Archives for December 2012

“There are no outs in this game….they hit until they get on base.” What?

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Parental guidance

I happened to love Parental Guidance, for a couple of reasons.

  1. First, my family is probably smack in the middle of the target audience, with 2 young kids and parents with many classical “new school” demands (dual career, hectic, “normal” life).  So in short, to say that we can relate is an understatement.
  2. Second, it bills itself as “It’s Old School vs New School,” which is a central theme to Hustle Or Bust!  I can’t take credit for their script however!

Obviously I find generational and philosophical differences fascinating.  They happen in business, and in parenting as well.

The movie had a remarkable example where these differences are highlighted at the :50 mark in the official trailer below.  In particular, the baseball scene.  “There are no outs in this game….”

At this point in the post I will go AGAINST my New School demographic (defined by my age) and clearly jump over to the Old School side of the fence.  My mentality, hard wiring and emotion clearly sits on the side of the Old School Mr. Crystal.

No outs?  No striking out?  I see this more and more each year with how young kids are handled, both in sports and in general.  Give me a break!  I guess the argument is for “self-esteem” purposes and kids have an entire life to learn about competition, failure, etc.

I simply don’t buy it.  Creating a false set of outcomes/reality just doesn’t make sense to me.  Guess what?  The world is tough and failure that comes through competition is part of it.  I want my kids to have great self-esteem as well.  It hurts when they don’t succeed and they get frustrated, so I can sympathize with the “no outs” mentality.

But how are you supposed to know what winning (or success) looks like if there is no experience of losing (or failure)?

There are countless examples where New School approaches in life are clearly better than Old School.  I’ll take my excel spreadsheet over my father’s calculator and green columnar paper any day.

But in baseball, (sometimes life if you are lucky), you get 3 strikes to get on base, or you sit down.  

To see a Marketing case study of Parental Guidance, check out this post.

 

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Smart Innovation: 2 CPG New Products That Work

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Innovation is the life blood of a CPG company.  It gives the salesforce a reason to see their buyers and generates consumer interest at the point of purchase.  Ultimately, smart innovation drives profitable incremental $ sales.  It “margins up” a brand for the manufacturer and the retailer.  Innovation is also critical to driving market share gains, one of the critical “missing” P’s of marketing.”

Too often however, new products simply cannibalize existing products.  Why?

  • Appearance:  Same Old, Same Old.  They LOOK exactly like the base products
  • Form & Function are nearly identical to base offering.  The closer the form to the base, the more likely for switching to occur within the franchise
  • Overall, it’s simply a “tweak” off the existing product.  Different flavor.  Marginally better formula.  New Size.

By definition, the further away from the base, the more likely the incrementality of the new product.  Risk also increases.  Like investments, risk is usually correlated with reward in the new product arena.

Here are 2 examples from Billion $+ brands:  Campbell’s & Pringles.

Campbell's Skillet new product

Pringles Stix new product

Why would I consider this “smart innovation?”

  • Fits with their brand equity, they have “license” to extend into these areas.
  • They are sufficiently different from base offerings
  • They bring something substantially interesting to the consumer.  Usage, packaging, ease of use, health benefits.

Campbell’s is clearly the riskier proposition of the two.  Both brands compete in big categories, but if I were to bet, this product line would generate greater total (and incremental) sales vs the Pringles Stix, also probably requires more investment than the closer in Pringles product.

I’m sure Campbell’s did their research, but my first instinct was that the choice of all black packaging, with no reference to their nostalgic “red & white” can may be too far of a reach?  Again, only the insiders understand the testing, consumer feedback and goals, so this is not a second guess (just an observation) as I’m sure they did their homework.

One observation:  While doing a simple Google search on “Cambell’s Skillet Sauces” and reviewing the first page results, it seems like their was a 10:1 ratio of price promotion (store deals, coupon offers) to product reviews, blog offerings.  While this is not uncommon for a new product entry, I did see one fantastic blog review with great product shots, opinions and  instructions (link below).

It begs a key question:  Which communication is more valuable to the brand owners, the trial incentives or the blog review?  What if the 10:1 ratio of incentives vs third party reviews was flipped on the front page of Google, would this thrill the brand team or disappoint them?

If the answer is the former,  did the product intro budget and resulting objectives reflect this desire?  If not, why?

Would love to hear your thoughts….

 

http://www.simplysweethome.com/2012/11/campbells-skillet-sauces-review/

blog write-up of campbell's skillet

 

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Inspirational Videos: Heart & Hustle are Close Cousins

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It’s not always God given talent that separates the ordinary from the extraordinary.

A few videos that demonstrate heart, hustle and ultimately what matters most: Results.

Rocky – One of the great characters in movie history. Who defines the under-dog better?

First a quick 1:21:  Notice the alarm clock….

9 minutes takes you through the best of all 6 (yes I said 6!) Rocky movies.

 

What captures the Olympic spirit better than Derek Redmond and the help of his father?  (Note:  Please insure tissues are handy!)

Al Pacino speech in City Hall.  Any tougher situation than a eulogy to a tragedy?

 

NBA’s top 10 best hustle plays of all time

 

Inspirational moments from one of the great sports movies of all time:  Remember the Titans.

 

Any thoughts come to mind on what’s missing?

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Old School vs New School: Excellence From The Yankees

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Winning.  If your going to play, you might as well Play to WIN.  It’s about Hustle and Results & the principles are timeless:  Old School and New School.
“Everything looks nicer when you win. The girls are prettier, the cigars taste better. The trees are greener.”
Winning
“When we lost I couldn’t sleep at night.  When we win I can’t sleep at night.  But when you win, you wake up feeling better”   Joe Torre 
Joe Torree Winning
“I get the ball, I throw the ball and then I take a shower.” 
Winning results
“There is always some kid who may be seeing me for the first time. I owe him my best.”
Winning Joe D

“If you’re going to play at all, you’re out to win. Baseball, board games, playing Jeopardy, I hate to lose.”

Derek Jeter

Derek Jeter on winning
“Yesterday’s home runs don’t win today’s games.”
Babe Ruth
Babe Ruth Winning
“You play the game to win the game and not worry about what’s on the back of the baseball card at the end of the year.”
—Paul O’Neill
Winning Paul O'neill
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The 80/20 Rule: Timeless and Under-leveraged

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80/20 rule results & effortThe Pareto principle (also known as the 80–20 rule) states that, roughly 80% of the effects come from 20% of the causes.

I think of it as  “Cause & Effect” meets impact.

  • 20% of Customers drive 80% of your sales
  • 20% of your employees drive 80% of your productivty/output
  • 20% of your time drives 80% of your productivity

There are not many areas this law will NOT conform too.  It may be one third driving two thirds, but the relationship holds:  Small #’s drive the bulk of results.

The key behind this principle is understanding the highly productive 20% driving the majority of the benefit.  Find more of that.  Protect that group, nourish it, put your effort there.  Understand the remaining 80% and if possible minimize your effort against it.

Real World Application: CPG

80/20 can be demonstrated visually.  Take a typical category in your local grocery store, lets say Cereal.  Pareto’s law says that 80% of the category revenue will be driven by 20% of the items.  How do you visually demonstrate this?  Break out a Marketer’s right hand (EXCEL):

  1. Calculate the % share of each item.
  2. Rank them high to low
  3. Calculate the “cumulative” share of each additional item.  Example, if the #1 item represents 5% of category sales, #2 = 4%, the cumulative share of both of those items =9% of the category sales.  Add up the cumulative shares of all the items
  4. Graph the cumulative contribution of every item.
  5. Manage accordingly:  If your valuable, sell it.  If your vulnerable, work to change it, or understand why it shouldn’t matter (loyalty, uniqueness, etc)

Graphically, the results look like this, where the first 400 items (<20% of the total 1,300 items) drive nearly 90% of the category sales.

This law holds for nearly every category.  And nearly every time I’ve seen it in action, eyebrows raise.  It should be of no surprise, but think about it:  In this category, 900 items drive 5% of the sales, while 300 items drive 95%!

Said another way, how would you like to be part of the 900 items doing little for the Buyer’s contribution to  sales, while hundreds of competitors fight for this same space?  Power (the “Missed P” of Marketing) Matters.  Knowing it is step #1.

Note:  This type of analysis is so critical, the “competency” is a foundation for Career success in a Marketing CPG career.

paredo

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2 Critical Experiences for a CPG Marketing Career

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CPG shelf set

The war is in the Store

The Consumer Packaged Goods (CPG) industry is one of the largest industries in our economy at an estimated $2.1 trillion according to the Grocery Manufacturer Association (GMA).   The industry is so large, it becomes a “reflection” of our economy in general, where no single company is representative of its challenges.  One thing however is certain:  It deals in the TANGIBLE, not the intangible.

A box of fudge bars can be marketed digitally, but the fudge bars still require sugar, sticks, cream, card-board, labor, machinery, agencies, a truck (and some fuel), a crew of people to get it to the shelf, send an invoice, collect the payments, measure the profit or loss, etc etc.  As the saying goes, it takes a village!

There are many paths to a great career and no single formula guarantees success.

Whatever your aspirations are, I would argue that there are 2 key “foundations of experience” that will serve you VERY well in this industry.

1)  SOME type of Analytical Experience of the retail Market Place

Sometimes called category management, or Syndicated Data analysis.  Despite the emergence of the internet as a distribution channel, the “War is in the store.”  Thousands of suppliers are competing for fixed shelf space.  Facts of the productivity of that shelf space are all around us with syndicated data.  Many people go through an entire career without a basic feel for what is really happening in the market place.  Market Share.  Promotion effectiveness.  Consumer response.  In short, the basics of how brands compete.  Many suppliers do not have analytics in their DNA, and they are the ones on the outside looking in.  Facts Matter.  They provide for sound decision making and added value for the retailers that distribute your brands.  The quicker you develop analytics in your DNA, the better.  No better way than to spend a couple years (minimum) where it is your full time job.  The closer you perform this function to the brand and retailer decision makers the better.  So if you can choose, choose the manufacturer side, close to retailer and brand teams, not the data supplier side.  If you can’t choose, get the experience however you can.

2)  Key Account Sales Management

Back to “The War is in the Store.”  No matter how strong a brand may be, there is an ultimate gate-keeper that needs to say YES in order for the end consumer to vote with their wallet.  It is the Retail Buyer.  Sometimes called a Category Manger.  They need to say YES! to put it on the shelf, at the right price point, promoted for the consumer to try, etc.  It seems simple, but it is not.  Why?

Simply put, buyers have more options than you have great reasons for them to say yes.  And with retailer consolidation, there are fewer and fewer buyers that make up a greater portion of the market place, so its getting harder, not easier.  (see one of the missing P’s of marketing, POWER).  Nothing happens until first a sale, and the key account manager is the closest to the Buyer that makes this happen.  So that is one reason why this experience is critical.

Here’s another one.  The field of Marketing may be one of the most mis-understood professions.  Take one of the 4 P’s, PROMOTION.  Most people think of Marketing and sometimes their mind goes straight to TV commercials.  They are certainly important, and its certainly the “sexy” part of marketing.  But in CPG, they are simply not as relevant as Trade Promotion ($’s spent with the Retail CUSTOMER).  Don’t take my word for it, do your own research.  Trade Promotion is sometimes greater than 90% of a brand’s marketing budget, and its all targeted at influencing the Retailer buyer to say Yes!.  The Key Account Manager delivers the message, negotiates the deal, and uses all of their relationship, analysis and marketing skill to get them the best outcome possible for their brands.  So would you rather have experience that touches 90% of a brand budget, or 10%?  Get both if you can so you have the full experience.  If you have to choose, always pick the one with greater influence.

Those are my 2 critical experience areas.  Any missing?

Updated take on CPG Industry experience: Get to Headquarters!

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When all else fails: Hit the Meat! Go Old School….

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There is a proven the link between exercise and good health.  Its obvious that good health is a pre-cursor to results in business and happiness in life.  But it gets more complicated each year with countless “break-through” programs and pitches from the marketers.  Promises of amazing before and after results photos if you just buy now.  Its almost like the program is the key to results vs the the degree of effort/Hustle you put in.  That’s marketing, and I love marketing.  I have tried a few of the latest fitness programs and they certainly have their merits.

But there IS something to be said for keeping things simple.  Going Old School.

Take one of America’s great movie characters, ROCKY.  There was something magical in the classic scene when he discovers the poor frozen carcass that can substituted for a punching bag.  Nothing illustrated the unconventional, up-hill battle of the underdog better than sound of ribs cracking and blood on the grey hoodie.  

