The Brand Man Speaks

Paula Deen may have swallowed her own poison pill. High Fat Food Chef hides Diabetes

Paul Deen the southern chef who rose to prominence in the past few years with her high fat generally unhealthy but delicious (to many-but not me) cuisine has finally disclosed that she has Diabetes. What is worse and threatens to destroy her brand is the fact that she hid this information from her "fans" and the public in general and then has gone on to become a spokesperson for a Diabetes drug called Victoza.

The problem lies in the fact that her claim to fame are foods that are unhealthy and could directly relate to causing Diabetes in those who indulge in such fat-ladden meals. Ms. Deen has said she "didn't know how to handle" disseminating the news of her Diabetes or her new spokesperson status given the nature of her brand's identity.

Famous recipes have included Deep Fried Mac and Cheese and Fried Butter Balls. Can you say "it might kill you" foods?

Fans of the Food Network have spoken loudly condemning Ms. Deen for making millions and not being honest with her fans and the American public in general.  Other notable chefs have gone as far as to make public statements about Ms. Deen that are not complimentary about this situation.

From a brand point of view, this latest twist (which includes now offering low(er) fat recipes and tweaking her famous Paul Deen Southern Cooking approach dramatically) may create empathy but it undercuts what her brand was all about specifically all her cookbooks and shows that are completely tied to fatty foods.

If she radically changes her shows books and endorsements the Paula Deen brand will be no more and likely to become a footnote in celebrity chef history.

Watching out for you everyday.

Eli

LA Times "brand" story on Kardashian brand has follow up.

Here is the link to the follow up piece by writer Adam Tschorn. He explores my point of view.

Kardashian a Brand?

 

Watching out for you everday.

Eli

Will quickie marriage (72 days) significantly damage Kardashian brand?

When I started to write this piece my own first question was, why does anybody care? Fortunately or unfortunately the Kardashian Klan have built a nice multi-million dollar business all about nothing or  better known as being famous for being (untalented) and famous.

However, there is enough interest in the question of whether Kim Kardashian had built a real brand or just a marketing fad, flash in the pan. In my opinion Kim has yet to "earn" rights to be called a true brand. Most of her antics are PR stunts (and let's not forget without a sex tape she would be absolutely nothing and we wouldn't be wasting our time on this) and not brand building efforts. Launching perfumes, apparel lines, getting paid to appear at clubs and bars and getting married on a reality show for $17Million doesn't not make a brand.

People are more fascinated with her nothingness as entertainment and not about a vision, a journey or some meaningful element to make people believe something she is offering has any real value. Her deal with Sears is a ridiculous one. Kardashian wouldn't be caught dead in a Sears unless she was picking up a paycheck for an appearance.

Now let's address this divorce business. Maybe had she made it past a year or even six months she would have some credibility. But this 72 day PR game wasn't love or a real marriage. It was a paid for "appearance" event in which she got paid in cash and in kind. Poor guy, hope he didn't really see anything in or have feelings for her. I also hope he is laughing to the bank for all this mess. Although he comes off more of an embarrassment to himself than she does because she is not in the least bit embarrassed about being a shill for anything or everything with a payday attached.

Now you might feel that Kardashian isn't much different than Paris Hilton. I beg to differ. Whether you liked it or not she had a particular way of being, a slogan ("That's hot") and a sense of style (not necessarily one you might like). She acted in a TV show that was somewhat entertaining. Kim Kardashian is a poor (woman's?) man's version of Hilton. Hilton had pedigree for her debutante behavior. Kardashian's father was an unknown until the O J Simpson case (like instant fame, "new" money). The Hiltons have been a fixture in America for years.

Will the business of Kardashian be hurt by this divorce? Likely. It exposed her as having nothing honest or real about herself and her so-called fans will probably feel cheated, lied to, deceived but quickly wake up from their delusion of fascination and become disgusted. No journey here just a young girl trying to make a buck. I would suggest Ms. Kardashian be careful not to spend all her quickly earned cash too fast because the gravy train is likely to end soon.

Watching out for you everyday.

Eli

Netflix isn't Doomed.

So says Holman Jenkins Jr. in an opinion piece in the Wall Street Journal today. I do not agree. His conclusion? Despite the huge fall off in subscribers and the costs involved in obtaining more streaming content (of value to subscribers---not just stuff nobody wants to watch) he believes both investors and subscribers will see that no one source will meet their needs because of a fragmented marketplace for at- home entertainment content and that Netflix is still a good value and will survive.

The Netflix premise that took consumers on a "journey" was for a very good price (less than going to the movies) you had a bunch of choices that you could order online delivered right to your door sometimes next day for viewing for as long as you wished. Brand loyalty was built on this premise along with a very identifiable icon, the red Netflix envelope. Streaming was the next order of business but there were many subscribers who wanted both, one or the other, but wanted the choice their way. I am one of the those folks who wanted it his way. Both DVDs and streaming at a fair price. I was a huge fan of Netflix so much so that I bought the stock because I believed the vision and the journey was exciting to many millions of people despite the other options out there and on the horizon.

However, (and I will keep reminding people for some time to come) great companies should not fail to understand that building that brand loyalty is as important (if not more so) than what may appear to be great strategic business modeling to analysts. Many analysts said that Netlfix couldn't maintain the value proposition they had given consumers for much longer and the price increase was a necessity for survival. That may be true. Unfortunately, when a key element of your brand strategy involves price-value you have to be extremely careful when you increase your pricing structure not to go to the point (too quickly) where price elasticity of demand along with sheer shock value hits consumers hard in the face.

Many companies deal with increasing prices all the time as a course of doing business. When you do so in such a way to make the consumer stop in their tracks to say, "wait wow that's a big increase do I still need or want this service?", you are in trouble. If you don't have a very demonstrable plan to show those consumers the value they are getting (as well as if you are smart--adding more value along with the price increase) you are taking a huge risk that likely will alienate your core audience and destroy your business.

In my opinion that is what has happened to Netflix and although I would love to see them fix this mess and get their stock price back up (for me to break even) I just haven't seen or read anything that convinces me that this will occur. I also know that the company's cash flow has been greatly weakened by the greatly devalued stock and huge subscriber base loss over the past few weeks and there is now question if they can survive to pay their current bills, forget acquiring more content.

Lesson: Never underestimate your customers, their emotional connection to your brand or their expectation of your product or service.

Watching out for you everyday.

Eli

 

Why Netflix is failing: CEO Hastings doesn't understand branding

In an interview with the New York Times (appearing in the magazine section today), Netflix CEO Reed Hastings proved why Netflix is failing. As is common with most CEOs, he (admittedly) fails to understand what makes a brand in the first place and what makes one successful in the long term.

In the interview, Hastings says describing the major screw up that Neflix has encountered, "I think it was just a mistake in underestimating the depth of emotional attachment to Netflix". You think? Companies try (mostly unsuccessfully) to build emotional attachments with consumers. It's called brand loyalty and a very key ingredient to long term success. Not understanding this concept is a fundamental admission that one does not know how to market a product something CEOs arrogantly won't readily admit since they mostly think branding is an expense not a revenue builder.

Hastings also puts himself in a comparative role to Steve Jobs (hardly) and Jeff Bezos of Amazon saying his mistakes are all short term and CEOs understand the measurement of success is long term. However, and a big however, Jobs and Bezos understood and understand (respectively) how to build great brand loyalty and nuture it. Jobs was the master at it because he had a vision and took consumers on a "journey" which all great brands do. Hastings was on the right track, but missed an important station stop and went way off track to the point he may not be able to get his business back in gear.

I for one would like to see him resign and hire a more marketing savvy CEO to take the reigns and get the brand somewhat back on track by creating a new "journey" for consumers. It is going to take some great creativity and some concessions (to the brands most loyal consumers). Unfortunately, Hastings says he will not resign.

Watching out for you everyday.

Eli

Newspapers and their future: From Masters of the Universe to near extinction in less than a decade . [First in a series]

The newsprint version of the newspaper business has cancer but it was preventable and it may be still treatable. It was self-inflicted not caused by changes in the marketplace as the industry asserts. The top players were threatened by the new medium of the internet and instead of turning their fears into a triumph they succumb to them. Why? The newspaper industry’s “Old Guard” didn’t understand it and didn’t make any effort to master it. Instead of embracing the internet quickly they fought it, mismanaged it and forgot a very important element of great branding.

