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    Published on: September 23, 2010

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    Hi, I’m Kevin Coupe and this is MNB Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

    Sometimes, little things happen that give you the sense that a company’s culture is eroding. It may not mean the end of the company, not anytime soon, but maybe you get the sense that a core value has somehow been lost, or hasn’t been properly or effectively communicated through the ranks.

    That’s the sense I got last week in my dealings with FedEx. And I think the scenario is illustrative of something larger, and perhaps can serve as a metaphor from which other businesses can learn.

    Let me explain.

    On Thursday, I needed to get a package to a client so they’d have it by end of business on Friday. So I packaged the information up, slipped it into a FedEx envelope, filled out the form, marked it for Friday-by-3 pm delivery, wrote in my FedEx account number, and deposited it in the local FedEx box well before the last pickup of the day.

    On Friday at about 2 pm, I got a call from the client, gently inquiring if I’d been able to send the package as planned. I was a little surprised by this, and immediately went online, going to the FedEx website to track the package. To my considerable surprise, it apparently was sitting in Memphis, Tennessee, in the FedEx hub there.

    Now I was even more surprised, but figured that maybe the computer was wrong. So I called the FedEx 800 number to find out what was going on, and was instantly treated to one of those circular experiences during which it seems almost impossible to talk to a live human being. However, I figured out - and this is a tip for the future - that if you mumble and the machine can’t figure out what you;re saying, they transfer you to an operator. So I mumbled.

    The operator to whom I spoke did some quick checking, and reassured me that yes, the package indeed was in Memphis and would be delivered on Monday. When I informed her that I had listed it - and paid - for next day delivery, she did some more checking and informed me that because President Obama was in New York the previous evening, airport traffic had been clogged, the truck had not made its connections, and therefore had not gotten to the plane on time. “It wasn’t our fault,” she said.

    Now, I wasn’t really annoyed by this, though I did think was a little unfair to blame Obama. After all, you can call him a Muslim, a Socialist, a radical, or any number of other things...but it didn’t seem quite fair to blame him for my package being delayed.

    So I said to her, “But it wasn’t my fault, either. And I absolutely, positively wanted it to get there overnight.”

    She didn’t seem to get the reference. “Nothing I can do, sir,” she said.

    I realized that the place to which I was sending the package was not open on Saturday, so I asked if she could change the listing so it would be delivered first thing Monday morning (which would actually be in plenty of time for the client...I’d gone for Friday delivery to be safe).

    No, she said, I’d only paid for afternoon delivery, so that’s what I was going to get.

    Now I was getting annoyed.

    How about a break on the cost? Maybe to the two-day delivery rate?

    No, she said. Can’t do that either.

    I spent a few minutes trying to reason with her, but frankly found the whole experience to be frustrating. But I decided to give it one last try.

    “It seems to me that you have three choices,” I told her. “I just want to clear about which one you are choosing. I paid for a specific service, that you did not deliver - to have a package absolutely, positively delivered overnight. (Again, she didn’t seem to get the reference.) You could choose right now to make sure that the package gets delivered first thing Monday morning, but you’re not making that choice...even though, since there are probably numerous trucks going in that direction on Monday, it would cost you almost nothing. You could choose to give me a break on the price, which might cost you as much as five or ten dollars, but you’re not making that choice, either.

    “No, you are choosing to leave me - a customer who regularly uses your service - dissatisfied with the whole FedEx experience...enough so that next time I have a package that absolutely, positively delivered needs to get delivered overnight, I’m going to think about UPS, or even the Post Office, or any one of the other overnight services that are out there. Are you sure you want to make that choice?”

    The answer, basically, was yes.

    Now, the package got there on Monday afternoon, and all was well.

    But it seems to me that these are the kinds of encounters that slowly kill companies. By itself, not a big deal. But if they happen over and over, to a multitude of people, eventually it starts to wear on a company’s culture and reputation.

    FedEx is a widely admired company, and for good reasons. I have no idea if I ran into an institutional problem, or just an individual one. You know something, though? Institutional problems start out as individual ones.

    The question that all businesses need to ask themselves, on a regular basis, is if these kinds of disconnects exist in their organizations - promises of products and services that ought to be absolutely, positively delivered in an effective and efficient way...but are not.

    It doesn’t matter whose fault it is. It doesn’t matter who gets blamed. It only matters that the customer is dissatisfied and perhaps willing top go somewhere else next time.