 Rocky discovers hitting beef

Yes its Old-School and it worked for Rocky.  It also works in the real world.

  • Gym membership not required.  Save the money if that’s an excuse.
  • Get outside and walk.  Run.  Do Sit-ups.  Push-ups.  Move.    Need more ideas to keep it fresh?  Search on youtube.
  • MEASURE – Start a simple spreadsheet and start recording the date and how many minutes you “moved”.   Aim for each week doing a bit more.  You can record the number of push-ups too if you want to be more detailed.
  • Start setting GOALS.
  • START.  MEASURE.  IMPROVE. REPEAT.

When the marketing messaging seem to overwhelm you, block it out and slow things down.  Keep it simple.

Go OLD SCHOOL.  Because it works.  

Here’s 1:40 from Rocky, he means business.

 

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The “4 P’s of Marketing”: The Professors Missed 2 Critical P’s

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They missed some critical elements in your B-school education.  The “4 P’s” of Marketing, also known as the Marketing Mix:  Product,  Price,  Promotion, &  Place (Distribution)  serve as the back-bone for any business.

4 p's of marketing, the marketing mix

image credit: 4marketingps.blogspot.com

While the teaching’s are timeless, they are not complete.   With that said, I propose  the “2 missing P’s” in Marketing…..

POWER – The strength of your competitive position

The Golden Rule:  He who has the gold makes the rules.  Simply put, the more power one has in their niche, the better.  There are many reasons why strong market positions matters, pricing power at the top of the list.  Perhaps the most important of all?  The CUSTOMER votes everyday with their purchase.  The largest share player in a category is usually (not always) the player that is winning the vote from the customer, and that matters most.

Power is measured by the all mighty market share.  Your $ revenue as a % of industry revenue.  If you are selling $100mm in a $1bb category, you have a 10% market share.  Whether that means you are in a #1 or #10 share position is dependent on many factors.  In general, the more competitors fighting over points of market share, the more “fragmented” the competitive space is.

Why else is market share important?  Simply put, if your growth is not keeping pace with the category, you will be loose market share.  In the above example, if the category is growing at 10%, the future sales will be $1.1bb.  If you grew at 2%, your sales would be $102mm, and your share would fall to 9.3%.  While that does not sound like much, that is an erosion of your competitive strength of -7%

10% -9.3%= .7% share point decline.  .7% decline over your base 10% (-.7%/10%) = -7% decline.

So $ growth of +2% translates into a -7% loss in competitive position.  Growth needs to be viewed in the context of your competitive space.

Market Share Power

PEOPLEThe secret sauce of every business…..

  • Have you ever worked on a killer new product that never got off the ground?
  • Have you struggled to protect margins as customers (and your sales teams) demand lower pricing?
  • Have you seen competitors with fewer resources grab market share in light speed?
  • Has growth stagnated with no solution in the pipeline?

All of these challenges have a people component at the very core of the issue.  There are countless books written on leadership, customer service, social media, strategy, execution and countless other topics.  What underlies all aspects of business are the people in it, their focus & commitment to the greater good of the organization.  The people create the products, sell them to the customer bases, everything that exists from an “order to the cash.”  There’s a favorite saying I have:  “People make things happen…..or NOT happen.”  It sums it up nicely.

 

Get the 4 P’s right and your on your way a solid business.  But if you get the 6th P wrong (People), its only temporary.

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Definition of Hustle

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Hustle is an old business procedure

HUSTLE: According to the dictionary….

1.   to move or act energetically and rapidly

a:  to urge forward precipitately

b:  to obtain by energetic activity <hustle up new customers>

c:  to sell or promote energetically and aggressively

Translation

It’s not complicated.  It’s about Energy. Drive.  The extra Effort to win.  It’s about being aggressive when others are passive and letting the game come to them.

You may have heard the term on the little league ball field from your coach:  “Come on kids, show some Hustle!”  What you learn on the ball field applies to life.  Only it’s more important in the game of life.

Hustle is one of life’s game-changers.  It separates the ordinary from the extraordinary. 

Jeter Hustle

If you're going to win games, your going to have to come up with the big hits Derek Jeter 

 

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