The Tale of 2 Coffee Shops

from the Not-So-Secret Writings of ScLoHo:

You are in the People Business

Posted: 19 Jul 2011 04:00 AM PDT


I started writing this in March:

No matter what you produce, provide, sell….

No matter how automated and sleek your systems are…

No matter if you wear jeans or a three piece suit…

You are in the people business.

There’s a couple of coffee shops on the same street in my town that have very different personalities.

My favorite has been in business for over 10 years and has switched coffee providers once or twice, changed some of the details and each year they seem to do a little remodeling.

They used to have live music on Friday and Saturday nights. They don’t anymore. They used to be open late on weekends. Now they close at 8pm every night. They have a couple of the original staff, and the others that work there fit in to the culture.

Most of the furniture is old, some is getting a little threadbare, but it is a comfortable place to go and get a bite to eat, a white mocha, a smile and a little conversation.

Down the street is another coffee shop that roasts their own beans and is also family owned. They moved from across the street to the same side as the first shop and expanded their offerings.

Along with having coffee, they also have a full service bar and on Friday and Saturday evenings they would have a special theme menu that would include ingredients from their garden and recipes crafted from their own chef. Coffee shop #2 really had it going for them as a place that my wife and I would often visit for dinner on Saturdays.

Not anymore.

Recently on a Saturday night at 6pm we walk in the door and notice the weekend menu’s were not out. They were on the door, but not on the tables or at the bar. The owner and his wife are usually there when we show up, but not this time.

Instead of feeling comfortable, it felt like sort of weird. The guy at the register was busy counting change, the young woman who took my wife’s drink order not only had to pull out the recipe card but had to ask what kind of liquor to use and she seemed very unsure of herself.

When I asked for a menu, they said they aren’t doing the weekend dinner menu on Saturdays, only Fridays. Which was very disappointing since the read the menu as we walked in and was trying to decide which delicious items we would enjoy. Instead we had a drink and left.

It’s now 4 months later. Neither one of us have been back. As a matter of fact, a couple of days ago, she asked me if coffee shop #2 was still in business, as we drove by on Saturday afternoon. That’s not the lasting impression you want to leave with your customers is it?

And yes, they are still in business.

Update: my wife and I visited them Friday night. Dinner was both unique and delicious. Service was a little better as one of the owners was tending the bar.

Saturday I told some friends about our Friday night experience and apparently they have done a lot of damage in their reputation beyond what I was aware of personally. These friends will never go back.

Which leads me to share once again: Where Did They Go?

BrandTang: 40 years later

I really haven’t thought about Tang in the past 30 years, but someone has.

This report is from AdAge:

Tang became the most famous beverage in the galaxy more than 40 years ago when it rode along with astronauts in space. Now the powdered drink mix has reached a more earthly milestone.

Kraft Foods announced today that Tang has become its 12th billion-dollar brand, with global sales nearly doubling since 2006, thanks mostly to aggressive marketing in international markets such as Brazil, Argentina, Mexico and the Philippines. Tang joins an elite roster of billion-dollar brands at Kraft, including powerhouses such as Oreo, Trident, Milka, Oscar Mayer, Maxwell House and Cadbury chocolates.

Of course, in the beverage world, the billion-dollar club is not as elite. Coca-Cola alone boasts 15 of them, ranging from Coke and Sprite to Vitaminwater; and PepsiCo owns 10, including Pepsi-Cola, Gatorade and Sierra Mist.

But for Kraft, Tang’s ascension validates the focus the food giant put on the brand overseas, including making it one of 10 “power brands” in developing markets. “With an entrepreneurial spirit, our Tang teams across the world connected virtually to harness our global powdered beverage technology and expertise,” Sanjay Khosla, Kraft’s president for developing markets, said in a statement.

The brand reached $1 billion sales in the year ended March 31, Kraft said. The brand in 2010 controlled a category-best 15.6% of the international powder concentrate market, edging out another Kraft brand called Clight, which is the international version of Crystal Light, according to Euromonitor International.

