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    Published on: February 21, 2007

    Content Guy’s Note: We get a ton of business books sent to us at MNB World Headquarters – so many, in fact, that it is difficult to figure out which ones deserve attention and which ones do not.

    This one does. Definitely. Because it not only hits the ball out of the park in terms of its message, but also offers concrete examples that can be emulated.

    But because we know some of the businesses and personalities profiled in the book, we wanted to get a more objective opinion…so we turned to Kate McMahon Upson, a former staff reporter at Money and reporter/editor at the New York Daily News, and asked for her expert assessment.


    At first glance, tales of regular folks striking it rich by peddling bicycles, manufacturing sports socks, scooping ice cream, baking cookies or running the family supermarket would appear to be more rooted in nostalgia than reality.

    But such real time success stories are at the heart of author Donna Fenn’s lively and informative new book, Alpha Dogs: How Your Small Business Can Become a Leader of the Pack (Collins, $24.95).

    Fenn, a 20-year-veteran of Inc. Magazine, focuses on eight entrepreneurial ventures, all low-tech, established start-ups that with under $100 million in sales and impeccable reputations. Her profiles are eminently readable, and each case history provides practical, how-to advice from the founder and further commentary from other established entrepreneurs.

    But this is not just a manual for a would-be mini-mogul. In fact, it should be recommended reading for anyone actively involved in starting, running or nurturing a business, from a sole proprietor to the CEO of a multi-national company.

    Fenn zeroes in Alpha Dog DNA: passion, a zealous commitment to customer service, community involvement and employee development, a willingness to take on Goliaths (i.e. Wal-Mart, eBay, Kroger’s) and an urgency to continually reinvent and grow their businesses.

    “Companies make the leap from ordinary to extraordinary when their leaders step back from what they do and focus on how they’re doing it,” writes Fenn, whose command of the subject matter is impressive throughout the book.

    In a chapter titled “Seducing Customers,” we meet Chris Zane, who was a 16-year-old fixing bikes when he got into the business in Branford, CT. Founded in 1981, Zane’s Cycles now has revenues of $6.1 million ($4.4 million in corporate sales, $1.7 million in retail) and is one of the biggest bicycle dealers in the country.

    Zane knew he could not beat the competition on price alone, so when Wal-Mart rolled into town in 1996, he ratcheted up his customer service efforts, stretching his one-year service guarantee to a lifetime service guarantee, as well as 90-day price protection, a coffee bar and numerous other perks.

    “Wal-Mart gives you the kick in the pants you need to get to the next level,” says Zane. “And if you don’t want to get to the next level, you shouldn’t be in business.”

    Meanwhile, in Dayton, Ohio, Norman Mayne steered his family-owned Dorothy Lane Market Inc. out of bankruptcy in 1967 and into a three-store juggernaut that is the city’s premier upscale food outlet with revenues of $60 million, and a nationally-recognized specialty food store. His profits have run as high as 4 percent, which is more than double the industry average.

    Mayne’s secret weapon? His employees, and a sophisticated, top-to-bottom employee training program that starts at the first job interview and doesn’t quit. He credits his 250 full-time and 457 part-time employees with giving him the loyalty, ingenuity and flexibility to compete with the Goliaths in his industry. “We focus on creating faster than the competition can steal,” says Mayne.

    Among the other highlights:

    • The profile of Jim Throneburg, CEO of Thorlo sport-specific socks, revenues of $40 million, based in Statesville, N.C. Throneburg does not see Thorlo as just a sock maker, but rather an innovator in the “foot protection business.” He “aha moment” occurred when he figured out that adjusting the amount of padding in the sock eliminated his foot pain, and his product was transformed.

    • Life in the kitchen with Trish Karter, a co-founder of Boston-based Dancing Deer Baking Company, with revenues of $5.8 million and a case study in establishing a brand and maintaining integrity while taking it national. The reader can practically taste her Deep Dark Gingerbread Cake.

    • More taste treats await in the chapter on Amy Simmons, founder of Amy’s Ice Creams, 12 parlors, all in Texas. The magic ingredient to her success, and $5.3 million in revenues, was establishing Amy’s as a hometown business and becoming an integral part of the community. That, and the Key Lime Pie ice cream.

    Fenn’s book is a well-researched, enjoyable read that provides plenty of winning strategies for those aspiring to Alpha Dog status, or simply running a better, more responsive and innovative business.
    KC's View:
    Buy this book. (You can it at a 30 percent discount on Amazon.com.) But if you do so, be prepared to take its lessons to heart, and put them into action. Because just giving them lip service isn’t nearly enough.