    Then, the problem can be deadly.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:

    Published on: September 23, 2010

    Yesterday was supposed to be a big deal for Netflix. The company was expanding its online video streaming service into Canada, and was celebrating the move with a big event in Toronto. A big crowd showed up for the event, many of whom expressed considerable excitement about the prospect of being able to access Netflix’s online content.

    Except for one thing. A number of the excited consumers were actually paid actors carrying a piece of paper instructing them “to look really excited, particularly if asked by media to do any interviews about the prospect of Netflix in Canada.”

    The Toronto Star writes, “After word of the ruse spread on Twitter, Netflix apologized and said the extras should not have been talking to reporters.

    “A spokesman for Netflix said the handout for extras was required to obtain a film permit for the launch. The instruction sheet referred to Wednesday’s event as a ‘corporate documentary.’

    “‘I was unaware that script was handed out to extras and that was not supposed to happen,’ said Steve Swasey, vice president of corporate communications for Netflix. ‘Some people got carried away and it’s embarrassing to Netflix’.”

    All of which means that some low or mid-level public relations person probably is going to lose his or her job. In Canada, they’d probably call that being a sacrificial moose.

    Here’s the amazing thing. Netflix knows who all its customers are. If it wanted to put reporters in touch with enthusiastic customers, all it had to do was import a couple of dozen from nearby Buffalo, New York, and have them available to the Canadian press. It couldn’t have taken Netflix more than about five minutes to identify happy users; hell, they could have called me and I would have gone to Toronto and waxed rhapsodic about their service. (They would have had to pay my air fare and throw in Blue Jays tickets, but then, I’m easy.)

    The central lesson is this. More than ever, the truth will come out. Authenticity cannot be faked, no matter how hard you try.

    And that’s my Thursday Eye-Opener.

    - Kevin Coupe
    KC's View:

    Published on: September 23, 2010

    What do eggs and peanut butter have in common?

    More than you’d think, apparently.

    At a hearing yesterday by the US House of representatives Energy and Commerce Committee’s subcommittee on investigations, Orland Bethel, one of the egg manufacturers implicated in the current outbreak of salmonella-related illnesses, appeared but refused to testify. According to the Los Angeles Times, Bethel cited his Fifth Amendment right against self-incrimination in declining to answer the committee’s questions.

    The moment was reminiscent of the time in February 2009 when two executives with Peanut Corporation of America (PCA) – president Stewart Parnell and plant manager Sammy Lightsey – refused to answer question before the Congressional panel investigating that salmonella outbreak, which has sickened more than 600 people, killed nine, and was been linked to the Georgia plant for which they were responsible.”

    It gets better.

    USA Today reports on yet another link between the two food safety-related incidents:

    “Wright County Egg, one of the Iowa farms at the center of this summer's recall of 550 million eggs, earned ‘superior’ ratings for its facilities from a third-party auditor the past three years. But the auditor was the same one that gave a superior rating to the Peanut Corp. of America, whose shipments were linked to a salmonella outbreak that sickened hundreds a few years ago ... AIB International, of Manhattan, Kan., audited (the offending) egg-packing plant twice in 2008, four times in 2009 and at least once in 2010, and every time found it to be ‘superior’.”

    Testimony at yesterday’s hearing by another egg producer hardly could have been reassuring to skittish consumers.

    Here’s how the New York Times described the scene:

    “An Iowa egg producer at the center of a nationwide outbreak of salmonella apologized to a Congressional panel on Wednesday and admitted that his family operation ‘got big quite a while before we stopped acting like we were small.’

    “‘What I mean by that is we were big before we started adopting sophisticated procedures to be sure we met all of the government requirements,’ the egg producer, Austin J. DeCoster, said in testimony before a House Energy and Commerce subcommittee. He is the founder of an egg empire that has been linked over three decades to multiple deadly outbreaks of salmonella poisoning in many states.

    “Mr. DeCoster’s company, Wright County Egg, and another company, Hillandale Farms, recalled more than 500 million eggs last month after health officials traced salmonella bacteria that sickened more than 1,500 people to those companies.

    “A subsequent inspection by the Food and Drug Administration found that the barns of the egg producers were infested with flies, maggots and rodents, and had overflowing manure pits. Records unearthed by Congressional investigators showed that tests of Wright County Egg barns had shown the presence of toxic salmonella bacteria for years prior to the outbreak.