Tang initiatives include giving regional managers more freedom, while customizing flavors to local markets. Although orange is the top-selling variety, Kraft says it found success pushing flavors such as mango in the Philippines, soursop in Brazil, horchata in Mexico and pineapple in the Middle East. Such local flavors make up roughly 25% of Tang sales in developing markets.

In some countries Kraft learned that consumers wanted smaller packages, so the company introduced slimmer, more affordable sizes, such as two-liter packs sold in Mexico for below 50 cents. And the company spread the word with aggressive sampling programs. The brand’s global ad agency of record is WPP’s Ogilvy & Mather.

Kraft is “doing a decent job of taking a product that is sold in the U.S. and adapting it to local tastes and preferences to really drive growth and to drive further expansion of the brand in those newer markets,” said Erin Lash, who covers Kraft for Morningstar. “They’ve been switching from more of a centrally managed [approach] and shifting to more of a local focus to really resonate with the consumers.”

Stateside, Tang has gotten less attention — and less glory — since its high-flying days back in the 1960s, when it began rocketing into space. In 1965, Tang, then owned by General Foods, aired a TV ad within three days of the Gemini 4 splashdown. And in 1968 Tang sponsored ABC’s network coverage of America’s first manned flight around the moon, Apollo 8.

But the last time Kraft dedicated any measured media spending to Tang in the U.S. was in 2008, when it spent a paltry $129,700. Rather, Kraft’s domestic drink focus has been on Crystal Light, which had $46 million in measured media last year, and Kool-Aid, which got 26.4 million. Meantime, Kraft plans to spend aggressively on its newest drink brand, Mio, a first-of-a kind liquid water enhancer launched in the U.S. earlier this year.

Still, Kraft signaled that it might return some of the spotlight to Tang. “Based on the tremendous success Tang is enjoying in other markets, particularly in Latin America, we’re looking at what lessons we might be able to apply here in the U.S.,” spokeswoman Lisa Gibbons told Ad Age in an email.

Even without any advertising support, Tang grew slightly in the U.S. to $14 million in sales in the year ending April 17, ranking it ninth in the fruit-drink-mix category, but well behind No. 1 ranked Kool-Aid, which had $129.5 million in sales, according to SymphonyIRI data, which does not include Walmart.

~ ~ ~
Contributing: Natalie Zmuda

Bye, Bye Brands?

Al Ries & Jack Trout wrote one of the first books I read when I got in the advertising world 25 years ago, Positioning.

These days Al writes for Ad Age:

Have We Killed Brand Advertising?

It’s Hard to Market a Name That’s Been Expanded to Oblivion

Brand advertising seems to be on its way out.

Take Starbucks, which used to advertise its coffee shops. And very effectively, too. Today, the brand is strongly positioned at the top of the coffee-shop market.

What’s next for Starbucks? The company’s recent decision to drop the words “Starbucks coffee” from its logotype seems to indicate where the company is going. According to media reports, Starbucks is in the midst of a transformation from a coffee company to a food and beverage organization.

Starbucks is following a well-worn path. Build a brand that stands for something and then try to figure out what other products you can hang the brand name on.

Take Crest, a Procter & Gamble brand that used to stand for cavity-prevention toothpaste. Today, Crest is a toothpaste, a toothbrush, a mouthwash, a dental floss and a tooth whitener.

There is no such thing as a Crest advertising program. And if there were, what would the message be? Probably some variation of the slogan used on the Crest website: “Healthy, beautiful smiles for life.”

It’s not that Procter & Gamble doesn’t advertise. In 2009, P&G was the largest advertiser in America, spending $4.2 billion.

They just don’t advertise brands. They advertise various products their brand names are attached to.

That’s typical of many categories.

The car conundrum
Consider automobiles. When was the last time you saw an automobile brand advertisement? Automobile companies don’t advertise brands, they advertise individual models and hope you form a favorable impression of the brand by osmosis.

Take a typical Ford advertisement featuring the “all-new Focus,” which is likely to be a big success. But what does it do for the Ford brand? Not much, especially with one of the weakest slogans in the automotive field: “Drive one.”

There are 23 automobile brands on the American market that each sold more than 100,000 vehicles last year. It must be extremely difficult for an automobile prospect to differentiate between 23 advertising campaigns for these 23 brands.

But that’s not the real problem. These 23 brands encompass 205 different models and almost all automobile advertising is “model” advertising rather than “brand” advertising. And I suspect most of this advertising is ignored because there is no way for the average consumer to find positions in the mind for so many different models.

Once in a while, an automobile company finds a reason to advertise its brand rather than one of its models. In January 2009, Hyundai launched its Assurance program, offering to take back cars sold to customers who lost their jobs. This idea created enormous awareness for the Hyundai brand. But campaigns like that one are rare.

It’s not the fault of the advertising agency. How can you run an advertising campaign for an automobile brand that sells cheap cars and expensive trucks (and everything in between) under the same brand name?

No, the fault lies with the company that expands the line into oblivion, and then expects to run an advertising program to enhance the value of the brand.

New and improved
Years ago, Procter & Gamble pioneered the “new-and-improved” philosophy. Every few years, each brand was updated with one of the latest developments created in P&G laboratories. Not only did these developments keep the brand ahead of the competition, but they also provided ammunition for the brand’s advertising.

Today, the philosophy has changed: Introduce the new-and-improved version, but also keep the “old-and-obsolete” version on the shelves. That way, the company gives the consumer more “choice” and, equally important, allows the new-and-improved version to sell for more money. In the process, the strategy also creates more “facings” for the brand on the shelves.

Look at Campbell’s tomato soup. With all the negative publicity about sodium, the company wisely introduced versions with “25% less sodium than our regular product.” But it also kept the regular product on the shelves. (Now it turns out that the company didn’t really mean to compare the low-sodium product with its regular soup, but with the average sodium content of the soup category.)

You pay a penalty when you do this. The consumer assumes the 25%-less-sodium product doesn’t taste as good as the regular product and the regular product has too much sodium, otherwise why introduce a 25%-less-sodium product? Now the consumer has no reason for buying either the regular soup or the low-sodium version.

Then there’s Campbell’s Healthy Request tomato soup with “0g trans fat per serving” advertised on the front of the can. But Campbell’s regular tomato soup also has zero grams of trans fat per serving. (At Publix, the Healthy Request version sells for 50% more than the regular tomato soup.)

Instead of playing verbal games with consumers, a better strategy, in my opinion, would be to eliminate trans fat in all Campbell’s soups, reduce the sodium content and then run a massive advertising program with the general theme, “All Campbell’s soups are now new and improved.”

Nothing to advertise

It’s strange. With all the innovations that have occurred over the years, very few brands have anything to advertise, except the merits of individual models or products. In today’s overcommunicated society, this “model” strategy is wasteful and ineffective.

And so it goes. As a brand expands into different varieties and different categories, the brand itself loses its ability to stand for anything specific. And if a brand cannot stand for something specific, it cannot be advertised in an effective way.

The New Frontier


I’ve worked in the radio advertising business since 1986 and seen watched the growth of the web as a new media and medium for advertising & branding.

Check out this story from RBR.com:

Technology makes media redundant

Brand (n): a class of goods identified by name as the product of a single firm or manufacturer. (Source: Merriam-webster.com) What do the media have in common with the idea of branding? Unfortunately, not much … yet! The media have long operated under a functional model that is based upon two foundational variables:

Distribution: This is the definition of the term “medium” in the first place. It’s the idea that a medium represents a unique distribution pathway that enables content to flow from its source to an audience.
Audience: The focus here is the medium’s ability to aggregate an unduplicated audience that is highly desirable to marketers.

And, once upon a time and not too long ago, this functional model seemed to work. Historically, media distribution pathways were relatively fixed and a bit more proprietary. Newspaper circulation networks were required to disseminate news to a particular community/market. Network television affiliates were required to broadcast television signals across a coverage area (Designated Market Area). The technology was not particularly friendly to redundant systems.

And audiences selected their medium of choice and spent their time with said medium … usually to the exclusion of others. Media consumption analyses used to illustrate the “sea-saw effect.” If you were a heavy user of one medium, you tended to be a light to non-user of another.

There was no need for the media to become true brands. Branding comes into play when product function is no longer enough. Brands take what are otherwise redundant products or services and make them special. Brands live beyond function, to infuse promises that create emotional bonds between the brand and the consumer.

Well, the time has come. The old model is broken: Any medium that defines its strategy by virtue of either its mechanism for content distribution and/or its ability to aggregate an audience will likely fail. There is nothing proprietary or particularly compelling in distribution pathways or audiences. The media themselves are becoming a commodity.

Thanks to first digital and now wireless (mobile) technologies, new distribution platforms can and will spring up with limited cost or infrastructure required. Much like the human body that can generate a new blood flow when an arterial route becomes clogged, new media will find new distribution pathways to avoid any “clogs” in a metaphorical sense. Distribution pathways are no longer proprietary.

Think about it. Not too long ago, you needed a television set and a microwave relay signal to enjoy a television program. Now? That same program can be distributed over the air, via cable or satellite (live, DVR or on demand), on Hulu or perhaps through the .com version of the network. You could also possibly download the program through iTunes or order up a DVD or video stream from Netflix.

What about newspapers and magazines? You can still get them “on paper” delivered to your door. Or you can still find a newsstand and buy a single copy. But you can also read the e-version on your computer screen. Perhaps you will download an app that lives on your Kindle or your iPad. You can even get versions of this content served to your mobile phone!

What happened to the distribution pathways for music? We used to be limited by the bandwidth of the AM and FM spectrum. Not anymore. Now music travels via satellite and digitally. We can listen on radios, computers, televisions, MP3 players and our mobile phones. The distribution pathway doesn’t matter much anymore. The consumer has multiple choices.

–Judy Franks, The Marketing Democracy judyfranks@themarketingdemocracy.com. This article is an excerpt from her new book “Media: From Chaos to Clarity”: www.themarketingdemocracy.com/downloads.

Become Pickier

Tuesday mornings at 7am I add another chapter to the book I am writing that covers my own thoughts on the subjects you read here on Collective Wisdom.

You can go here to read the Not-So-Secret Writings of ScLoHo.

Click here: http://www.scloho.info/

Here’s last weeks chapter:

Say No before you Say Yes


Over eight years ago I joined the company now known as Summit City Radio. This was my second venture into radio advertising sales, and I knew what needed to be done as I had been the the radio business since my teen years.

I started out with high standards as far as what I would accept as an ideal client and my first two were exactly what I was looking for.

Then I started to expand and try a few other ways to work with advertisers and my business grew and grew and I was very busy.

Problem was, some of my clients were not fitting my ideal client profile and they either required more work or they failed to get the results they were looking for. Sometimes both.

Over the years, I’ve become pickier.

Every month I tell people that my radio stations are not the best choice for what they are trying to accomplish.

Actually, what I usually do is advice them on what they need to do with their business in order to be prepared to handle what will come from the radio advertising.

Usually that means they need to get their “house in order” so they can handle new customers properly.

Advertising and Marketing will only amplify all that is wrong with your business.

Say No to promoting your business until you are really ready, but don’t delay either.

Every day that passes is a day that your potential customers are spending their money with your competitors.

I Can Name that Brand in 6 Words

When I started in the advertising business, one key concept was to develop a Unique Selling Proposition which was the Brand Identity.

Drew gives his perspective:

Taglines that stick

Posted: 05 May 2011 02:53 PM PDT

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I think most taglines used by businesses today are a cop out. They feel good but promise nothing. A reader wrote and asked if I’d talk about the other side of the coin – what makes a tagline great?

Creating and using a strong tagline takes real courage. A tagline that will last for decades is one that makes a bold statement or promise.