    Published on: February 21, 2007

    Activist group and self-described “organic watchdog” The Cornucopia Institute announced yesterday that it is filing a lawsuit against the US Department of Agriculture (USDA) in federal court, “accusing the agency of ignoring the organic regulations, and the intent of Congress, by their failure to enforce the law.”

    The Institute accuses USDA of not cracking down “on an increasing number of industrial-scale factory-farms that are producing ‘organic’ milk,” specifically referring to “two major agribusiness corporations, Dean Foods and Aurora Dairy. Dean's Horizon brand and private-label milk produced by Aurora (marketed by Safeway, Wild Oats, Trader Joe's, and Wal-Mart, among others) have gained a dominant market share, estimated to be as high as 70%, by ramping up production on feedlot dairies milking as many as 2000 to 10,000 cows.”
    KC's View:
    Fine. Let it go to court. Let the burden of proof fall to the Cornucopia Institute, and if it can make its case, then USDA will have to ramp up its enforcement. If not, the Institute will have to shut up.

    All we know is this. As consumers, we only care that organic standards are being adhered to. We don’t give a damn whether the farm s small or large, family or corporate owned.

    Published on: February 21, 2007

    The Seattle Post Intelligencer reports that as Seattle’s downtown population grows and residential building continues to expand, convenience stores in the city are expanding their selections of fresh and prepared foods to cater to these new customers. This is more than mere opportunism; it also is a recognition that there are few major supermarkets in the downtown area, creating an enormous opportunity for c-stores.
    KC's View:
    Good for the c-store. Now, we’ll be interested to see if mainstream chains are able to compete for this business, perhaps by coming up with new and smaller formats that can serve as satellite locations in neighborhoods where there is no room for a full-sized store.

    Published on: February 21, 2007

    Forbes reports that “the first major changes to food inspection in a decade will increase federal scrutiny of meat and poultry plants where the danger from E. coli and other germs is high or where past visits have found unsafe practices.” In other words, plants with a bad history will get more attention than those with a positive record.

    "We're just putting resources where the risk is greatest, and those plants that demonstrate excellent control will get less of our resources," says Richard Raymond, the Agriculture Department's top food safety official.

    But not everybody is convinced.

    "One of the concerns is that this is simply an effort to save money in a tight budget year," says Caroline Smith DeWaal, food safety director at the Center for Science in the Public Interest. "We want to make sure a budget shortfall is not what's driving these important inspection decisions."

    USDA’s Raymond, however, denies that this is an economy move.
    KC's View:
    One of the things that worries us about the new USDA approach is the suggestion that eventually, plants with a consistently clean record will not be inspected at all and will be able to have “virtual inspections.”

    Not a good move, we think. There’s no such thing as “virtual oversight,” and this possibility certainly sounds like an economy move to us.

    Quite frankly, USDA has a tough enough job getting things right when it actually does things – as opposed to virtually doing things. Not showing up at all might work better for USDA , but we’re not sure it does the job for taxpayers and consumers.

    Published on: February 21, 2007

    Forbes reports on a new study conducted by Northwestern University's Kellogg School of Management, revealing that consumers perceive products that emphasize a single attribute as superior to those offering all-in-one attributes, especially if they tend to be priced at roughly the same level. The only time they tended to trust products with multiple attributes more, according to the study, is when that item costs more money.

    Marketing Professor Alexander Chernev tells Forbes that “his conclusions about consumer perception of individual products could be extended to brand names: Companies branching out from a single specialty into multiple product lines run the risk that customers won't think they are as good at their core competency.”
    KC's View:
    Interesting. Though we’d have to say as a consumer, we wouldn’t necessarily agree with the conclusion about brand names. If we trust a particular company on one item, we tend to extend them the benefit of the doubt and trust them on anything they make. Until, of course, they screw up. (And then not only do we stop trusting them and tell our friends, but we also expose them to ridicule on MNB.)

    As for the single attribute vs. multiple attributes debate, the conclusions there don’t surprise us…not since we were told in college that copious amounts of beer would make us thinner, smarter and irresistible. Talk about going zero-for-three…

    Published on: February 21, 2007

    The Boston Globe reports that there is a move afoot in Massachusetts to make retailers legally responsible for any costs associated with losses incurred when there are security breaches that put their customers’ credit card and debit card data at risk.

    The call, by the Massachusetts Bankers Association, follows the revelation over the weekend that Ahold-owned Stop & Shop was working with federal investigators to determine how many consumers may have had their credit and debit card data stolen by high-tech thieves who apparently broke into checkout-line card readers at a half-dozen stores.

    “What happened at Stop & Shop is another example of retailers not doing enough to protect consumers," Massachusetts Bankers Association's spokesman Bruce E. Spitzer tells the Globe. "If companies know they'll be responsible for every expense caused by a security breach, maybe they'll finally invest in better security."

    However, the Retailers Association of Massachusetts objects to the proposal, which has been offered up in the form of legislation by State Rep. Michael A. Costello (D-Newburyport), saying that it would add needless new expenses -- pumping up bank profits, not protecting consumers.
    KC's View:

    Published on: February 21, 2007

    A new report entitled “The Power of Meat — An In-Depth Look at Meat Through the Shoppers’ Eyes,” released at the 2007 Annual Meat Conference this week in Orlando, revealed that while demand for natural and organic meat crossed the 20 percent milestone - with 21.2 percent of the shoppers surveyed saying they purchased these products in the past three months, up from 17.4 percent in 2006 – price continues to restrain sales of these items, with 63.0 percent of shoppers saying they would buy more of these products if the prices were more in line with those of conventionally produced meat.

    According to the study, chicken is the most popular natural and organic meat, purchased by more than seven in 10 shoppers (73.2 percent) in the past three months, followed by beef (50.7 percent) and ground meat (31.0 percent). And, more than 48 percent of shoppers are buying these organic products from traditional supermarkets, or twice as many as are buying them from natural and organic stores.

    The research shows that five beliefs motivate at least four in 10 shoppers to buy these products:

    • Better health and treatment of the animal, 44.0 percent.
    • Better nutritional value, 43.0 percent.
    • Better taste, 42.0 percent.
    • Positive long-term health effects, 41.9 percent.
    • Freshness, 41.9 percent.
    KC's View:

    Published on: February 21, 2007

    • The Los Angeles Times reports that as expected, France’s Groupe Casino has sold its Smart & Final chain, based in Southern California but also with stores in five other Western states and northern Mexico. The buyer: the New York private equity firm Apollo Management. The price: $813 million.

    Etienne Snollaerts, president/CEO of Smart & Final, tells the Times that he expects a new burst of capital to allow the 254-store chain to expand more rapidly than it has of late; Casino has been looking for a way to reduce its debt, and announced nine months ago that it would consider strategic alternatives for the chain.

    Smart & Final, founded in 1871, serves both small restaurants and businesses as well as consumers who want a warehouse club experience (albeit a far smaller one than Costco offers) without the membership fees.

    Advertising Age reports that Anheuser-Busch is under attack by the Attorneys General of 21 states who say that the company’s Bud TV website is “too easily accessed by people below legal drinking age.”

    A letter to A-B signed by the government officials reads, in part: "We feel strongly that since you are creating the programming and controlling the internet-based network, not just advertising on it, you have a higher responsibility to ensure that youth are not exposed to the marketing on your site. We fail to see how your use of age verification on the Bud.tv site is a genuine attempt to keep youth from accessing the site's content."

    Anheuser-Busch has responded that it has taken “extraordinary steps” to keep underage users off the site, but also called on parents to better monitor their kids’ Internet usage.

    Crain’s Chicago Business reports that “McDonald's Corp. is overhauling its kitchens to speed up and expand its breakfast service, a move many franchisees see as a prelude to all-day breakfast.”
    KC's View:

    Published on: February 21, 2007

    • Wal-Mart said that its fourth quarter profit was up 9.8 percent to $3.94 billion, compared to the same period a year ago. Sales were up 11 percent to $98.1 billion, on same-store sales that were up just 1.6 percent.

    The company attributed much of its good news to strong performances by its Walmex unit in Mexico and its Asda unit in the UK.

    • Winn-Dixie reported a second quarter profit that was up 21 percent to $286.8 million from $237.5 million in the prior year's quarter. Sales rose 9 percent to $1.16 billion from $1.07 billion in the second quarter of 2006, with same-store sales down 0.5 percent.

    However, Winn-Dixie also said that in the first eight weeks of the quarter – before it emerge from bankruptcy protection - it earned a profit of $296.7 million, and then recorded a $10 million loss in the second eight weeks of the quarter.
    KC's View:

    Published on: February 21, 2007

    …will return.
    KC's View:

    Published on: February 21, 2007

    Consumers ain’t what they used to be. So why are you marketing to them using time-worn techniques, speaking to them in an obsolete language, and offering them a shopping experience that may not be relevant to their needs, desires and lives?

    In this new presentation, based on his extensive reporting, conversations with some of the world’s best retailers, impressions gleaned from two decades of traveling the world, and the news and commentary he writes every day on MorningNewsBeat.com, Kevin Coupe has identified five critical insights about consumers that you need to integrate into your business plan. Now.

    And Kevin is ready to bring his “Five Consumer Insights” presentation to your conference or convention.

    Just call 203-662-0100, or email: kc@morningnewsbeat.com .

    COUPE COMMUNICATIONS
    Where Big Ideas Mean Business

    KC's View: