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    Published on: November 18, 2009

    by Kate McMahon

    When I logged on to my Facebook page last week, there was a post from Starbucks that summed up the reach of social networking in three short lines:

    “We just passed 5 million fans on Facebook. We just want to take a moment to say thank you. We're honored and humbled.”

    And clearly on a roll, having signed on an additional 44,109 fans in the past week. There is only one company, in fact, with a larger presence on Facebook - and that would be Facebook itself, with 5,734,989 followers.

    While Michael Jackson reigns as the King of Facebook fan pages with more than 10 million “fans” (trailed by Vin Diesel and Barack Obama), the ranks of corporate success stories include Coca-Cola, Pringles, Adidas, Red Bull, Nutella and In-N-Out Burger (my family’s favorite burger).

    For readers unfamiliar with Facebook nomenclature, personal pages count “friends” while pages sponsored by brands or other groups count “fans.” (On a related note, the Oxford English Dictionary yesterday named “unfriend” the 2009 Word of the Year. Wonder what Nathaniel Hawthorne would have thought have made of that particular word...)

    Facebook re-launched its fan pages earlier this year, making it much easier to get in the game. But once you create a page, the key is to get your followers to sign on and remain engaged. This is where social networking changes the traditional relationship between a retailer/manufacturer/service provider and a consumer. It becomes a two-way street, and this dialogue allows “fans” to cheer what they like and jeer what they do not. Notable marketing missteps aside, there more cheers and “thumbs up” responses on these pages. And if your customers are jeering, you hear their complaints immediately and have the opportunity to respond.

    Starbucks’ page serves up a masterful social media blend of product news, reviews of new music or books for sale at its cafes, the occasional coupon or discount, and reports on its charitable efforts. A recent post prompted 4,150 “thumbs up” and 439 comments.

    The Coca-Cola page, with 3,997,137 fans from around the globe, celebrates the iconic product. The original page was created by “Dusty and Michael, just two guys who love Coca-Cola.” Rather than trying to buy them out or create a competing official page, Coke partnered with the two fans, and one click reveals a wall of videos and photos posted by fellow aficionados.

    Humorous videos set the tempo of the Pringles page (2,788,587 fans). The videos are light-hearted and comedic, thus more likely to “go viral” and be shared with others.

    And in the know-your-demographic department, Red Bull (1,625,119 fans) has clearly fashioned a page geared to its young, hip customer base, and even goes so far as categorizing itself under the business-type “pharmaceuticals.” It also integrates Twitter feeds from its sponsored athletes such as snowboarder Shaun White to maintain the action on the page.

    What do these pages have in common? (And many of you drinking your morning coffee may have noticed that three of these four case studies are fueled by caffeine). Actually, the key ingredient is conversation, which leads to a sense of community and brand loyalty. It’s enough to make you a fan.

    The question is, are you willing and able to enable and embrace that conversation. If so, it will allow you to engage with customers in a new way, changing the essential nature of the relationship that can be positive for both sides. If not ... well, the risk is growing irrelevance to shoppers who do not want to play by the same old rules.

    You decide.

    You can reach Kate McMahon via email at kate@morningnewsbeat.com .
    KC's View:

    Published on: November 18, 2009

    The Des Moines Register has a nice profile of Hy-Vee, noting that CEO Ric Jurgens believes strongly that the company’s decentralized structure - with each store operating essentially as a separate business unit - has made it better able to cope with an economic downturn than some competitors.

    "I think our people reacted firmly and swiftly (with sales and new ideas) to help people deal with financial issues that are affecting their families," Jurgens tells the paper. "This is one of those times when our system serves us well, because we're able to respond to needs at the customer level rather than at the corporate level."

    This means that Hy-Vee has been able to grow in tough times: “The West Des Moines-based chain added roughly 1,500 jobs in a fiscal year that ended with national unemployment closing in on 10 percent,” the Register writes. “It now finds itself early into the second phase of a five-year plan to spend roughly $1 billion on new stores, relocations and remodels. The money will include some environmental improvements and modernization of existing stores but also some expansion into markets Hy-Vee feels like it understands.”

