Monday, September 29, 2008

Hey Ronald, Welcome to the Party

You know the economy has taken a turn for the worst when you can't afford a cup of coffee.

Just as McDonald's was ready to take a final run at the severely crippled and seemingly clueless Starbucks (in the midst of all their troubles, the coffee company has taken time and money to introduce a new, printed newsletter - the Good Sheet), Bank of America steps in (or out as the case may be) and says "no" to the loans the hamburglars so badly want to fund their 14,000 franchise coffee bars.

So now the franchisees are scrambling to find other banks with money to support their java jitters. But of course, now is not a good time for lending or borrowing. So, the golden arches are suggesting that franchisees use available cash. So maybe it will happen and maybe it will not. Maybe in the spring, maybe in the summer, maybe never. And how do we plan all our marketing support amidst all this uncertainty? Maybe McDonald's should quit clowning around and stay with what it knows best - fast and affordable burgers and fries.

Yeah, like that's gonna happen.

For my money, this scenario begs the question: Just how much does McDonald's hate Starbucks (and/or Howard Schultz)? Apparently more than it once hated Pizza Hut, unless of course the grand plan behind all of this is to eventually purchase Starbucks.


Wednesday, September 24, 2008

Blame It On Marketing

In team sports, when things are not going well, there is a standard process that takes place. First you blame the individual players (ideally the overpaid, underproducing ones; they make good targets) and perhaps even replace one or two of the main cogs. Then you start blaming the assistant coaches. And ultimately you fire the manager. Then you give the new manager a free pass for the next couple years. Generally the owner is overlooked, though there are exceptions to this rule.

In business, you pretty much blame marketing - or the lack thereof - for everything that goes wrong. But first you blame the agency. Maybe the agency got it right and maybe they didn't; they still get blamed. Plus, they are easy to hire and replace, so why not? But once you've blamed the agency, the next cycle begins. Marketing budgets are cut, heads start to roll, staff sizes are reduced and titles are shuffled. Eventually a new wunderkind is brought on board and new agencies are hired and the process starts all over again.

Of course this is a ridiculous process that only serves to undermine the organization. It promotes fear and creates instability. And it usually results in bad decision making.

Marketing has come a long way in the past couple decades, but it remains the corporate scapegoat of all ills. A little more respect for the value of marketing within the corridors of corporate America would go a long way. This is not to say that marketing should not come under the microscope when things go wrong.

Just consider the possibility that marketing might actual be the solution and not the problem. Give us a voice in the boardroom, and listen.

Monday, September 22, 2008

Is It Just Me or Is the Sky Really Falling?

For all the goodwill that the Summer Olympics afforded China, I would have to say that allowing 13,000 babies to be hospitalized after drinking tainted milk formula pretty much levels the playing field and dropkicks the country back into the dark ages. And "oh by the way" they knew about this problem before the Olypmics began; some reports say as early as June. The government is blaming local officials, who are blaming the milk powder manufacturers, and the wheels on the bus go 'round and 'round. I guess we now know what that murky afternoon haze was really all about.

It occurred to me over the weekend that Microsoft may know something that the rest of us don't. In light of the worsening economic picture, perhaps we will soon all be living a "life without walls." And you can take this to reference Wall Street and/or the walls of your home, which continue to be foreclosed at a record pace. I get why the government is unable to step in and bail out individual homeowners, but I don't get why it readily bails out the likes of AIG, whose freaking CEO made over $8 million in salary and bonuses last year. Oddly, a CNN survey found that many Americans (more than 60% of those surveyed) believe the government should step in and help the struggling financial institutions... just so they aren't taxed to pay for it. Ugh.

Heroes returns to the little screen tonight... and not a second too soon.

Bad News/Good News. I'll bet you didn't know this... there's a shortage of road salt this year, which has set the price of salt skyrocketing (apparently salt is the new gold). Fortunately, the price of gas got a headstart on salt; this reality will prevent the majority of U.S. drivers from being on the road this winter anyway. So, all's well that ends well.

