Darrin C. Duber-Smith
Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, Inc., and senior lecturer at the Metropolitan State University of Denver’s College of Business. He has almost 30 years of specialized expertise in the marketing and management profession including extensive experience in working with natural, organic, and green/sustainable products and services. He was a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market/industry model and was leader of the first U.S. industry task force that helped frame the Natural Products Association’s definition of natural (c. 2005). He has published over 80 articles in trade publications and has presented at over 50 executive-level events during the past 15 years. A frequent media contributor and recipient of The Wall Street Journal’s In-Education Distinguished Professor Award in 2009 and WSJ’s Top 125 Professors Award in 2014, Mr. Duber-Smith is author of Cengage Learning’s “KnowNow! Marketing” blog at http://community.cengage.com/GECResource2/info/b/marketing/. He can be reached at DuberSmith@GreenMarketing.net or firstname.lastname@example.org.
Yum Brands, parent of Pizza Hut and KFC, has enjoyed a few decades of outstanding revenue growth as it, and other U.S. fast food chains, penetrated vastly under-served overseas markets to meet shareholder expectations of revenue growth. Once these foreign governments allowed them to expand into their countries, it seemed that consumers couldn't get enough of American fast food. This has been especially true in China, a primary source of market growth for all kinds of brands such as Apple, Wal-Mart, McDonald's and so many others seeking growth beyond their saturated domestic markets. But as growth has slowed in the U.S., it appears that things are changing internationally as well.
That's the trouble with success. It's tough to stay on top as tastes shift with new generations of consumers and as globalization standardizes so much of what we all buy. Yum's sales are down 9% from the previous year, and it is difficult to see how it, and many other faltering American brands, can recover their industry dominance in the face of so much choice. Pizza Hut has even tried adding authentic Chinese ingredients such as squid to its pizza in the past, but too many Chinese consumers have perceived these types of offerings as lacking in authenticity. American fast food was what they wanted, and now apparently they are tiring of it. Adding squid and other ingredients that appeal to regional tastes to American dishes can only go so far.
But perhaps these iconic brands can turn things around after all. since there is no reason that the company can't introduce new brands in China. A more upscale Chinese consumer might demand a more upscale menu, and there is no reason that Yum cannot address this need with an exciting new restaurant format. Plus China's growth is beginning to slow which suggests that Chinese purse strings will eventually have to be tightened. Perhaps there is hope for pizza and fried chicken after all. Let's see what happens.
Never one to shy away from controversy, Chipotle CEO Steve Ells has taken a shot at Big Agriculture in announcing that the burrito-maker will phase out ingredients that have been genetically-modified (GMO's). Most of the products we consume contain some form of GMO and although some countries in Europe have chosen to outlaw them, there is absolutely zero scientific evidence of any harmful effects to human health. So why the major supply chain shift?
Corporate activism is a big reason, and the publicity generated from the move can't hurt either. But instead of saying that Chipotle is making the move to further differentiate the brand form competitors and meet the needs of consumers who don't want genetically-modified food (a good marketing answer!), he said on CNN Money, "They say these ingredients are safe, but I think we all know we'd rather have food that doesn't contain them." Really? I guess "they" means those pesky scientists and "we" must mean the majority of the population. So far, GMO labeling initiatives have failed to gain traction at the state level, but that doesn't mean that the activists won't stop trying. Which leaves it up to individual companies to make decisions.
The fact of the matter is that the use of GMO's results in higher crop yields making it less expensive to feed growing numbers of the world's people. This might not be a big deal in affluent Boulder, Colorado, but the idea certainly plays well in Africa and most of the rest of the world. Meanwhile, the USDA happens to already have a "Certified Organic" classification for ingredients and products, and by definition, organic ingredients, among many other strict rules, can't be genetically modified. So why not switch to Certified Organic, a government regulated, 20 year-old program? Who will verify that Chipotle's products are GMO-free? The company desires to target Millennials who according to much consumer research are very concerned with what they eat. Despite 40 plus years of marketing, "certified organic" is not a term with which they are very familiar (and, besides, the ingredients are notoriously hard to source in large quantities as Mr. Ells knows); but mention "locally-grown" or "GMO-free" and you might get the attention of even the most distracted hipster. But unfortunately for this over-sized but under 35 crowd, far too many people are not nearly as concerned with how much they eat (or drink) as they are with whether any native habitats have been compromised in the process. Food production is a messy business. And remember that the obesity epidemic, although no longer a chic media focus, is still the number one health problem we face. I guess it's OK to snarf down a 1,000-calorie burrito bowl with extra sour cream and guac as long as those ingredients aren't genetically modified. And if certified organic is too difficult for Chipotle and other large companies to pull off, it will be interesting to see whether or not sourcing GMO-free ingredients will be a prohibitively difficult task as well. Cause-related marketing and sustainability are nice strategies, but Mr. Ells could have spared us the science-denying speculation and sanctimonious saving-the-world-one-burrito-at-a-time corporate activism. In the meantime, Mr. Ells wants you to enjoy that loaded burrito bowl!
Technology replaces labor when it becomes cheap enough to do so. Once labor becomes too expensive for an organization, which is largely a product of high wages, benefits, payroll taxes, and other employment costs, available technology can become cheap by comparison. Indeed we have seen ATM's replace most tellers, touch-screen kiosks replace most airline customer service agents, as well as the foundation of a major change in the hospitality industry, particularly food service. Agriculture is the latest area to experience a major shift in technology that could change the way crops are picked, which in turn, can affect the demand for labor in an often challenging industry that often relies on seasonal labor. Enter the Agrobot.
"Agribot" would possibly have been a better name for the product, since this robot is probably not very aggressive, but nevertheless for $100,00 The Agrobot can gently pluck fruit that is ripe and leave behind the fruit that has yet to ripen, among other functions. That is one heck of an invention indeed, and although producers must incur maintenance costs, it is not difficult to imagine that such a device could easily replace millions of workers over time, while at the same time making operations much more efficient. Partly driven by a perennial shortfall in farmhands and reports of unpicked crops rotting in the fields of America, but also by the rising cost of labor in America, this invention joins an existing array of productivity-enhancing, and labor-saving inventions such as machines that can plant seedlings, harvest lettuce, and transplant roses. Larger growers may have an initial advantage of over smaller ones since they have the capital to invest in this sort of equipment on a large scale, but the increase in demand is likely to drive down Agrobot production costs as more units are produced and competitors enter the market without violating existing Agrobot patents. Hopefully competitors can pull this off in a way that couldn't be done in the era of Dyson's vacuum dominance. The result of this cycle of competition spurring investment in R&D which in turn spurs more competition, will be a less expensive product that smaller growers can afford. And then we can begin to say goodbye to some more of the backbreaking labor that characterizes so many of the menial jobs that few people really want to perform these days.
In a market environment where record numbers of consumers are beginning to pay attention to what is actually in the food they buy, record numbers of marketers are also paying attention to what they are putting in the foods. Almost gone are the days of artificial flavors, colors, and preservatives, as chemists have become used to working with naturally derived and processed ingredients over the past few decades. Diet Pepsi is the latest to make such a move, and has announced that it will replace aspartame, a zero-calorie artificial sweetener that is perceived (perhaps wrongfully) as unhealthful, with a blend of sucralose and acesulfane potassium. Is that really better?
It looks like marketers at Pepsi are under the impression (via years of studies) that the new sweeteners (which probably aren't "natural") will somehow help change the fortunes of a category that has been in decline for many years. Will it be enough? Probably not. The new ingredients don't sound any more healthful than the old ingredient, and any move is unlikely to to turn things around for Pepsi, Coke, or any other purveyor of sodas, diet or otherwise. And the change in ingredients will almost surely change the taste of the product, which is always a risky proposition as Coca-Cola found out with its "new Coke" debacle). This is a category in decline, and Pepsi's moves, scheduled for August, are unlikely to do much to turn things around, although one might argue that simply standing around watching the market shrink is also a poor strategy. It will be interesting to see how the market receives these changes as well as whether or not competitors such as Coke and Dr. Pepper will follow suit with their own reformulation efforts..
Harley Davidson seems to have it all--cool bikes, brand awareness, brand equity, market leadership. But what it doesn't have is an effective way to get new customers. After decades of being the motorcycle brand of choice for the Depression-era and Baby Boomer generations, the brand began to look internationally for growth during the 90's. This worked for a while, as the iconic, quintessential American brand enjoyed much success abroad. But Generation X'ers (those born between 1964 and 1980) haven't demonstrated much interest in the pricey bikes, while the perennially-broke, younger Millennial crowd seems to eschew buying "things" altogether. What's a brand manager to do in such a business environment?
Indeed, it is difficult to see how Harley is going to find growth amidst falling demand for its core product offering. The company doesn't do much traditional advertising, and its "guerrilla marketing" efforts haven't generated much buzz.. Marketers have identified the brand's "outreach customers", which include women, Hispanic, African-Americans, and white men between 18-34, which in all seriousness is pretty much everyone to whom the brand does NOT currently appeal. Just how marketers expect to reach this rather broad group of non-motorcycle riders remains to be seen. And it also remains to be seen whether or not the company can in effect "create demand" for a flagging product category. It is likely that the brand will have to diversify into a new set of product offerings, leveraging the brand equity it has built over the years, but in fact offering products that customers actually want and need.
Much has been written about the traditional television "bundle", wherein consumers are forced by content providers to pay for channels they do not want. This phenomenon has been the primary cause of the skyrocketing pay TV prices consumers have experienced over the past decade or so, as well as exacerbating the massive consumer shift away from traditional pay TV and towards less expensive content on the internet. Indeed the "great unbundling" has begun with providers beginning to offer more customized (and cheaper packages) of TV content over the internet. Verizon is the latest to announce a product that offers customers more choice, but one that is almost certain to cut into the bottom lines of ESPN and other powerful content providers.
Verizon has announced a basic online package that does not include ESPN, but will offer sports packages which can be customized to include a number of sports-related offerings. Sounds great right? Well, ESPN will soon be joined by others in challenging the legality of Verizon (and others) offering such packages, saying that current legal agreements do not authorize such products. Oh balderdash! Regulatory agencies, although traditionally slow to act when consumers are being bullied by powerful corporations, won't sit back for long as content providers overcharge their customers, discourage competition, and make it generally difficult for innovation to occur in the industry. The bottom line is that consumers are best served when they have choices, and not when they are held hostage by big media firms (or airlines for that matter!). TV content is indeed migrating onto the internet and there isn't anything Disney, Time Warner or any other large media entity can do about it. Fighting the market's natural progression will only end in pain for everyone involved. Perhaps regulators should step in right now and take steps so we can avoid this inevitable food fight.
It is no secret that soccer is slowly eclipsing many other spectator sports in terms of popularity, a phenomenon driven by youth participation, increasing adult interest, and of course the growing top-level U.S. professional league, Major League Soccer (MLS). After signing a major TV deal in the United States, the league has also made inroads internationally, characterized by four-year multimedia deals recently signed with Sky Sports and Eurosport to enhance the international appeal of the league. And MLS isn't expected to stop there, with several other possible international arrangements still on the table. And this is a league that many still consider vastly inferior to Europe's A teams. Does it really have much international appeal? Is this where MLS marketers should be focusing their efforts?
Never underestimate the European (and perhaps the global) appetite for soccer. Indeed Eurosport reports that in just the first three weeks of the season, 8 million viewers have tuned in to watch the best America has to offer, an audience which surprisingly outdrew viewership for all other Spanish teams except FC Barcelona and Real Madrid, teams with massive global appeal. And MLS continues to draw better players (many of whom would rather live in Seattle than Dresden) every year as well as sponsors with deeper pockets, so there seems to be no end in sight for the growth prospects of this league, and the sport as a whole. But remember that we Americans have quite a few more choices than do folks in other countries when it comes to spectator sports, and that not too long ago experts were touting Lacrosse as the next biggest thing. The growth of soccer in the U.S. has been slow and steady, and interest has always spiked around World Cup time only to drop back to previous levels of apathy. But somehow this time it seems different. Soccer will continue to chip away at the American entertainment budget, and will eventually take its inevitable and rightful place as one of America's most popular sports.
It seems remarkable that H.J. Heinz, after 140 years of selling ketchup and billions of dollars worth of other consumable packaged goods, has finally decided that it wants to sell some mustard in retail stores. The benefits of tapping into this $400 million U.S. market are obvious. Although the company now owns a variety of business units and is poised to merge with Kraft to create a $28 billion conglomerate, it has always been best known for its flagship ketchup (not "catsup", which is clearly some kind of inferior incarnation of iconic American dressing) and for some reason, marketers up until now have been reticent to introduce the obvious companion product, mustard.
Adding a mustard to the product mix is not exactly a leap in logic, after all. Aside from the obvious differences in ingredient sourcing and formulation, the products can essentially be sold side by side on the self space that Heinz (and now Kraft) currently occupy. A new product introduction of this sort by a company with excellent distribution is not a difficult task, requiring only financial resources, and clearly Heinz is looking for further growth in condiments beyond the 60% it currently owns of the $750 million ketchup market. Heinz will most likely merchandise the items both separately and a bundled package. The company has already launched a funny comparative TV ad campaign, poking fun at French's and other mustard brands, and will sruely tie in all sorts of sales promotions, internet marketing, and public relations efforts to drive sales. The new mustard, it seems, is sure to steal market share from everyone, especially French's (which has 30% of the U.S. market). Just because a market isn't growing, it doesn't mean that there isn't opportunity to leverage an existing brand with a new product so that a powerful brand can take its rightful share of a market it had neglected until recently. It's never too late to get into the game!
Remember way back when Facebook was just a hangout for college students and My Space was the dominant vehicle for social networking? Me neither. All kidding aside, the largely Mark Zuckerburg-developed juggernaut has become one of the more profitable revenue models on the internet. Obviously much of this revenue is advertising-based, particularly the mobile variety, which in turn is based on user traffic and continued user growth. All of this Facebook has in spades! But the growth, as well as the site's user base, is no longer in the U.S. as was once the case, but rather globally-based. Consider the following:
U.S./Canada 208 million users, 8% growth
Asia-Pacific 449 million users, 51% growth
Europe 301 million users, 15% growth
Rest of World 436 million, 43% growth
With data like these, it is not difficult to understand why Facebook has diverted much of its marketing muscle to address the rising demand in emerging markets. The company must be sure to cater to the North Americans, however, lest it fall prey to an emerging start-up in the same way that My Space has done. It is important to note that a very important metric "average revenue per user" is $9 for the North Americans versus $1.27 per user in the Asia-Pacific, so it isn't just the number of users that is important, but what they are each worth to the organization. And ignoring existing customers in favor of acquiring new ones is seldom effective as a marketing strategy. Facebook best be wary. It ain't easy being king.
It turns out the answer, at least for the producers of NBC's "Nightly News", is "plenty". Indeed the absence of anchor Brian Williams, suspended for six months without pay in a very highly publicized inquiry into some exaggerations he made about his past journalistic exploits, is being felt, as the show has already ceded its #1 position to rival ABC's "World News Tonight". This also represents the first drop in viewers for the show since 2009.
Indeed "star power" is important in the world of entertainment, and Mr. Williams had, over the years, developed quite the television persona appearing on dozens of programs. His replacement, Lester Holt, while a highly qualified journalist quite frankly is not Brian Williams. And so viewers are beginning to drop off, which is bad timing for NBC whose "Today Show" has also fallen behind an ABC competing program "Good Morning America". And let's not even mention what 24-hour news network MSNBC has become, with viewership that lags so far behind rivals Fox News and CNN that one wonders how it is on the air at all. Remember that advertising dollars follow viewership levels. So it appears that NBC has some work to do, and don't count on Brian Williams riding back in from the sunset to save the day. Most experts don't expect him to draw the audience he did previously when he does return, let alone even resume his position as the anchor. These are trying times in the NBC kingdom. Let's see what strategies are enacted to reverse the trend.
Perhaps the biggest challenge that marketers at National Hockey League (NHL) headquarters face today is grappling with the role of fighting in a game that has traditionally encouraged the practice, but that now must now address a new zeitgeist where coping with head injuries isn't just a moral issue, but also a legal one. For now, fighting is in sort of a gray area, tolerated, and many players and core fans feel that it is a necessary part of keeping dirty teams more honest. But it is difficult to ignore the increasing litigation surrounding the issue of head injuries, and it is clear that the recent NFL settlement is only the beginning.
It is highly likely that there will be major changes to what is termed the "core product", or the action on the court, in just about every sport involving contact. Even soccer, which features high impact "headers", will not be immune to the legal onslaught as an increasing number of former players line up to get a piece of whatever legal settlements are offered. As a result of this trend, the NHL is certain to phase out the practice, which even now only exists at the minor and major league professional levels of the sport, and it is likely that those in charge of NHL product development will devise alternative ways to discourage the dirty play that fighting itself is supposed to discourage. Core fans need to start getting used to the idea. Times have changed, and the NHL must change with them.
When we think of successful movie franchises, or what many in the industry call "tent poles", most of us think of Star Wars, Lord of the Rings, Harry Potter, and other highly hyped and commercially developed products whose story lines last many years. Most of us probably don't think of Fast and Furious as a member of that exalted group, and some of us are only vaguely aware of its existence. But the fact that Fast and Furious 7 has already made $252.5 million and sits at number one this week makes us aware at how much power this franchise actually has. And how many more movies can they produce? If producers can find a new star (lead actor Paul Walker died during filming), then it appears that the franchise has staying power..
Granted, the popularity of this most recent incarnation might have more to do with a lack of decent-quality competition than anything else, since the only film even close is "Cinderella" at $180.8 million and there aren't too many other well-known releases at present. "Furious" does have global appeal, especially in Asia. And the 14 year-old franchise has several more weeks in the theaters as well as great potential in the secondary-release streaming/DVD market. " Furious Seven" has already out-grossed each of the previous six total revenue counts. That is noteworthy indeed.
In a move that seems to address the public's overall perception of low product quality, McDonald's is taking a page out of the playbook of yesteryear and will introduce a premium sirloin burger for a limited time. Sound familiar? Indeed, in mid-2013 marketers pulled its premium Angus Third Pounder from its menu, and let us not forget the ill-fated Big & Tasty, which also failed many years ago. So what's different this time?
As far as I can tell, nothing. The new burgers will be priced at around $5 which is only about 40 cents higher than a Big Mac, so the price point should be low enough for most consumers to handle. Clearly, McDonald''s wants to be seen as a place where people can get a good burger, but its current product mix doesn't deliver on that promise. So, enter the sirloin burger. Today's consumer can get a tasty burger from In-N-Out, Shake Shack, Smashburger, or any number of places for about the same money, so how does McDonald's expect to compete in this category? It really does look like marketers are at their wit's end at the Oak Brook, Illinois headquarters. Were lessons learned from previous premium introductions? Have market conditions changed so as to suggest that marketers can make it work this time around? Is a name like "Sirloin Third Pound Burger" catchy enough to help the product become a permanent addition to an already unwieldy menu? McDonald's has talked about paring down its menu to improve service quality, but it seems that marketers are still focused on testing new products. Let's see what happens.
Known for its Swedish-designed and manufactured flat-pack furniture and a store so large you can almost see it from space (not really) it is possible that IKEA is equally well-known for for its cafeteria and Swedish meatballs. They are so popular that the company's booth at a major food and wine festival in Denver last year was constantly packed leaving more than a handful of four-star chefs scratching their heads. Indeed, food service accounts for more than 5% overall revenue, or $1.5 billion, which is quite astounding when one considers how much furniture the company sells. And $1.5 billion represents a lot of meatballs. So how does IKEA improve upon perfection? By adding to the product mix, of course.
Introducing IKEA Veggie Balls, which marketers say is a product introduction meant to appeal to a wider audience and help the company further its sustainability efforts. IKEA claims that with its plant-based composition of corn, kale, carrots and other vegetables, the veggie product has a carbon footprint 1/30th that of its meatball product. Well, that may or may not be entirely true, but there is no doubt that the market for vegetarian products in general is robust (almost $1 billion in the U.K. alone), and with IKEA launching stores in India (a country that consumes very little beef), this looks like an excellent strategy. The trick, of course, will be getting the vegetarian version to taste as good as the meat version, a challenge all makers of veggie products have faced for many years. But if that doesn't work, IKEA is introducing Chicken Balls as well to hedge its bets. It is indeed fun watching such a creative organization succeed in so many ways.
Consumer tastes for adult beverages are in the midst of a major shift away from the preferences over past decades. Growth in the large-batch beer market, after taking a beating from the wine category in the 80's and 90's, has been completely replaced by growth in the craft beer and specialty spirits markets. And American whiskey, bourbon in particular, has now trumped scotch as the whiskey of choice among consumers of alcoholic beverages in this $300 billion global market.
Scotch exports were almost $6 billion last year, down 7% of the previous year, and almost all of this can be attributed to the rise of demand for whiskey made in America. Whiskey tax revenue collection is up 9.6% while that of scotch remained flat last year. No one knows why this is happening, but it is indeed global in scale. In fact, a Japanese company just purchased Jim Beam. What this does mean, however, is the inevitable rise in price for a bottle of American whiskey. Bourbon, which is made in Kentucky, now averages $1748 a bottle (versus scotch at $24.09 per bottle), but since it is aged for over a decade, and few people predicted that current demand would be this great, one would expect the retail price to rise dramatically due to supply issues. One would also expect the price point for a bottle of scotch to drop accordingly, and it's not just scotch makers that should be worried. Rum sales are down 1.5% and vodka increased only 1.5% versus the growth of bourbon and other American whiskeys'at 7% from the year before. Indeed this may be just a passing fad, but it could also be a major shift in consumer behavior as we have witnessed in the past with regard to wine and more recently craft beer. But if the rise in distilleries popping up all over the United states is any indication however, this trend is here to stay.
For decades, demand for certified organic ingredients has outstripped supply. But despite the obvious benefits of growing such profitable ingredients, most farmers have chosen to keep on doing what they've always been doing instead of moving along with the times. Granted, the conversion of a field or a ranch to USDA Organic Certified takes time and costs money, but with the market growing as it has been growing for the past 40 years, it is difficult to justify the lack of market orientation on the supply side of consumer products. The number of organic farms and ranches in the U.S. has grown over the past several years, certainly, but there aren't nearly nearly enough of them to meet the demand for certified organic personal care, nutritional supplement, food, and beverage products. In some cases marketers have been forced to replace organic ingredients with natural ones due to lack of availability. What is an organic branded product manufacturer to do?
The answer is vertical integration, and to be fair, manufacturers haven't exactly been quick on the draw either. Recently, however, a number of organic food purveyors in particular have been taking steps to increase supply such as direct investment in farms, financing farmers, offering technical training, and other incentives to recruit organic growers. This move has been a long time coming, and it's a shame that the growth of such an important industry has been hampered by supply issues. USDA Organic standards, including eschewing synthetic herbicides and pesticides in crops as well as hormones and antibiotics in livestock, among many other rules, are very clearly outlined under the National Organic Program, and all but the most adventuresome farmers have been reticent until recently to leap into this uncharted territory. But times have changed and the supply chain must change with them. Perhaps we will soon see yet another surge in this rapidly growing segment due to these developments. If that happens, expect the volume of organic ingredients (and thus products) to increase, which will cause prices to finally come down and inevitably open the industry up to a broader consumer base. Amen to that.
Sporty. That's the word marketing executives used at the recent New York International Auto Show to describe the re-engineered Honda Civic, which up until its latest iteration has been a rather nondescript vehicle. Perhaps inspired by Buick and its "That Doesn't Look Like A Buick" reinvention strategy, Honda has created a next generation vehicle with dramatic creases, an elongated hood, 20-inch wheels, LED taillights, a cool-looking front grille, as well as good-sized rear spoiler. In short, it really looks like a sports car.
And with the new Mad Max sequel movie coming out (sans an elderly Mel Gibson), consumer interest in sportier cars might spike, so this move may be very well-timed. And Honda says that looks aren't everything, so it says that the Civic has been thoroughly re-engineered, and that a 1.5 liter turbo-charged option will be available in higher-end versions of the vehicle. Although Honda Civic sales have grown over the past five years, its share of market has held constant, second only to Toyota's Corolla in the compact car category. The new Civic will debut in the fall with its sedan model, followed by the coupe and then by the higher-performance version. Indeed the Civic in its three forms will offer something for everyone and should beat the pants off of the Corolla next year. Let's see what happens.
No, this is not a court case. The stakes are much higher. With recreational cannabis legal in four states and Washington DC and medical weed legal in almost 20 states, it is no small wonder that with billions in revenue on the line, some big names have entered the market. But we are not talking about Big Tobacco here. The names are even bigger. A few months ago, the family of long-dead but not forgotten reggae legend and cannabis enthusiast Bob Marley announced that it will release a brand of pot called Marley Natural sometime this year, which will be sold in stores within states that permit such commerce.