    Jurgens says that most of these stores will be traditional supermarkets, though the company continues to play with a small store format that he says needs to be ready to go if that;s what customers demand.

    It is this sensitivity to shopper priorities that has convinced Hy-Vee to be progressive about environmental issues, healthy choices, and nutritional labeling in its stores ... all things that have allowed a company that operates so-called “traditional supermarkets” to transcend that label.

    "We do an awful lot of things out of intuition at our company," Jurgens tells the paper. "We're not afraid to invest in our customers in a way that the payoff may be to them more than to us ... As long as it's not destroying our bottom line, there's no downside to doing any of this."
    KC's View:
    They don’t come any smarter than Ric Jurgens and Hy-Vee. Simple as that. But what always has impressed me about Hy-Vee is the level of passion that pretty much everybody who works there feels about their company and their mission. That’s an enormous advantage.

    One other thing. Some companies look down on customers, and management looks down on employees. At Hy-Vee, it always has been my sense that people look up at the people on the front line, and look up at customers. Which is a very importance difference.

    Published on: November 18, 2009

    An online survey conducted by CareerBuilder.com reports that nearly a quarter (23 percent) of retail employees surveyed “rate their organization’s current employee morale as low. Additionally, 42 percent of retail workers, the highest of all industries surveyed, report that they have had difficulty staying motivated at work in the last year and more than a quarter (28 percent) do not feel loyal to their current employer.”

    In addition, the report says that “workers revealed a variety of factors that may be contributing to low morale levels. Half (48 percent), the highest among all industries surveyed, said that their stress level at work is high and more than half (52 percent) said that their workload has increased in the last six months. A quarter (24 percent) is dissatisfied with their work/life balance.

    “More than two-in-five (42 percent) retail workers said they felt there was departmental favoritism at work, which could also play a part in low morale levels. Thirty percent of retail workers don’t think their department is important to senior leadership.”

    So-called “favored departments,” or those that workers say are important to senior leadership, tend to have the following components: work schedule flexibility, higher salaries, greater recognition by management, casual dress codes, greater funding, and more career advancement and training opportunities.
    KC's View:
    These may not be universal complaints and preferences. But every leader/manager ought to at least consider the possibility that his/her employees may share at least some of these feelings.

    Published on: November 18, 2009

    The Issaquah Press reports that the Issaquah City Council has voted to ban polystyrene takeout containers and other food packaging made from the material. According to the story, “The ban will go into effect in October 2010; restaurants, grocers, public schools and other food sellers will be required to comply by May 2011.”

    Similar bans have been approved in Seattle and Portland.

    The Press reports that “polystyrene - also known under the trademark Styrofoam - is a popular option at restaurants and grocers because the material is cheaper and hardier than compostable alternatives. Critics said the polystyrene lingers in landfills long after Styrofoam trays and cups are tossed into the trash. The material is expensive to recycle as well.”
    KC's View:
    Some will argue that in tough economic times, such bans are an unnecessary burden on businesses. But in the long term, trying to undo the damage we’re doing to the planet - and I’ll even use the phrase “fragile planet” that tends to annoy a certain percentage of the MNB population - could be a lot more expensive. There have to be smarter and more environmentally intelligent approaches to packaging ... and it is incumbent on the industry to find them and support them.

    Published on: November 18, 2009

    Bloomberg reports that Whole Foods CEO John Mackey says that in the future, he will only consider acquisitions that won’t require the approval of federal antitrust regulators.

    “I don’t want to make any acquisition that requires the government to approve it ever again,” Mackey tells . “Mom-and-pop-type chains will be the type of acquisitions we do in the future. I don’t anticipate any large acquisitions.”