During the late 80s and early 90s I was a branding consultant to the newspaper industry.  Unfortunately, I rarely saw eye to eye with the traditionally minded senior executives of the day. It was at the time the internet was just starting to be recognized as a new force in communications and newspaper companies were trying to figure out how to deal with this game-changing tool. We know today most missed the boat and in an attempt to play catch up ended up using the internet medium poorly or incorrectly. While devoting so much money and energy to the new medium newspaper companies lost sight of reinforcing what made a newspaper in print form special and meaningful accelerating its rapid decline to where we are today.

What fascinated me was how many newspaper companies feared the internet and wanted to approach their re-branding efforts from that point of view. It seemed akin to the time when radio met television and radio broadcasters feared TV would eliminate their medium.

We know today that did not happen. Radio serves a place in both the information and entertainment world as does television. Companies became involved with both businesses and learned to use them for the unique elements each presented instead of trying to have one dominate the other. Radio thrives today along side television as two different mediums that deliver different kinds of experiences successfully to broad audiences.

The same should have been true for the newspaper industry.  Here’s why it wasn’t.

The key is the concept of branding is not often well understood by top executives primarily interested in the bottom line. They see marketing, especially branding efforts, as expenses and not investment spending. In the case of the newspaper industry, brands are not about the delivery systems they use. Newsprint, smart-phones and tablets are distribution channels. Brands are conceptual emotional contextual in nature. In the case of newspapers, the brands are the New York Times, Wall Street Journal, Chicago Tribute all in the information dissemination business and for years the masters at it. Many newspaper companies failed to integrate the internet as a new distribution system reaching new audiences (and eventually current audiences as well). Instead they saw the internet as a new brand and started building from scratch loosing focus on what a brand is.

In my opinion newspapers allowed the internet to become an entity beyond their control when in its infancy they could have become dominate players.

Today the internet offers thousands of new sources of news and information using the unique tools of this delivery system to reach all types of audiences all over the world 24/7. Today newsprint versions of newspapers are disappearing like dinosaurs but this didn’t have to be and just maybe this erosion can be stopped as they serve an important role in the information business and as a part of our way of life. Part of the problem likely lies in the fact the newsprint version of news hasn’t evolved in terms of quality and production values over the decades. It’s been cheapened to save money which has made it less attractive and competitive. The user experience has suffered.

Over the next few weeks I will examine other aspects of the decline of the newspaper business and what options might still be out there for its revival. Great brands weather storms even if they are deadly hurricanes. One aspect I will examine is the user experience with newspapers on the web, smart-phones and tablets. The news is not very good and I will explore why.

Next in the series: What did one of the world’s greatest techies think about newspapers and their future? What can we learn from his vision?

Watching out for you everyday.

Eli

 

 

 

 

Netflix drops idea to separate businesses into two. Qwikster dead!

Just off the presses, very smartly Netflix makes the decision to keep their streaming and DVD by mail businesses the same under one aegis Netflix and drops the new business Qwikster idea.

Chalk up one for branding experts who have been screaming across the web for several weeks since the original decision to create two separate entities that this was one terrifically bad business destroying idea. (I have written on this myself in an earlier post:Netflix)

Now if only Netflix would "fix" a few other of their messes they might get back to the business of entertaining the world with ease!

Watching out for you eveyday.

Eli

Netflix: What are they doing with their brand? Destroying it? And this Qwikster DVD brand?

It was no surprise (full disclosure I own their stock) that Netflix's stock took a nose dive after the rather arrogant price raising strategy they took some weeks ago.

To anyone who has studied economics the law of elasticity of demand reigns supreme today as it has for years. To raise prices dramatically and NOT offer some value added to offset the price increase was clearly a very poor strategic move. Not only did Netflix lose many customers, many downgraded their services (including myself) and felt hurt by their actions. This brand had developed somewhat of a cult following. People were extremely loyal...to a point...but found this action unacceptable and insulting.

