The Brand Man Speaks

Sketchers has $40 Mill bill to pay FTC for deceptive advertising

In a significant win for the Federal Trade Commission against body toning shoe brand Sketchers, the company has been ordered to pay $40 Million for deceptive advertising.

The sneaker brand which primarily targeted women who wanted to lose weight and get into better physical shape advertised that wearing their shoes would not only shape and slenderize women's bodies but also help them lose weight and improve cardiovascular conditioning BETTER than other brands of athletic shoes. They cited studies to back their claims which were debunked by the FTC.

The ads indicated women would get these results without "setting foot into a gym".

The company used celebrities to endorse their product including Kim Kardashian and Brooke Burke,  (from Dancing With The Stars). No surprise Kardashian was an endorser as she seems to endorse anything that pays money.

The company is forbidden from making virtually any health claims about the shoes going forward. Reebok was forced into a smaller but similar settlement as well recently.

Although it is important for all brands to find uniqueness and distinctiveness in their categories, since Sketchers reason for being was most notably based on this premise, the brandmanspeaks feels the brand is now left empty-handed with no positioning to merit consumer interest.

Publix, Trader Joe's, Wegman's, Whole Foods among best supermarket brands in US

A recent Consumer Reports Study concluded that Publix, Trader Joe's, Whole Foods and Wegman's are among the most beloved supermarket brands in the United States. Customer service, attractive environments and variety and quality of choices contribute to creating memorable food shopping experiences.

The reality is most American's can't afford to shop in the more upmarket supermarkets these days making greatly disliked Walmart's supermarket business #1 in the US because of its prices and convenience.

I read excerpts of the report which also stated people prefer stores with shorter check out lines as part of good overall customer service. What I found interesting is my own kitchen research doesn't necessarily support this premise.

Here's what I have experienced.

First, customer service is at an all time low in virtually all supermarkets because they are trying to keep costs down. Food costs are not as easy to regulate as costs of staffing. I find customer service in Whole Foods for example in New York, LA and Miami extremely poor. Increasingly, I find behind the counter staff surly uninterested and make many customers feel like they are doing them are favor to provide service. The same is been experienced at Publix throughout Florida despite their mantra "Where shopping is a pleasure". Not necessarily so. Check out lines at Publix tend to be long and they are slow to open additional lanes when crowded. I find cashiers and baggers sometimes so involved in their own conversations they practically ignore the customer.

Another interesting observation I have found is that prices for the same items vary dramatically from market to market. I am not talking fresh foods per se (although they vary widely as well based on availability and distance from source) but rather basic commodity items from cleaning products to cookies. I did a mini research study of prices between Ralphs ( a division of Kroger Foods)  in West Los Angeles and Publix in Miami Beach. I found prices in Ralphs on such basic items as Windex and Fig Newtons were vastly higher than in Miami Beach. The differences were as much as 50% higher in Ralphs vs. Publix yet I do not believe the key variable transportation costs should merit such a price difference. Ironically, Ralphs actively promotes "low prices" in their advertising efforts.

Additionally, Trader's Joes is the anomaly. Low prices, high quality pretty decent service and an interesting variety of products. It doesn't replace a supermarket for lots of items but my research consistently shows they check off most of consumers "must have" boxes for a good food shopping experience. Wish they had stores in Florida.....

Finally, I have found sometimes pricing in stores like Whole Foods is LOWER than pricing at Publix for example and although Whole Foods is generally more expensive that is not always the case especially with fresh foods and produce.

My conclusion is that perceptions about better service, pricing and products is quite variable and it is increasingly difficult for supermarket brands to distinguish themselves substantively. Thus, consumers (which they are apparently doing in larger numbers) are shopping around going from store to store rather than only shopping with one brand.

Watching out for you everyday.

Eli

 

 

Kraft Foods creates new brand for its global snacks business: Mondelez?

Often times when corporations either start a new division, have image or legal problems they consider introducing new names for their entities. These days most of the names are made-up ones that may or may not have any meaning or tie to a meaning. Finding names that work across many languages and also are available on the internet is tough going.

Kraft Foods announced last year that it was going to split its food and snack business into two distinct companies. Now Kraft has announced the name for the snack business: Mondelez. It is pronounced mohn-dah-leez and apparently can be linked to the meaning "delicious world".

With enough money and consistency of use almost any name can become well known. Almost all. Mondelez probably will have more success with acceptance overseas than in the US. In the past that might not have been such a big deal but today most businesses are global in nature with the US market of reduced importance.

My problems with this new moniker are 1) pronouncing it and 2) the image it might create among Americans. Most fellow brand experts I talked to say it will be a stumbling block to US acceptance and could possibly backfire. Why? American consumers are used to foreign brands, mostly for higher end goods, but may not find comfort buying commodity food products like snacks from what sounds like a non-American company. Comfort comes from reliability in knowing who is making your food or at least whom you think (or perceive) is making your food.

Only time will tell if Kraft can pull this off. BTW I was not able to find the accent bar to go over the second "e" on my computer, (it's probably there somewhere)--as Mondelez uses this bar as part of its name-- further contributing to difficulty using this new name among most folks.

Watching out for you everyday.

Eli

Knicks Cinderella Super-Star Jeremy Lin to Endorse Volvo

23 year old Harvard educated basketball sensation Jeremy Lin has started to pile up endorsements after his incredibly fast rise to super stardom on the Knicks over the past few months. Most notably his deal to work with Volvo, the beleaguered car brand once the pride of Sweden now owned by a Chinese holding company. Lin already has a deal with Nike from when he was a rookie.

How does Lin match up with the Volvo brand? Good question. Most people still align Volvo with safety. (After years of successful brand campaigns to convince us of this positioning). Recently, since Volvo's financial troubles staying competitive with other European and Japanese brands, it has moved toward performance an area primarily dominated by BMW's "Ultimate Driving Machine".

Lin, a US-born son of Taiwanese parents, is positioned as a unique link to the world marketplace for the Volvo brand given its Chinese owners as well as to Chinese basketball fans who recently lost their other hero Yao Ming who retired from the NBA. Volvo states it has more interest in becoming a bigger global brand beyond strengthening its US base and Lin is seen as the right fit. His youth helps because Volvo is in need of "brand rejuvenation" and a younger profile.

Lin will become the automaker's "brand ambassador" around the world within the next few months. A statement released by Mr. Lin says, "You may not immediately see the connection between me and Volvo. (No we don't, really), But both of us are striving to be better and smarter at what we do, and to do it our own way". Brand speak for sure.

Volvo continues to be in financial difficulty and it remains to be seen if Lin's image and profile makes a difference in the brand's sales performance and continued viability as a auto brand.

Watching out for you everyday.

Eli

Intercontinental Hotels to launch Fitness-Oriented hotel brand, Even

Intercontinental Hotel Group will launch the first mainstream hotel brand focused on the fitness minded traveler. The new chain will be called "Even" and will feature a large fully equipped fitness center in the lobby and fitness minded furnishings in each hotel room.

Research shows that business travelers increasingly are looking for hotels with truly functional gyms and not small closet afterthought exercise spaces. Currently many top luxury branded hotels and spas have fitness centers comparable to health clubs. Canyon Ranch Hotel and Spas in three US locations is noted for its excellent fitness centers on-site.

Intercontinental whose brands include Holiday Inn, Crowne Plaza, Hotel Indigo, Intercontinental, Candlewood and Staybridge Suites plan to open 100 US locations of Even Hotels. The new concept is truly distinctive and quite different than their existing properties.

The Even Hotels will also serve health oriented meals in its restaurants. In room amenities will include a coat rack that doubles as a pull up bar and a luggage rack that is usable as an exercise bench.

Although many might see this as too niche oriented, I believe it is a good branding idea for the relatively stagnant hospitality industry seeking to meet the needs of travelers who want to maintain their fitness regimens on the road without having to search for local health clubs.

The first location (not yet specified) is scheduled to open in 2013.

Watching out for you everyday.

Eli