In the aftermath of hurricane Ike, it appears that illegal immigrants are once again welcome across the southern border of the U.S. They are helping to rebuild the devastated cities of southeast Texas. [Sarcasm alert] Let's hope our government - local, state and federal - has the good sense to ship them all back across the border as soon as they are finished with the rebuilding effort. And by all means, let's applaud the local businesses and residents who take advantage of the cheap labor but fail to support the cause of the immigrants. Idiots.

The Cleveland Indians are over .500 and fighting for second place, Yankee Stadium is closed for business, Brady Quinn is warming up on the sidelines, the Americans reclaimed the Ryder Cup and the Miami Dolphins put an end to the New England Patriots' regular season winning streak.

The sky isn't falling, there are just a bunch of nuts dropping out of trees. Be sure to buy yourself a dumbrella.

Thursday, September 18, 2008

Microsoft Marketing Madness Part II

I saw it. The new Microsoft "PC" commercial aired last night. It was half over before I realized what it was, but I saw it.

"I am PC." Are you kidding me?

Kirk Douglas saying the memorable line, "I am Spartacus" in this classic 1960 blockbuster became a classic moment because it represented the true dignity and spirit of man. Here was a slave who overcomes all possible adversity to become a great gladiator and leader of his people. In a final valiant effort to protect his people, he gives up his own identity. But his followers so loved him, that they all took his identity.

This line - in homage - is repeated at the conclusion of the 1992 film "Malcom X," as young students of African descent declare: "I am Malcolm X."

And once again toward the end of the last century (1997), this now famous line was uttered by children of all size, stature and color as they eagerly announce: "I am Tiger Woods."

I get Malcolm X. I even get Tiger Woods. Like Spartacus, they both rose up from humble beginnings and made something of their lives.

But "I am PC?"

I am befuddled.

New memo to Microsoft: You're gonna need a bigger ad budget.

Memo to Microsoft: Cancel Your Ad Campign and Save the Money

So now we know the big scret: Microsoft is going to tell PC users why it's okay to be PC users. Yeah, that ought to work.

Let me say a couple of things at the outset. Bill Gates is awesome. He is a tech genius, he is a business genius and he is proving to be an amazing humanitarian. And although PCs are not even close to being as effective, functional, intuitive and fun as Macs, they serve a purpose... and they are cheap. I own one of each. I prefer Mac beacuse it is an infinitely more usable computer. But this isn't about PC vs. Mac; it's about wasteful marketing.

Does anyone actually believe that spending millions upon millions of dollars ($300 million to be precise) to convince PC users that they should feel good about being PC users, is actually going to serve a purpose? In case you haven't heard, you can put lipstick on a mannequin. It's still a mannequin.

Maybe I am thickheaded. Okay, I AM thinkheaded. But what is the point of this massive ad expenditure?

Unlike the classic Volkwagen Beetle ad campaign from the 1960s, which embraced its true identity as a small, sensible, affordable car, Microsoft and Crispin Porter + Bogusky are marketing Windows as "Life without walls." Huh?

On September 15, 2008, PC World Magazine ran an article titled: "Ten fixes for Vista's worst features." Here are the first two paragraphs of the article:

Just ask anyone who's seen Spiderman 3: Good ideas seldom survive bad execution.

The developers at Microsoft had some great ideas while designing Vista, but poor implementation turned many of those great concepts into lousy, annoying features. To be fair, Vista inherited most of these well-intentioned flaws from earlier versions of Windows — but it either failed to fix them or didn't even try.

I would call that a wall... a very big wall. And all the advertising in the world is not going to make me think otherwise. So, in the words of Jerry Seinfeld, "good luck with all that!"

Wednesday, September 10, 2008

A Magical Marketing Formula

Okay, I can not believe that I am right back on this McDonald's vs. Starbucks topic, but it will not go away!

While Starbucks is launching its new better-for-you breakfast menu with minimal fanfare and questionable success (there ain't no lines outside the stores), McDonald's is reporting global sales surges.

According to some reports, recent Olympic promotions have helped to boost the sales. But that is a bunch of nonsense. And as much as it pains me to say it, McDonald's is just out-marketing Howard Schultz.

The special sauce: Yesterday I stopped at Starbucks for my noon grande wet cappuccino, then breezed by McDonald's for a McChicken sandwich and a small fry. The former set me back $3.35... the latter cost me two bucks.

McDonald's seems to understand what Starbucks is unwilling to acknowledge: in difficult economic times, high-priced coffee becomes a luxury for the average Joe (plenty of whom were buying their coffee at Starbucks).

Somebody needs to wake up and smell the coffee.

Friday, September 5, 2008

That's Gold, Jerry! Gold!

Bania: Why do they call it Ovaltine? The mug is round. The jar is round. They should call it round tine.

Bania was an idiot, but he know a good joke when he heard it. Bill Gates on the other hand is a genius, but does he know a good joke when he hears it?

The new Microsoft ad - in and of itself - is pure gold. Pure Seinfeld. After all, it's about nothing.

On the downside, the writing is really not all that good. On the upside, Jerry Seinfeld remains an icon, and who knew that Bill Gates was willing and able to adjust his shorts on command? It is a great little spot (90-seconds little) that tells a fun little story. And it has me looking forward to watching the next installment.

But what I am really curious about, what I want to start a conversation about is the $300 million they are spending on this campaign. Is it just me or is that a lot of money to spend on nothing? Of course this is Bill Gates we're talking about; I'm guessing he and I don't look at money the same way...

Kramer: At Brandt-Lealand, I’m gettin’ things done.
Jerry: How much are they paying you?
Kramer: Oh no no no, I don’t want any money, I’m doin’ this just for me.
Jerry: Clearly… so, uh, what do you do down there all day?
Kramer: T.C.B. You know, takin’ care of business. Well, I gotta go… ah, can’t forget my briefcase.
Jerry: What have you got in there?
Kramer: Crackers.

Still, at a cost of $300 million, I have to believe that it has to be about something... Right?

Jerry: So, we go into NBC, we tell them we've got an idea for a show about nothing.
George: Exactly.
Jerry: They say, "What's your show about?" I say, "Nothing."
George: There you go.
(A moment passes)
Jerry: (Nodding) I think you may have something there.

Thursday, September 4, 2008

If You Can't Fight'em...

Okay, so McDonald's fired the first volley with the introduction of its premium coffee. And Starbucks - like many onlookers - was stunned at their success (and the immediate damage it inflicted on Starbucks). Now McDonald's is vowing to install coffee bars in its restaurants; clearly they have staked out new territory and are willing to do whatever is needed to take down their new adversary.

In the meantime, Howard Schultz has been reeling. Some might even argue that he got caught asleep at the wheel. Somehow I doubt that. This man is vigilant. He simply missed the signs.

The economy was slumping, the coffee craze was slowing down, the price of gas was rising, consumers were losing their jobs and BAM, the bottom drops out.

So what can you do? First you back off of your magazine and stop pushing books and videos in your stores. Then you begin offering lower priced drinks. Then you start closing stores. Then you realize you are in a war and you begin fighting back. But healthy breakfasts? Is this really a good brand move?

It is one thing to re-invent a company, but to openly admit that your food is "embarrassing" seems to send a bad signal. I have never ordered any food at Starbucks... and I am there every day. Starbucks is coffee. McDonald's is food (loosely defined). McDonald's can succeed because coffee is an extra, an add-on. But for Starbucks to add food, well that is a whole different thing.

I wish Starbucks the very best, and would not be the least bit disappointed if McDonald's loses this war, but something tells me that McDonald's has a better marketing plan than Starbucks does.

According to Starbucks, there is research that says I am wrong. Findings indicate that 75% of American consumers say they are willing to change their routine to get a convenient, healthy breakfast [apparently at Starbucks].

But I've got to tell you: I'm not loving it.