So what do you need to consider as you evaluate your own tagline?

A strong tagline makes someone take pause. It might be the person it’s directed at like – Just Do It. Or it might be the employee who has to keep the promise – when it absolutely positively has to be there overnight.

A memorable tagline should be a bit daunting. That’s why it’s impressive. If BMW has told us their cars were a nice ride, would you have remembered? But who doesn’t want to drive the ultimate driving machine? Talk about setting high expectations!

An enduring tagline is tied specifically to the product/service: Another element of a strong, test of time tagline is that we connect it to the company who owns it. We don’t remember it just because it’s clever. We remember who said it. Take this little quiz. Who told us “you deserve a break today” or promised us “we try harder.”

This is where the generic taglines about “our people” and quality lose their steam. Who doesn’t believe they provide good quality and that their people are dedicated to their jobs?

A memorable tagline tells a story: In a single sentence, we got the picture when Timex told us “it takes a licking and keeps on ticking.” We can only imagine what might happen if forgot the warning “don’t leave home without it.”

We learn through stories. We teach lessons through stories. And we buy and sell around stories. It’s much easier for us to remember a story than straight facts. Which is why a story telling tagline sticks.

A powerful tagline points out how the product/service is unique: Who doesn’t know the unique advantage of an M&M? They “melt in your mouth, not in your hand,” right? The Marine’s tagline reminds us that they’re very choosy about who they let into their club. “The few. The proud. The Marines” lets us know that there’s exclusivity to their brand.

Everyone wants a strong tagline but most businesses are afraid to make a bold promise. What happens if it doesn’t get there overnight? Or if the watch breaks?

Good marketers understand that a tagline is not an absolute. Sure, every once in awhile you’re going to miss the mark. But how you handle it when you fall short is part of the brand promise too.

The Importance of Your Name

As parents we have the awesome power to name our offspring.

Last weeks update on the Not-So-Secret Writings of ScLoHo talked about the awesome power of our business name:

The Name Game


Last month I was reading on a subject that I’ve thought about off and on for years:

The significance of your business name.

Our parents are responsible for our given names, we are responsible of the name of our company, product or service.

Look at a few big names:

Ford. The company founded by Henry Ford was the only major automaker that did not take bailout money from the government a couple years ago. They remain strong. Their name is good. We all think of cars and trucks when we here the name Ford.

I.B.M. Do you know what those letters stood for when the company was founded over 100 years ago? Click here for the answer.

Let’s look at food. McDonald’s was pretty much a 1 location hamburger joint in California until Ray Kroc took over from the two brothers and spread the McDonalds name across the globe.

My grandparents started some businesses in New England include a restaurant, Howard’s Restaurant that went thru three generations before it was sold to a long time employee who kept the name due to the value of the name.

Remember that phrase, the value of the name.

Locally, we have a place called Calhoun Street Soup, Salads and Spirits. Nice place, good food, but they are stuck… on Calhoun Street. They could go the IBM route, and start using their nickname CS3, and open additional locations in the future.

Some business names are self centered and tell you nothing about who, what, or why a business exists. Brian Smith Corp. Sally’s. JP Enterprises. I’m sure you can find a few in your town like this too.

You need to pick a name that creates a brand and allows for future growth.

Are you creating a business that you will want to sell off one day? It might not be wise to use your name. Very few Howard’s Restaurants survive when the family is out of the picture.

One more thought on the subject of business names.

Make one up.

Throw some letters together.

Make sure it is pronounceable.

Have a reason for the name too.

Google did that.

So did Yahoo!

ScLoHo was just an email address based on my first, middle and last names. Take the first two letters of each and you get a ScLoHo.

Use it enough and it becomes a personal brand. Add a couple of descriptive words and file the paperwork and you have a business. ScLoHo Marketing Solutions.

Do enough marketing and you grow.

What are your thoughts on this whole business name subject?

picture of my grandparents Mr. & Mrs Vern Howard who passed away in the 1950’s