The Brand Man Speaks

Toshiba's "green" recycling effort is flawed

In an effort to help consumers dispose and recycle old electronics safely Toshiba has introduced a program that actually pays consumers for this effort.

On the surface the electronics brand is offering consumers an important opportunity that is also profitable while helping to establish Toshiba as an important environment-friendly brand.

After reading about the program in various media sources I went to the company's website to see how easy and green the process would be.

The good news is one can dispose/recycle a large variety of electronics from old DVD players and laptops to cell phones. The process to determine the value of your product is also easy although not all items you wish to get rid of will bring you cash back. Mostly items that still have some use or interest among consumers.

Once you have created your collection of returnables, you can set up your account and print postage-paid labels to use to send back your items. Upon receipt (and confirmation you sent back what you said you did and in the condition specified) you will get paid.

The problem and conflict with being truly "green"? Each item must be packaged (with very explicit instructions on how to do this) separately even if the mailing address is the same. You will not be able to bundle your items (say a bunch of your family's old cell phones) in one box to save on packaging waste. You must package each item in a separate container with its specific return information inside and on the outside of the box. Each must have its own label--which you print at home (more waste).

I think Toshiba's idea to encourage recycling of old electronics is a very good one and good for their brand but I do believe they need to revisit the return process and come up with a more environmentally friendly and efficient way to handle it.

Watching out for you everyday.

Eli

GM cuts ties with spokesperson Tiger Woods after nine years due to dire financials

GM has announced they are cutting ties with phenom golfer Tiger Woods after nine years of endorsements. Woods was earning nearly $7 million from the relationship. GM and Wood's handlers say the announcement was mutually beneficial to each party; GM needs to reserve cash and Woods wants more family time.

I never understood GM's Buick divisions deal with Tiger. It was not a believable brand effort. Buick is GM's aging brand still pulling in mostly 60 plus year olds. Tiger was supposed to dramatically make the brand more appealing to younger car buyers but it really didn't work. Buick has had one auto entry success with the Enclave SUV/Wagon but other than that, the brand is nearly dead. ( I did see a great looking Riviera concept car at the LA Auto show this week...but it may be too late to revive that marque).

Tiger seemed the wrong sports guy to be affiliated with Buick. It was so NOT him to be a Buick man---Buick is so not youthful, over the top fantastic or always poised, polished and polite---it's a cranky old brand for pete's sake.... and I always felt it was just a good money deal for Woods and one that gave senior GM execs who love golf face time with the world's greatest golfer....not a brand relationship that could help the Buick product line.

In a way this move by GM is good for both parties. GM saves cash and Tiger who doesn't need money stops hurting his image by this miss matched association. No one looks bad with this split because of the circumstances.

Tiger I am sure can find a much more suitable automotive deal now worth more money even in this weak economy he is that valuable a resource. Although, he has been out of the limelight recovering from knee surgery and thus not as valuable as he has been....but relative to other celeb endorsers he's still King.

Watching out for you everyday.

Eli

Olympian Michael Phelps signs with Subway even though he prefers McDonalds

In a brand alliance move that makes little sense, Olympian Michael Phelps has signed on to be the spokesperson for the Subway brand of fast food.

On the surface this seems like a good fit. An incredibly athletic man with great appeal among young people world-wide promoting a healthy brand of fast food. The problem? Phelps doesn't eat Subway.

Phelps touted his addiction to cheeseburgers from fat laden brand McDonald's throughout the Olympic games going as far as to say it was his primary fuel....a 10,000 a day calorie diet...mostly of McDonald's food. He was even quoted as saying he wanted to be a spokesperson for the brand. So what happened?

After Phelps took an offer to promote Kellogg's high sugar Frosted Flakes cereal many scolded him for aligning himself with a product that promotes obesity among children. That rap didn't go well with his handlers who are trying desperately to make his all-American Idol like persona blemish proof to keep his income generating ability flying high even though the Olympics are no longer in the minds of most consumers or his herculean feat.

They are spinning this deal to promote the fact that it is more appropriate for Phelps to promote healthy food for a fitness lifestyle. The problem remains his celebrity endorsement does not ring true and could be harmful to both his brand and the Subway brand. This is a case where money trumps good brand strategy and certainly undermines Phelps credibility. Are Phelps handlers too greed oriented...so desperate to make him big money given there is nothing going on between now and the next summer Olympics to keep the Phelps brand relevant to consumers? Likely.

Watching out for you everyday.

Eli

Toyota "Saved by Zero" TV ad annoying many but generating results

It appears we are facing the most dismal economic climate since the great depression with thousands being laid off daily and businesses closing or shutting down segments of their operations to stay afloat.

The consumer has pulled back their spending reins especially in the automotive sector. The US big three automakers are on the edge of a cliff on their way to falling off....unless Congress bails them out.

To reach those consumers who might still be in the market for a new car, Toyota, now the most successful auto brand in the world, has been running a TV ad in the US that is both extremely effective and physically painful to watch for many.

The campaign called "Saved by Zero" promotes that fact that Toyota is offering zero percent financing for well qualified car buyers. That in itself isn't the big deal. It is the ad itself which repeats the "saved by zero" phrase so often and so annoyingly that blogs and websites have surfaced to generate negative consumer feedback to Toyota by calling for a boycott of the brand and an end to the ads airing on TV, mostly during sporting events. To make matters worse, Toyota saturates a given TV show with this ad literally making some viewers "go out of their minds" listening to this mantra which is delivered not by a cute jingle but by an insipid repetition with some music background of the phrase.

Toyota spokespeople are enjoying the free PR and consumer uproar because the campaign has been very effective generating new floor traffic in dealerships leading to prospective sales. The value of the extra PR and media attention is worth millions and makes the ad campaign's impression that much more intrusive and extensive.

This is one of the cases where an annoying ad campaign actually does its job too well. Will it alienate consumers in the long run? Unlikely as consumers will forget this ad within a few weeks after it stops running which will be sometime in December. You can take your earplugs out very soon.

Watching out for you everyday.

Eli

Circuit City declaring bankruptcy, unable to compete against Best Buy

Circuit City, the second largest electronics retailer in the US behind Best Buy, is declaring Chapter 11 bankruptcy to try to maintain a presence through the holiday sales season.

The company had just announced it would close 20% of its stores and significantly reduce payroll by laying off employees system wide.

The Circuit City problem has been a long standing one. This electronics retail brand lost major ground to its primary competitor Best Buy a few years back when Best Buy positioned itself as the more personal, trustable and friendly electronics retailer. They made employees salaried instead of on commission, spruced up the stores, made it easier to find items and created a more "we are interested in your business" attitude.

Although Circuit City also moved to salaried employees vs. commission, it didn't deliver the news well or in a meaningful way to consumers. The stores were perceived to still be staffed by commissioned sales personnel and environment seemed more traditional electronics retailer---shark like---than a happy easy place to shop.

Although both retailers still promoted price and value, consumers sensed that price was a given and the other brand elements became more important.

Personally, I felt better at Best Buy. I felt more welcomed and the merchandise was better displayed and I was able to find decent sales help and information more easily.  Most Best Buy stores had friendly greeters (who also served as security checkers for shoppers leaving the store) who seemed to know where to direct you for what you were looking for...and in some cases would actually summons help when you needed it.

Circuit City remained the Avis of electronics but they didn't seem to be trying harder just surviving and pretending to be improving their stores.

So no surprise that Circuit City is on its way out of business, despite the recessionary economy this would have happened anyway in my opinion.

The only issue now is will Best Buy start raising prices given their main national competitor is no more?

Watching out for you everyday.

Eli

Cheap brands are cool; luxury is moving out of vogue unless its a bargain

The troubled economy has finally impacted even those folks with gobs of money. Despite the downturn on Wall Street, 6.5% unemployment, and thousands of jobs being terminated daily, this country still has millions of wealthy people, however, their buying decisions and patterns are changing dramatically.

Although they can still buy super luxury brands like Prada, Gucci, Bulgari, Louis Vuitton, Hermes among others and shop at Neiman-Marcus and Saks, affluent consumers have started to express that it is "shameful" and no longer cool to splurge. Cheap is now "in".

A recent story in the Wall Street Journal chronicled the shopping experience of a very well-to-do woman who is accustomed to spending sprees without thinking about them. However, after spending over $3000 on a few pair of shoes, the woman returned to store minutes later to return everything saying, "I just can't do this anymore".

Affluent consumers are spending time searching for bargains online and at thrift and consignment stores...saving money and having great fun. Costco, the huge discount warehouse retailer is seeing more wealthy consumers come through their doors not only to buy necessities but also to buy clothing, furniture and household decor items.

Ebay is also experiencing a huge increase in business as consumers search for high-end brands at auction unwilling to totally give up their "need" for status brand products.

To survive this radical change in spending behavior some luxury brands like Polo Ralph Lauren are having private sales for their customers offering 50% off and more even on the newest items. Look for more activities like this as we move closer to Thanksgiving and the Christmas season.

Watching out for you everyday.

Eli