And now another advocate of the plant, country music legend and cannabis enthusiast Willie Nelson, 81, is tossing his pipe into America's newest growth industry. Indeed, "Willie's Reserve" will be sold through Nelson-branded storefronts rather than in local dispensaries and his stores will also sell products from other growers. This would be one of the first cannabis retail chains in the world and the move truly changes the landscape of this fledgling industry. Of course there is nothing stopping Willie from carrying the Marley-branded stuff or the Marley's from opening up store fronts of their own. In fact, both brands should probably become vertically integrated, like Apple. Expect more big names to emerge as the stuff becomes legal in an increasing number of states over the next few years, but for now distribution is a bit difficult since each state has its own laws and cannabis cannot cross state lines in any case.
Of course the major threat is the federal government, but the feds can just as easily just legalize the stuff nationwide, which would be a total game changer. Once a genie like this gets out of his bottle, it is virtually impossible to get him to go back in, so ultimately, it does seem that full scale legalization is what will happen eventually. Place your bets now on what promises to be a very green future for marketers of cannabis.
We know that McDonald's has struggled with both service and product quality over the past several years and, despite some strange advertising tactics, the company seems to understand its predicament. Management has been rather outspoken recently and has vowed to streamline the product mix so that service times can be improved, and has even made recent announcements regarding the use of antibiotics and preservatives, so perhaps some product reformulation is on the menu. But the news that the fast food giant is testing an all-day breakfast concept came as a bit of a surprise.
The company said in a statement that it will offer select breakfast items at certain San Diego-area stores starting next month in response to customers who have said they'd like breakfast all day long. But is this really a good idea for a company already struggling with too many products and in the midst of what some would describe as a brand identity crisis? Certainly there is little harm in conducting a test, and with Taco Bell now fighting the breakfast wars, it seems that at least extending the Egg McMuffin's availability might be a good idea. But breakfast all day? Would that improve product quality? Service quality? This is probably not where McDonald's decision-makers need to be spending their time, and it does seem like a distraction from the company's real issues. Mickey D's has bigger fish to fry.
One of the surprises of this past Superbowl advertising blitz was the ad placed by website address provider Go Daddy. It didn't feature scantily-clad celebrity endorsers like Danica Patrick, as it has always done in the past, to convince people to use the service, but rather the company ran a very straightforward advertisement with a rational, rather than emotional, appeal. The ad was boring, but it attracted attention by being just that. This begs the question, what has happened at Go Daddy?
Three words. Initial Public Offering. When a companies decides to "go public" and offer shares on a stock exchange, they often have to do a little growing up first. This is precisely what has happened at Go Daddy. But making an image transformation from Bad Boy of the Internet to an emotionally mature organizational partner that small businesses can trust may prove to be trickier than running nondescript ads on television. Go Daddy has spent many years and much treasure developing its image, and a makeover can be a risky proposition. But, the days of internet bad boy companies "sticking it to the man" are largely a thing of the past, and it is likely that this previously-successful marketing approach may have run its course. Adding new services, as the company has done, will help things along, and dare I suggest marketers consider a new logo and slogan? Why stop at the advertising? Why not complete the makeover? The months leading up to the Initial Public offering will be very interesting.
Rescued from the ashes by a change in strategy, Blackberry says that its plan to revive its flagging brand is on track. Rather than compete with Apple and Samsung in the consumer market, the company a few years ago decided to focus on mobile security software and mobile devices targeting corporate and government users. The company's market share in the consumer market is now less than one percent, and it remains to be seen if the marketplace accepts the company's new product strategy. Blackberry is betting big on a product called BES 12, which allows companies to manage Blackberrys, iPhones, and Android-powered devices used by employees on corporate networks.
Remember that Blackberry was the original smartphone pioneer and the devices have always been used primarily by businesses and business-minded people. The introduction of the iPhone made smartphones ubiquitous almost overnight in the consumer world, and Blackberry rapidly lost its edge in the business world as well as failed to address the growing consumer market. Indeed, the once-prideful Canadian company has one final chance to save itself and although revenue is still down, the growth of BES sales is very encouraging. Let's see if a turnaround of this magnitude can truly happen.