    The Wild Oats purchase in 2007 was challenged by the Federal Trade Commission (FTC), which continued to press its case even after the courts cleared the way for the $565 million takeover to occur. Earlier this year, Whole Foods settled with the FTC, agreeing to sell 32 stores to resolve the dispute.
    KC's View:

    Published on: November 18, 2009

    The Los Angeles Times reports that “recent heavy rains in the Midwest are putting pumpkin pie in short supply this holiday season. On Tuesday, food giant Nestle, which controls about 85% of the pumpkin crop for canning, issued a rare apology and said that rain appeared to have destroyed what remained of a small harvest this year and that it expected to stop shipping the holiday staple by Thanksgiving ... Nestle says that once it runs out, it won't have more pumpkin to can until August, when the 2010 harvest starts.”
    KC's View:

    Published on: November 18, 2009

    • Walmart said yesterday that it will continue to explore opportunities in Russia, despite the fact that Stephen Fanderl, who was running its office there, resigned to explore “other opportunities.” Speculation is that Fanderl may have resigned because he was unable to make any headway for Walmart, and the company wanted to make a change.
    KC's View:

    Published on: November 18, 2009

    Dow Jones reports that Ahold plans to launch a $500 million cost cutting program “aimed at cutting costs such as store expenses and those in the supply chain.”

    • The New York Times reports that Hershey and the Italian chocolate maker Ferrero are talking about possibly making a bid for Cadbury that would rival - and perhaps trump - the $16.7 billion hostile takeover bid for the company launched by Kraft.

    • The Atlanta Business Chronicle reports that Coca-Cola’s “new, recyclable plastic bottle made partially from plants -- the ‘PlantBottle’ -- is hitting store shelves globally ... The new bottle is made from a blend of petroleum-based materials and up to 30 percent plant-based materials through a process that turns sugar cane and molasses, a by-product of sugar production, into a key component for PET plastic. Traditional PET bottles are made from petroleum, a non renewable resource.”

    • The Seattle Times reports that Starbucks has opened another non-Starbucks coffee shop there - a Tudor-style cafe called Roy Street Coffee & Tea. The unit, like one that it opened on 15th Avenue, is “inspired by Starbucks” but has a more individualized decor and menu, and also sells wine, beer, sandwiches and cheese plates. It is part of an effort by the coffee giant to develop new stores with a more local flavor in various locales.

    Crain’s Chicago Business reports that SC Johnson & Co. is considering a bid to acquire Sara Lee’s household care business, which includes air fresheners, insecticides and shoe polish. The paper says that a deal could be for more than $700 million.
    KC's View:

    Published on: November 18, 2009

    • Target Corp. said that its third quarter profit rose to $436 million, from $369 million during the same period a year earlier. Q3 sales rose 1.4 percent to $14.79 billion, on same-store sales that were down 1.6 percent.
    KC's View:

    Published on: November 18, 2009

    • Marc Bolland, CEO of William Morrison Supermarkets in the UK, reportedly will be the new CEO of Marks & Spencer, succeeding Sir Stuart Rose, who will remain with the company as non-executive chairman until July 2011.
    KC's View:

    Published on: November 18, 2009

    MNB yesterday took note of a Washington Post report that almost 50 million US citizens - including one out of every four children - had periods during the past year when they went hungry. According to the story, “The data show that dependable access to adequate food has especially deteriorated among families with children. In 2008, nearly 17 million children, or 22.5 percent, lived in households in which food at times was scarce -- 4 million children more than the year before. And the number of youngsters who sometimes were outright hungry rose from nearly 700,000 to almost 1.1 million.”

    My comment, in part: Not sure how we can have a sophisticated and contextual discussion about issues like health care and economic policy in an era when the world’s biggest superpower cannot even feed its own population.

    One MNB user objected to my response:

    That's the mentality that will make things steadily worse.  Wouldn't it be smarter to focus on the "population's" responsibility to feed itself instead of constantly portraying them as helpless victims?

    Perhaps what I should have said is, what is so super about a superpower in which there is so much economic weakness that this kind of hunger exists? It is not government’s responsibility to feed people...except in the sense that government ought to be an extension of a people’s priorities. After all, as has been said in various venues by a variety of people, a civilization ought to be judged by how it treats its most vulnerable...and who is more vulnerable than a hungry child?

    Another MNB user wrote:

    Here lies the premise for this discussion. Is it the responsibility of the federal Government to feed the children of parents who are not performing that basic responsibility?

    The current welfare program has become an entitlement program where these recipients actually feel it is their just dues to receive assistance. Like the 40% or so of US citizens who never pay taxes feel they deserve to receive a tax cut. If you never pay anything how can a portion be returned? Impossible, yet they have been convinced that they deserve it.

    Continuing to “hand out” entitlement to those who are willing and able to survive on their own only creates and supports this sad situation. The really sad thing about this whole entitlement mentality is the fact that the recipients actually believe they deserve it. The current socialistic mentality that everyone deserves to have the same quality of life as everyone else is so anti American.


    Gee, I thought we were talking about finding a way to keep so many Americans - especially children - from going hungry. I didn’t know I was encouraging incipient socialism.

    My bad.

    MNB user Jeff Totten wrote:

    As I grab the remote control in an effort to mute the anti health care reform ads and feel my blood pressure rising, I wish I had tons of money to run anti anti-ads, then remember that even my retaliatory efforts would be a waste of money.  What calms me (somewhat) is the thought - look at how many people could be fed by all that money being spent on those ads.  God must weep at our waste of resources He has blessed us with.

    Another MNB user wrote:

    Your response to “Hungry in America” was spot on…as I was reading the article, I was wondering how many of the hungry people could have been fed by the bonuses paid employees of bailed out financial institutions.

    MNB user Steve Mowcomber wrote:

    The failure to feed our own people and poor children is exactly why we need to discuss health care as household dollars that could be spent on food are being spent on health care when an impoverished mother or father are forced to make the awful decision between putting food on the table or taking a sick child to the doctor or purchase medications needed by themselves or their children.  Solving the health care dilemma “should” open up household dollars to be redirected to solving the hunger issue as well or go a long way towards solving the problem.

    And MNB user E. Jane Hayden chimed in:

    As an employee of Feeding America, the nation’s food bank network, I could not agree with you more.  It is unfortunate that food has become a luxury item for so many; having to choose between paying a utility bill or buying medication instead of food.  When will our legislators wake up?




    On to another issue...

    Responding to our story about Costco not carrying Coke products for the moment because of a pricing dispute, MNB user Carol Cropp wrote:

    Costco without Coke?

    Went to a sports bar to watch football and ordered a Bud Light — they don’t carry Budweiser products anymore?  Really?  Gotta find a new sports bar.

    Most people are loyal to one brand of soda — I’m a Diet Coke person.  Really don’t like Diet Pepsi.  Consumers will complain and Coke will be back in Costco before the holidays.


    I agree that this dispute probably won’t last long.

    But there may be something going on here other than a simple pricing dispute. While I take your meaning about brand loyalty, I think when a company like Costco does this, it sends a clear message that it is advocating for the consumer. (Though it probably is advocating for its own margins as well...which is why some might characterize its actions as bullying.) That’s not a bad message to send to shoppers...especially in tough economic times.




    One of the things I love most about the MNB community is the fact that I get so many emails about the small stories that aren;t even about business. Like yesterday, I noted in a short obit now much I liked the old TV series “The Equalizer,” which starred Edward Woodward, who died earlier this week. Woodward also was in Breaker Morant, which prompted MNB user Lou Scudere to write:

    Breaker Morant is definitely one of my all time favorite movies right up there with The Caine Mutiny and A Few Good Men.

    FYI...The Caine Mutiny gets a chapter in The Big Picture: Essential Business Lessons From The Movies, the new book from Michael Sansolo and me.

    MNB user Gary Harris wrote:

    And at this festive time of year, we recall his portrayal of the Ghost of Christmas Present to George C. Scott’s Scrooge a few years back.

    Good one. I liked that version a lot.

    And MNB user Steven Ritchey wrote:

    I liked Edward Woodward’s show “The Equalizer” also.  He was a different kind of vigilante, sort of a modern day Paladin of “Have Gun Will Travel”  He lived well, enjoyed life and was well traveled and well educated, yet could and would use lethal force when necessary, but didn’t kill for fun, only when there was no other choice.  It was entertaining, yet had some life lessons in it as well and the choices Robert McCall had to make were often not black and white choices, but was forced to choose the best or least distasteful among some conflicting decisions.

    Sort of like the Content Guy. Except he uses a laptop, not a gun....and a Miata, not a Jaguar...but other than that, it’s the same thing...

    Sort of.
    KC's View: