a hit. In the wake of the financial crisis and Great Recession, consumers cut their spending, in many cases trading down to lower tier brands, including switching to many store brands. Unfortunately for Proctor and Gamble, Colgate-Palmolive and other consumer packaged goods providers, this means less revenue and more sales promotion.

    For some categories such as toilet paper, soda, and potato chips, a full 50% of all purchases involve a discount of some kind. This seems like far too many for a sustainable business model. many consumers have eschewed brand loyalty to wait for the inevitable sale prices, which is certainly not what marketers want in the long run. When will it stop? Not until the economy truly turns around, and consumers gain more confidence and open their wallets. We might have to hope for more change before that happens. In the meantime, consumers are happy to do the math and marketers are forced to oblige.

  • So Much Sales Promotion

    Sales promotion, defined as a short-term offer of value often used to elicit a response, can be an excellent tool for marketers. For instance, coupons and samples stimulate purchase while sweepstakes and contests get us names for our database and future direct marketing activities. Others, like giveaways at baseball games and rewards cards reinforce loyal purchase behavior. But a valid argument can be made that over the past decade, this particular element of promotion has become rather trite.

    As a rule, marketers don't like to rely on sales promotions since they erode profit margins and exacerbate expensive price wars among competitors. Consumers love them because they like to feel like they are getting a deal, even when they are not really getting much of a deal. There is a great deal of evidence, for example, that most goods are more expensive around the holidays despite all of the heavy sales promotion that goes on. It seems that prices are elevated in advance throughout the supply chain in order to ensure some net income for companies.

    The other main problem with an over-reliance on this highly effective technique is that consumers can get too accustomed to the promotions, particularly with regard to price--off deals and coupons. If overused, sales promotion can make it so that customers refuse to buy the product without a coupon, or even worse, when stores just go ahead and honor a coupon that the customer doesn't even have. Bed, Bath & Beyond comes to mind here. It seems that customers can have a hard time paying the "real" price once the promotion is over.

    When are sales promotions most effectively used? In my experience, new product introductions and short-term, competition driven marketing programs are most effective with tactics like samples, coupons, and other deals, and programs that reward loyal customer behavior are particularly useful since it makes sense to spend extra dough keeping existing customers happy. When used sparingly and tastefully, sales promotion is a very effective marketing tool.

     

  • Another Controversial Selfie

    First it was Ellen DeGeneres and the star-studded Samsung-sponsored product placement at last month's Oscars. And now Samsung is back in the spotlight enjoying even more wonderful, free publicity. This time it wasn't movie stars but Red Sox legend David Ortiz and President Obama who were involved in a high-profile selfie, and the White House in not happy with what Samsung did to leverage the event.

    It all started innocently enough when Mr. Ortiz and Obama leaned in for a photo that Ortiz wanted to take with his Samsung phone. Mr. Ortiz is a paid endorser for the brand, so it is difficult to imagine him using any other phone, so the likelihood that this was all a Samsung-planned product placement is very, very slim. But there is little doubt the Ortiz thought that such an act might bring him added goodwill with his corporate partner. Either way, it happened.

    The problem is that Samsung, never one to waste a good opportunity, immediately Tweeted the photo to, well, everyone. It didn't require any planning, just a rapid response by a savvy marketer. How hard is it to Tweet something? Nevertheless, this is considered a marketing activity, and as such, Mr. Obama would have to give his permission to a marketer to use his likeness in an attempt to market a good or service. Since he did not do so, and probably should not do so in his capacity as President of the United States, Samsung should not have done the deed.

    But as they say, sometimes it is easier to ask for forgiveness than it is to ask for permission. Samsung will likely apologize and should suffer no consequences other than a promise never to do such a thing again. Think of all the free publicity that the entire act, however unintentional on the part of Mr. Ortiz or reactionary on the part of Samsung, has generated for the brand. But if this had happened to Mr. Ortiz (as an unpaid endorser), he would rightly complain that he was not paid for any endorsement and would demand restitution. Can the President do this too? Unlikely. And until there is legislation enacted that levies fines and other punishment for unauthorized use of the likeness, there is little doubt that other brands will consider taking similar risks.

  • A Farewell to Dave

    I remember when a classmate returned from a trip to New York with her famous producer father all decked out in David Letterman gear. The year was 1982, and I was in 6th grade with no idea that its host, David Letterman, would enjoy a 32-year run and become one of the most prolific TV personalities in history.

    The late night TV menu is currently in a state of flux with the recent retirement of Jay Leno, another iconic personality. As of 2015, Mr. Letterman will be the next to cede the chair to a more demographically pleasing (read younger) host in an attempt to attract younger viewers without alienating current viewers, a neat trick that Jimmy Fallon is working on as we speak. But who will replace Dave? And what will Paul Shafer do for a living?

    No one knows, but we can be sure that the next eight months will be quite the farewell tour, one of Derek Jeter-like proportions. I think that Chelsea Handler, a very funny and likeable comedian who has hosted a talk show in E for many years and has recenelty announced she will be leaving the show, would be a good candidate. Her brand of humor, however, might be a bit too ribald for network television, so she would have to really tone it down. If she's willing to do this, we just might see a female host in the near future. Marketers at the network are certainly concerned about the departure of Mr. Letterman, but an astute marketer could see this as an opportunity to actually grow the program's viewership by hiring someone with more contemporary appeal. Viewership and ad revenues for all late night programs have been falling over the past several years due to the fragmentation of the media market, so change might not be such a bad thing. In the meantime, I will certainly be tuning in more often over the next eight months to see what happens, and I'm sure I won't be the only one. At least this probable spike in viewership should make the network smile while it is making this crucial marketing decision.

  • The NCAA's Dry Tournament

    The NCAA is in the news a lot these days and not all of it is due to the annual national distraction known as March Madness. The lawsuit against the organization regarding the proposed payment of athletes for services rendered is well known, and now there is growing pushback among fans regarding the rather draconian rule against serving alcohol at tournament games. This rule apllies at all NCAA levels, and for years the NCAA has pressured universities to forbid the sale of booze during the regular season as well. So unless you are in a special suite or manage to smuggle in a flask of something, it's 48 ounces of sugary soda for you!.

    Clearly the NCAA has good intentions. Keeping beer away from college students is probably a good idea, but the fact of the matter is that very few of the attendees will be of student age. The event is far too pricey for most students, and the timing after spring break isn't exactly perfect. So why deny adult American basketball fans their God-given right to consume alcoholic beverages along with their nachos and arena dogs?

    Apparently some universities are asking themselves this same question, and it appears that the tide is beginning to turn as schools such as Texas have resumed vending operations. And there is something to be said for the fact that the rule has had the unintended side effect of encouraging binge drinking in the parking lot prior to the contest, which is not a good thing. The league should reconsider this ban and should also respect the right for universities and colleges to set their own standards. Consumers want the beer, and schools can make money from the sales, and inside the stadium at least the schools can control the distribution of the stuff.

    There is growing evidence that game attendance is down partly due to the unavailability of alcohol. There is scant evidence that the ban has had any positive effect on the in-game experience, and the whole thing paints the NCAA as an organization that likes to bully and micro manage its members. This is a brand perception that this organization can ill afford to have. 

  • Giving Them Something To Yelp About!

    The lawsuits are getting hard to ignore. Pretty much anyone can say pretty much anything these days online dspite the fact that we have anti-slander and anti-libel legislation on the books. For whatever reason, it doesn't appear that these rules yet apply to the lawless land of the Internet. And to add to the problem, most of what happens online is anonymous, and so the person or company who is being disparaged doesn't even know who made the comment. This is precisely the problem.

    Sites like Yelp, which were designed to provide real comments from real people so that consumers can make more informed purchasing decisions, simply cannot verify the identity of the person posting, and this can become a major problem when brand reputations are at stake. The victim sometimes has little recourse but to file against the website in question, and the result has been a series of lawsuits. As a result, some marketers are now putting "non-disparagement clauses" into their contracts, and consumers who violate these terms can be held liable even if their complaints prove to be 100% true. Harsh!

    Yet in 2013, Yelp had more than 53 million reviews on its site, almost double the number from 2012, so this sort of service is obviously big and growing business. It is unclear whether this sort of contract will hold up in court, but it is clear that much of the anonymity will eventually have be removed from these reviews at the very least. We can't have competitors writing disparaging things about companies under the guise of consumers, for instance, which is a practice that happens rather often. Also, folks tend to temper their opinions when they aren't anonymous. And remember that the reviews on sites such as these are considered "outliers" in statistics, and so the conclusions reached from such data are not based on actual statistical analysis. This doesn't mean that the opinions on the site are invalid, only that they should be taken with many grains of salt, and legislation to protect the businesses is on the horizon.