Today Netfix spun off its DVD by mail division into a new brand to be called Qwikster. Why you might ask? I asked the same question. For those of us who still have subscriptions to both DVDs and streaming the idea that one would have to deal with two different operations is just another nail in the coffin. Making it more time consuming to do business with this company will only serve to make more people drop the service and go elsewhere. More work less convenience, ugh. Not a good strategy.

I don't even like the idea that my familiar red DVD pack will no longer say Netflix but some obscure new name Quikster? Another ugh.

Some speculate that Netflix intends to sell off the DVD by mail business because that business model no longer works economically. Meanwhile, the stock plunges again down over 150 pts in recent weeks and there is nothing coming out of that CEO's office that makes anyone in my opinion think this business has anywhere to go but out of business as consumers lose all faith in this brand.

I believe we will see this as a case study of success mishandled turning a game changer into a game loser permanently. Sad, I don't think if the changes had been managed better, specifically rewarding customers who stayed even with big price increases with some meaningful value added experience that this would have blown up so fast and furiously.

The only way out now is mea culpa BIG TIME doing something fantastic for what customers remain, especially those using both services. Other than that, even I am ready to move on and take my loses.

Watching out for you everyday.

Eli

Will J Lo's split from Marc Anthony derail apparel launch at Kohl's? Unlikely

Speculation among the media is that J Lo's public split from husband of 7 years Marc Anthony will have a sobering impact on the pending launch of two lifestyle brand product lines at mass merchandiser Kohl's.

I think this is one of those cases where J Lo's launch may benefit from the split, yet her hubby's line may quickly fizzle.

J Lo has done a remarkable job of re-inventing herself this past year increasing her public exposure and profile mega-fold for the first time in some years. Her successful participation on American Idol did wonders for her image especially as a style icon.

Many people always wondered about the marriage which appeared to be a good one at first but in some ways seemed a strange match. Reports indicated that Anthony was a control freak and with J Lo's increasing popularity and income stress over losing control may have forced the split. Rumors about a fling with Cuban born hunk "Levy" on her most recent video shoot certainly contributed to her sex appeal and image enhancement.

I believe that J Lo will be even more popular and in demand now that she is splitting from Anthony. As long as the divorce is (mostly) amicable I see no reason why her new apparel line won't be a hit at Kohl's unless the designs and product itself are disappointing, poorly made or not considered good value. She's hot, sexy, on top of her game, looks amazing and yet remains an inspiration to millions of women and craved by many men (Sexiest woman in the world according to People this year).

On the other hand, Anthony's popularity is limited and more niche oriented and his appeal was heightened by his marriage to J Lo. I see his "Q" factor and overall appeal, especially interest in his still unlaunched men's line for Kohl's diminishing fast. As a single act he lacks mass appeal and his style factor again was mostly enhanced by his attachment to her.

The couple has said that they will continue to work together on a latin oriented talent reality show for the moment but it remains to be seen if this pairing can still go the distance professionally. A tough move for most celebrities after they divorce.

I'll check back on this subject a month or so after the product launch.

Watching out for you everyday.

Eli

Amazon fails in second attempt to offer Lady Gaga "Born this way" 99 cent download without problems

Amazon, in an attempt to give Apple's iTunes a run for their money by stealing a growing share of the music download business tried unsuccessfully again this morning to offer the new Lady Gaga album for 99 cents without issues.

Despite sending thousands of emails to prospective album buyers early today that assured the download problems had been resolved encouraging more people to purchase "Born This Way" the online retail giant failed to be able to deliver casting doubt on whether Amazon's tactics of virtually giving away the hottest new music for free is a wise decision for the brand.

Although Amazon should have expected their lost leader music deal to be a sensation on day one with the demand crashing the site, to announce that the company was fully ready to re-offer the deal to ready buyers and NOT be able to deliver on a second day does damage the brand's integrity and will cast a shadow on the honorability of their future attention grabbing offers.

Many prospective buyers feel deceived by this latest Amazon move.

Amazon needs to do a far better job of handling such offers before they go back out with another one or risk consumers lashing out at the company in very effective social media forums which might hurt other parts of Amazon's online business.

Watching out for you everyday.

Eli