Year-End Predictions and Wishes

We write a lot about trends in this blog.

These days it’s easy to think about trends as being only about the economy, but that almost always isn’t the complete answer. People are, after all, only consumers some of the time — and even then they do not turn into anything even closely resembling a simple buying equation.

But as we are best known for our predictive metrics, applying them to some areas outside the buying equation allows us to offer up two, final year-end forecasts:

The holidays will provide you a time for reflection, wonder, and discovery, and


The New Year will bring you health, happiness, and good times.

As is our tradition, and in order to “re-charge” our own mental, physical, and spiritual sides, our offices will be closed from noon December 24th through the New Year.

To our clients, friends, and readers of our blog, the Brand Keys family wishes you and yours the very best of the season, peace and prosperity, and a happy and healthy New Year.

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He Who Has Not Christmas in His Heart Will Not Find it Under a Tree – Real or Artificial

Years ago someone noted that you shouldn’t worry about the size of your Christmas tree because in the eyes of children all trees are 30 feet tall. That was, of course, at a time when children didn’t come into the marketplace hotwired to the Internet with Christmas Tree Height Calculator apps connected to the 5 megapixel cameras on their smart phones. If you’re trying to speculate about height expectations as regards Christmas trees it’s a pretty safe bet to say that size matters. No question there.

No, nowadays the big quandary is real or artificial. Christmas trees of all kinds are grown on more than 12,000 tree farms all over the United States. Seventy million trees are planted every year, with around a half-billion Christmas trees growing on farms, so this is a category that doesn’t worry too much about coming up short in the inventory department. The top-5 Christmas tree producing states are: Oregon, North Carolina, Michigan, Pennsylvania, and Wisconsin

Most artificial trees come from – you guessed it – China, and there’s no shortage of the 100% recycled plastics from used PVC packaging materials they’re using there either. Advocates of artificial trees say they’re convenient, reusable, and don’t drop needles all over the living room. But they don’t smell like a pine forest!

Last year – according to the National Christmas Tree Association – consumers spent $2 billion for 28 million real trees and 12 million artificial trees, with artificial trees growing in share while costing almost twice as much as a real tree. Tree sales this year are likely to surpass last year’s level, a sign that emotional values of the season are, once again outweighing the consumers’ rational, wallet-watching side that this economy has tended to bring out in folks.

So it’s deck the halls time, and the decision as to real or artificial is still open for the next 4 days. And if our work understanding emotional decision-making has taught us anything, it’s that there is far more wrapped up in the ideal of a tree than whatever winds up under it.

In the immortal words of Charles Dickens about his character, Ebenezer Scrooge, “it was always said of him, that he knew how to keep Christmas well, if any man alive possessed the knowledge. May that be truly said of us, and all of us!”

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More Brand Disasters of 2010

This week Advertising Age issued their list of the 10 branding and marketing fiascos of the year. They listed the Jay Leno move to 10PM (“tanked with viewers, advertisers, and network affiliates.”); the Gap’s lemon of a new logo layout (“looked like something puked up from a late-‘90’s Dallas office park.”); and Microsoft’s first entry into the phone category (“a physically unattractive communication, er, thingie with no clear positioning”). Ad Age picked only 10, so every disaster couldn’t be listed. The Tiger Woods human-brand debacle wasn’t included, for example. But they had others and they were pretty funny. Not, of course, for the companies and brands that found their follies revisited, but very funny for the rest of us.

Brand Keys also pokes fun at brands that participate in brand bungles and marketing misdemeanors all year round, in our blog The Keyhole (http://brandkeys.blogspot.com). We are unfailing in our belief that brands should be the beneficiaries of their branding and marketing efforts, and see positive consumer behavior in the marketplace: Sales; Profitability – things like that. Happily, we have metrics that provide a consumer’s eye view of the categories in which brands compete and because those metrics are emotionally-based they are predictive of what will happen, good or bad.

So when it came to this year’s brand and marketing disasters, we turned to the balance sheet and offer these brand disasters as additions to the 2010 list:

1. BP: The brand went from 1st to 7th (of 7) on our Loyalty Index when the well exploded. UK’s YouGov’s polls indicated no negative affects to the brand. The financials suggest the brand has lost all of its value in one year.

2. Toyota: The recalls – and attendant negative PR re: allegations that top execs knew, but failed to do anything – and liability suits resulted in a loss of nearly a quarter of the brand’s value.

3. Johnson & Johnson: Recalls can kill a brand, especially when you’re talking about medicine for infants and children, having to shut down plants, and stop distribution of your biggest names. Harder to swallow is a brand hit of nearly 30%.

4. Blackberry: Once the darling of businesspeople and Wall Street, the brand has lost out to the iPhone, Android-based phones, and Samsung’s and LG’s (very) smart phones. Bottom line: brand value down nearly a third.

The best thing about these lists? It’s the end of the year, and brands can put it all behind them – but only if they can get out in front of consumer expectations. Here’s wishing all a head start for the New Year!

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Electrifying the Car Rental Category

Zippcar, the world's largest car sharing service, is an alternative to traditional car rental and car ownership. You join and get a Zipcard that unlocks thousands of cars around the world. Drivers rent by the hour. Gas and insurance are included in the price and there’s no minimum commitment. It’s considered a “green” alternative because it gets cars – they estimate 12 to 20 personally owned cars for each Zipcar used – off the road. Has some real face-validity to it.

“Green” and “sustainability” have, of course become more important elements of most product and service categories in recent years. A number of years ago the aspect of “green” got so important in Athletic Shoe category that the ‘Materials and Manufacturing’ engagement driver had to be renamed to – no pun intended – the ‘Carbon Footprint’ driver. So we weren’t all that surprised to see “green” increase the percent-contribution it makes in the Car Rental Category as well. To be fair to all brands, there isn’t a whole lot of differentiation in that area, and they’re cars, after all, and currently Zipcar is too small to show up on our National survey, but that said, here’s how the brands rank versus the Ideal in being perceived as “green:”

1. Avis (58%)
2. Hertz (57%)
3. Enterprise (56%)
4. National (53%)
5. Budget (50%)

Avis used to be the brand known for “working harder,” but in this case Hertz is rolling up their sleeves and revving up their brand engine and taking a run at the rent-by-the-hour marketplace – and Zipcars’ green positioning – by letting eco-conscious New Yorkers rent plug-in autos by the hour beginning the middle of this month.

The company is offering an all-electric Nissan Leaf, a virtually silent mode of transportation with a top-speed of 90 MPH, which defuses the joke how do you make an electric car go faster? A tow truck. If you’re interested it will cost you a $50 membership fee and around $7 an hour. It takes 8 hours to charge at a specially designed charging station, and 20 hours from a household outlet, but no mention has been made about the length of the actual extension cord you’ll need!

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When You Are Through Innovating, You’re Through

Since the mid-eighties marketers have been looking for franchise opportunities for their brands. The most likely suspects were the industries where customers were not loyal enough or satisfied enough to make market-entry an easy(ier) proposition. On those grounds, the dry cleaning category would be a perfect candidate, and Procter & Gamble has come up with an approach they think is unbeatable: Tide Dry Cleaners.

Yes, that Tide, P&G’s best-selling laundry detergent. Clearly they are looking at the Tide brand as something that can insert itself seamlessly into the industry and immediately take the high ground That’s something Clayton Christensen, the Harvard Business Professor, called “disruptive innovation.” From the brand perspective, we agree. Tide ranks number 1 in our loyalty and engagement index and is the top-selling brand in the laundry detergent category. This year’s ranking looks like this:

1. Tide
2. Cheer
3. Wisk / Gain
4. All
5. Purex / Era
6. Arm & Hammer
7. Bold

That kind of positioning bodes well for the brand and for a new industry entry.

But brand itself – even one rated number 1 – isn’t enough these days. Tide comes to the category confrontation loaded for bear. They have nearly a million Facebook fans to reach out to and engage. And let’s be honest with ourselves, while brand is the most critical aspect of any marketing effort, and ultimately the real differentiator, customer behavior is governed by customer expectations held for a number of category-specific attributes, benefit, and values like service, environmental sustainability, and pricing.

Tide not only has an already-developed, in-going customer base, but are said to be offering things like 24-hour and drive-thru pickup and delivery and cleaning methods that will be extraordinarily gentle to the environment. Not to mention a heritage of promotional experience that includes discounting, couponing, and added-value giveaways like P&G products and gift cards. Not a lot of neighborhood mom-and-pop dry cleaners can compete with that kind of marketing. Also, who can compete with the smell of Tide, evoking memories of mom, clean sheets, and home?

The dry cleaning industry generates nearly $8 billion dollars annually, so you’d think there would be room for one more competitor. But based on the Tide brand and the plans for the brand, it looks as if P&G will clean up.

Literally and figuratively.

