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A disruption is always an interruption. It’s something that gets in our way preventing us from doing what we set out to do. That’s the negative take. But there’s a positive angle from which to view a disruption.

Bill Jensen reframes the conversation about disruption in his book, Disrupt! Think Epic. Be Epic. Yes, he touches upon how disruptions can be horribly bad. But really, the takeaway for me is how disruptions can positively change the course of your life.

To share his perspective on disruption, Bill is talking to lots people over Skype and having them share personal stories about how disruptions have radically changed their life. It’s a series on YouTube called DISRUPTIVE HEROES.

Bill invited me to play along and I jumped at the chance because it allowed me the opportunity to tell the story of how Lisa Denney Compton is my disruptive hero.

Lisa forever disrupted my life and my career by hiring me as a field marketing specialist for Starbucks in 1995. If that disruption didn’t happen, I shudder to think where I would be today.

Lisa took a huge risk in hiring me. Not only did I lack experience, but my wicked-good stutter made me unhirable to so many companies. Lisa was able to look past my stuttering and hired me into a role where I flourished.

To learn the very personal story of how Lisa positively disrupted my life, watch below. (You’ll also hear me talk about my favorite disruptive change [tasty craft beer] and the disruptive change I’m struggling with [my smartphone that’s making me dumber].)

Chopping Down a Product

Years ago I wrote about how businesses “chop down” their products to maintain/grow profits. I used a scene from AMERICAN GANGSTER to illustrate this point. It’s the scene where Frank Lucas confronts Nicky Barnes for chopping down his “Blue Magic” dope in order to make more money.

The current Maker’s Mark brand dilution hullabaloo makes the following vintage Brand Autopsy post new again.

Read as drug kingpin Frank Lucas shows some serious CMO chops in explaining why diluting a product is a bad idea.


3_branddilution

Setting the Scene:
Frank Lucas’ “Blue Magic” heroin became the market leader in New York City. Rivals said he had “upended the natural order of things” by selling heroin that is twice as good for half as much. Competitors left the heroin market because “nobody wants to compete with a monopoly.”

To accelerate growth of the “Blue Magic” business, Frank arranged wholesale distribution agreements with other drug lords and mafia families. This shift in business strategy made competitors part of the “Blue Magic” family, with Frank Lucas as the all-powerful CEO and Chairman of the Board.


Never Dilute a Brand
Nicky Barnes competed with Frank Lucas and the success of “Blue Magic” hurt the financial viability of Nicky’s operation. Grudgingly, Nicky signed on as distributor of “Blue Magic.”

In an effort to increase profits of his “Blue Magic” sales, Nicky began diluting the purity of the heroin to increase his inventory and his margins. He sold the diluted heroin as “Blue Magic.” Frank Lucas wasn’t pleased and addressed his concerns just like a top-notch Chief Marketing Officer would to any rogue field marketing manager, maverick product manager, or renegade franchisee.

Follow the encounter from this modified script snippet…

Redmagic_script_3


Businesses “chop down” their products all the time. In the quest to maintain profits or possibly, grow profits, businesses make strategic decisions to dilute their offerings. And if done inconspicuously enough, customers will hopefully never notice.

Frito-Lay chopped down its 12-oz bag of chips to 10-oz. bags. Price remained the same.

Hellmann’s chopped down its 32-oz. jar of mayonnaise to 30-oz. Price remained the same.

Dial chopped down its soap bars from 4.5-oz to a 4.0-oz size. Price remained the same.

Bounty chopped down the number of towel sheets per roll from 60 to 52. Price remained the same.

Kellogg’s chopped down its Fruit Loops cereal package size from 19.7-oz. to 17.0-oz. Price remained the same.

Iams chopped down its 6-oz. package of cat food to a 5.5-oz package. Price remained the same. [SOURCES: USA Today ; New York Times]

However, customers have noticed all this chopping down. According to a Consumer Reports study, 75% of shoppers surveyed said they have noticed smaller package sizes from their favorite brands. And, 71% of shoppers believe the package downsizing is a clear attempt by brands to hide price increases. It’s interesting to note, 50% of shoppers prefer brands stop chopping down their products and instead, keep their old package size and simply raise the price. [SOURCE: Consumer Reports]

The takeaway lesson is simple … when a business decides to dilute its products, it runs the risk of drawing ire from customers.

The action step is also simple … if you find yourself saying or thinking, “A customer will never notice that.” Chances are, they will. Be prepared to deal with their reaction.


Finding Brand Love

It’s Valentine’s week and at Brains on Fire we’ve been talking about LOVE. As in… what it means for someone to fall in love with a brand or a cause.

Brands desperately want people to fall in love with them in hopes they become customers for life.

Simplistically speaking, life-long customers are more profitable than short-term customers. And, life-long customers are certain to spread more word of mouth to their friends and friends of friends about the goodness of business than short-term customers.

However, brands may be approaching finding love from the wrong end of the love chain.

Finding brand love isn’t about finding customers to love you. It’s about becoming a brand worthy of being loved by customers.

That line is worth repeating…

Finding brand love isn’t about finding customers to love you. It’s about becoming a brand worthy of being loved by customers.

So… what is your business doing to become worthy of receiving love from customers?

Ken Blanchard on Employee Productivity


People who feel good about themselves produce good results.” — Ken Blanchard

Starbucks has purchased Teavana, a 300-unit retail tea brand based in Atlanta, GA for $620 million dollars. My tribal knowledge about Starbucks tells me this acquisition is not a blue ocean sales growth move but rather, a protective competitive move and a surefire growth story to tell Wall Street.

In announcing this acquisition, Howard Schultz, Starbucks ceo and chairman, said, “We will do for tea what we did for coffee.”

Hmm…

Let’s take a ride on the wayback machine and go back in time to 1999, that’s when Starbucks purchased the TAZO tea brand. At that time, I’m certain Howard Schultz said something like this, “We will do for tea what we did for coffee.”

According to reports, TAZO has become a $1.4B business for Starbucks. That’s a nice size business. However, Starbucks never fully capitalized on the TAZO tea opportunity. If Starbucks was able to do for tea what it did for coffee, then the TAZO brand should be bringing in revenue far greater than $1.4B.

TAZO has never been able to gain a noticeable presence inside Starbucks retail locations. Yes, its product can be found on the shelves at Starbucks but TAZO has never been able to become a major item on the beverage menu. (The real money at Starbucks comes from drink sales, not merchandise sales.)

When Starbucks purchased TAZO, there was much discussion about opening up a TAZO branded retail store. It’s taken the company 13 years to open a TAZO retail store.

If Starbucks was able to do for tea what it did for coffee, then TAZO should have become Teavana. Instead, Starbucks is buying Teavana.

From my perspective as a dusty former Starbucks marketer, the acquisition of Teavana is a competitive move designed to protect Starbucks market share in the tea category.

Teavana has 300 retail locations, mainly in shopping malls. A good percentage of these mall locations probably compete with a Starbucks nearby. That is bound to cause some competitive hiccups if Starbucks locations start selling Teavana products.

Another competitive hiccup is Starbucks now has two tea brands in its portfolio. Both TAZO and Teavana are upscale tea brands competing for the same customer. One of these brands will need to be repositioned as a downscale tea brand in order to create a competitive difference.

(Starbucks has experience here with Seattle’s Best Coffee. Since acquiring it in 2003, Starbucks has clearly positioned Seattle’s Best Coffee as a downscale option compared to the Starbucks coffee brand.)

I can’t imagine Starbucks being able to do for tea what it did for coffee with the acquisition on Teavana. If Starbucks couldn’t do it with TAZO, why should we believe they can do it with Teavana.

Starbucks clearly has cornered the upscale retail tea market. I’m not sure how much revenue it will bring the company. However, I am sure Starbucks will continue to use this acquisition as a growth story for the analysts working on Wall Street.

Almost every move Starbucks makes these days from its acquisition of Evolution Fresh to its purchase of Bay Bread to the introduction of its Verisimo brewer to its purchase of Teavana can be viewed less as a surefire sales growth opportunity and more as a surefire growth story to tell Wall Street in order to keep the Starbucks stock price trending upward.

Every publicly traded company plays two games. One game is to please customers. The other game is to excite Wall Street. With the acquisition of Teavana, Starbucks is playing the game of exciting Wall Street more than pleasing customers.

Ronald Reagan on Project Management


Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.” — Ronald Reagan

Episode #41 | Talkable is Ignitable

The Talkable Brand video series continues…

Episode #41 | Talkable is Ignitable

In this episode, you will learn a marketing movement can happen when it’s ignited by the passion conversation.

DIRECT LINK TO VIDEO


BACKGROUND INFO:
The Talkable Brand video series will help you to strategically think about ways to make your brand, your business worthy of word of mouth. Every Tuesday on the Brand Autopsy blog a new episode will premiere giving you knowledge and a nudge. Knowledge being interesting information. The nudge being compelling motivation to make the information happen. The result, I hope, is helping you make brands more talkable.

EPISODE ARCHIVE:

#01 | Achievable
#02 | Believable
#03 | Bankable
#04 | Original
#05 | Practical
#06 | Paradoxical
#07 | Artful
#08 | Skillful
#09 | Informational
#10 | Comical
#11 | Loveable
#12 | Functional
#13 | Social
#14 | Emotional
#15 | Conversational
#16 | Relatable
#17 | Invisible
#18 | Visual
#19 | Conversable
#20 | Conditional
#21 | Measurable
#22 | Scalable
#23 | Cultural
#24 | Controversial
#25 | Recommendable
#26 | Natural
#27 | Remarkable
#28 | Vulnerable
#29 | Operational
#30 | Maintainable
#31 | Oral
#32 | Digestible
#33 | Physical
#34 | Touchable
#35 | Improvisational
#36 | Multidimensional
#37 | Meaningful
#38 | Accessible
#39 | Admirable
#40 | Affordable

The Talkable Brand video series continues…

Episode #40 | Talkable is Affordable

In this episode, you will learn word of mouth isn’t free, but it is affordable.

DIRECT LINK TO VIDEO


BACKGROUND INFO:
The Talkable Brand video series will help you to strategically think about ways to make your brand, your business worthy of word of mouth. Every Tuesday on the Brand Autopsy blog a new episode will premiere giving you knowledge and a nudge. Knowledge being interesting information. The nudge being compelling motivation to make the information happen. The result, I hope, is helping you make brands more talkable.

EPISODE ARCHIVE:

#01 | Achievable
#02 | Believable
#03 | Bankable
#04 | Original
#05 | Practical
#06 | Paradoxical
#07 | Artful
#08 | Skillful
#09 | Informational
#10 | Comical
#11 | Loveable
#12 | Functional
#13 | Social
#14 | Emotional
#15 | Conversational
#16 | Relatable
#17 | Invisible
#18 | Visual
#19 | Conversable
#20 | Conditional
#21 | Measurable
#22 | Scalable
#23 | Cultural
#24 | Controversial
#25 | Recommendable
#26 | Natural
#27 | Remarkable
#28 | Vulnerable
#29 | Operational
#30 | Maintainable
#31 | Oral
#32 | Digestible
#33 | Physical
#34 | Touchable
#35 | Improvisational
#36 | Multidimensional
#37 | Meaningful
#38 | Accessible
#39 | Admirable

Peter Drucker on Managing Change


The most effective way to manage change is the create it.” — Peter Drucker

Episode #39 | Talkable is Admirable

The Talkable Brand video series continues…

Episode #39 | Talkable is Admirable

In this episode, you will learn admirable brands choose to create customer evangelists.

DIRECT LINK TO VIDEO


BACKGROUND INFO:
The Talkable Brand video series will help you to strategically think about ways to make your brand, your business worthy of word of mouth. Every Tuesday on the Brand Autopsy blog a new episode will premiere giving you knowledge and a nudge. Knowledge being interesting information. The nudge being compelling motivation to make the information happen. The result, I hope, is helping you make brands more talkable.

EPISODE ARCHIVE:

#01 | Achievable
#02 | Believable
#03 | Bankable
#04 | Original
#05 | Practical
#06 | Paradoxical
#07 | Artful
#08 | Skillful
#09 | Informational
#10 | Comical
#11 | Loveable
#12 | Functional
#13 | Social
#14 | Emotional
#15 | Conversational
#16 | Relatable
#17 | Invisible
#18 | Visual
#19 | Conversable
#20 | Conditional
#21 | Measurable
#22 | Scalable
#23 | Cultural
#24 | Controversial
#25 | Recommendable
#26 | Natural
#27 | Remarkable
#28 | Vulnerable
#29 | Operational
#30 | Maintainable
#31 | Oral
#32 | Digestible
#33 | Physical
#34 | Touchable
#35 | Improvisational
#36 | Multidimensional
#37 | Meaningful
#38 | Accessible