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The Morning News Gets a Facelift

Loyalty comes when a brand – a product, or a service, even a TV show – is better able to meet (even exceed) the consumer Ideal for the category in which it competes. But, of course, to do that you have to have a real fix on what that Ideal really is. What the consumer really thinks is the Ideal, not what they say they think.

We specialize in predictive loyalty and engagement metrics so we think about it all the time, but it was more than just another days’ work for us when we read that CBS was replacing every member of the weekday anchor team on “The Early Show,” its perennially third-place morning program.

They’re actually 5th on our Customer Loyalty Engagement Index, which currently ranks Morning News shows – and which correlates very highly with viewership, thank you – like this:

1. Today (NBC)
2. Good Morning America (ABC)
3. Fox and Friends (FOX)
4. American Morning (CNN)
5. Early Show (CBS)

Loyalty always correlates with positive consumer behavior, so we weren’t surprised to learn that to date The Early Show has only averaged 2.7 million viewers, down slightly from the same time period in 2009, while NBC’s Today averaged almost twice as many viewers — 5.3 million, and ABC’s Good Morning America averaged 4.3 million.

The new lineup is due to debut on January 3rd, but the truth is that consumers expect more from their Morning News show than appealing hosts and a new set. Note to producers: nobody – we mean nobody – is waking up and thinking “let’s see what the new CBS Early Show set looks like.” OK, maybe the set designer’s family, but nobody else.

Everybody else is thinking, ”Let me turn on a program that is more like me than, say, a housewife in Iowa.” Or they’re thinking, “Do I really trust they guys (and gals)?” Or “the guests these guys have on each morning are really cool!” Oh, and “why can’t they get the weather report right? Can’t they forget that Doppler stuff and just look out the window and see it’s raining!?” That’s the kind of yardstick Morning News shows have to measure up to. If you can’t do that you’re at a real disadvantage.

But as John Stewart commented about his own show, “of course, our show is at as disadvantage compared to the new sources we compete with. For one think, we are fake. They are not. So in terms of credibility we are, well, oddly enough, actually about even.”

Which is pretty funny, but when you are perennially in 3rd place, that’s nothing to laugh at!

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Ah, the French Fry

The very first reference to French fried potatoes showed up in O. Henry’s 1894 column, Rolling Stones: "Our countries are great friends. We have given you Lafayette and French fried potatoes." And whether you call them “French fries,” “fries,” “chips,” or “frites,” whether they come thick-cut, crinkled, straight, or curly, they’ve become a predictable staple in the American diet, most notably at quick-serve restaurants. So predictable, in fact, that Jay Leno once joked, “I went to McDonald’s and ordered some fries and the girl at the counter said, ‘would you like some fries with that?’”

Nobody would deny that the taste of McDonald's French fries has played a critical role in the chain's success. Fries are much more profitable than hamburgers and people just love them. But the taste doesn’t stem from the potato or the equipment that fries them. The secret lies in the cooking oil and for years McDonalds cooked their fires in oil that was mostly composed of beef tallow. You can make a face, but that’s where the great taste came from. That changed about a decade ago when cholesterol criticism led them to switch to vegetable oil. But if you check their inventory of ingredients for their fries you’ll find “natural flavor” on the list. Hmmmmmm.

Anyway, are French fries about to get the respect they deserve? Well, Wendy’s, as part of a program to promote food made with more natural ingredients, has kicked off a National campaign heralding a new recipe for French fries in what is positioned as the biggest overhaul of its fries in 41 years. From the news briefs it appears that they’ll be using Russet Burbank potatoes (the same used by McDonald’s) but will be keeping the skins on, will be slicing them thinner, frying them crisper, and sprinkling them with sea salt. No mention of their oil choice has been made.

According to our Customer Loyalty Engagement Index, here’s how the major chains rank when it comes specifically to their fries:

1. McDonald’s
2. Arby’s
3. Hardees
4. Burger King
5. Carl Jr.
6. Nathan’s
7. Jack-in-the-Box/White Castle
8. KFC/Chic-Fil-A
9. Wendy’s.
10. Popeye’s
11. Sonic

A number of countries claim the “fry” as their own, but French peasant cuisine is most frequently credited as the creator of the dish and hence the nomenclature. They say this cuisine is the basis of a culinary art that is mostly composed of honest, natural elements. So maybe Wendy’s new, natural approach will help to stem the decline French fry servings have seen over the past few years and add a little snap to the brand.

The profit contribution fries make to the bottom line notwithstanding, the fast food chains really need to get their formulas for fries so that they meet customer expectations. These days when marketers (in any category) miss that mark, customers drop them like a hot potato!

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