    “‘We were horrified to learn that our eggs may have made people sick,’ Mr. DeCoster, who is known as Jack, said in a shaky voice. ‘We apologize to everyone who may have been sickened by eating our eggs’.”

    “The egg producer’s frequent run-ins with regulators over labor, environmental and immigration violations at his operations have been well documented, and in his four paragraph statement, Mr. DeCoster also accepted responsibility for mistakes that the company has made in complying with government regulations over the years. Pictures taken at the DeCoster facilities of barns bursting with manure, manure flowing under barn doors, and barns with dead rodents, chickens and flies were shown at the hearing.”
    KC's View:
    Here’s the deal. I’m not ordering eggs in restaurants for the time being. If I buy eggs at the store, I want to be damned sure where they came from...or I’m not buying them. I’m betting I’m not alone in being disgusted by the scenes being described in the media.

    I don’t have a lot of confidence in the DeCoster testimony. The Bethel refusal to talk speaks for itself. And the news about AIB International is horrifying - whatever license this company has to conduct inspections ought to be yanked immediately.

    There’s a lot of debate going on about the proposed food safety law and whether it is adequate or unnecessary. But here’s where they ought to start. If you run or own a company that willfully commits food safety violations, putting short-term sales and profits ahead of consumer safety, if you are found guilty in a court of law you go to jail for a minimum 25 year sentence and have to write a check for a multi-million dollar fine that ought to represent 50 percent of your net worth. No debate, no negotiation.

    And you also have to subsist in jail on a diet primarily made up of the food products you used to produce.

    Published on: September 23, 2010

    Supervalu has announced that through a partnership with the World Wildlife Fund (WWF), it “plans to cut its emissions of greenhouse gases by 10 percent by the end of 2012 with a baseline year of 2007. Supervalu’s initiative is comparable in scope to eliminating the electricity use of more than 352,000 average US homes for one year. This partnership makes Supervalu not only the first traditional grocer, but also the first major retailer to join WWF's Climate Savers program, a reflection on the company’s commitment to the environment.”

    According to the announcement, “Supervalu is one of 25 participants in WWF’s Climate Savers program, joining the likes of Hewlett Packard, Nike, The Coca-Cola Company, IBM, and Johnson & Johnson. Collectively, Climate Savers partners will reduce emissions by an estimated 50 million tons by the end of 2010, an amount equivalent to the carbon emissions of 8.7 million passenger vehicles or the carbon sequestered by 9.7 million acres of pine forests.”
    KC's View:
    Such a program may be about being green in the short term, but in the long run, companies that get involved will have a different sort of green advantage, since they will be saving money and eliminating waste.

    BTW...I’m glad that Supervalu chose this option, as opposed to the other WWF Climate program, which has to do with encouraging grown men to do steroids, put on a fake wrestling match, call it real, and then not provide them with health care or accept any responsibility when people start getting sick.

    Published on: September 23, 2010

    The Wall Street Journal this morning reports that Walmart “is fighting back against a longtime corporate-sabotage campaign undertaken by grocery competitors to slow its growth.

    “The Bentonville, Ark.-based retailer recently asked judges to require its opponents to disclose who is footing the legal bills in four out of the dozens of California lawsuits against Wal-Mart that have helped delay the company's expansion. Lawyers for Wal-Mart want to know if the protracted environmental suits have been funded not by grass-roots activists, as the company long thought, but rather by competitors.”

    Last June, the Journal reported that in numerous markets where Walmart has faced local resistance to its expansion from residents and union groups, some of those anti-development campaigns actually were run by an organization called Saint Consulting Group and funded by some of its biggest competitors, such as Supervalu, Safeway and Ahold.
    KC's View:

    Published on: September 23, 2010

    In Wisconsin, the Journal Sentinel reports that “Woodman's Food Markets Inc. has been accused of violating federal law by firing an employee because she was pregnant.

    “The U.S. Equal Employment Opportunity Commission filed a federal lawsuit Tuesday against the Janesville-based company. In a statement, the agency said Woodman's fired Arianna Goodwin in January 2008. That happened after an assistant store manager in Madison asked Goodwin if she was pregnant, and then told her he would have to fire her, or she could quit and reapply after giving birth, the statement says.”

    Company officials apparently have not commented on the suit.
    KC's View:
    I hope, for Woodman’s sake, that this is a case of one assistant store manager with the sensibilities of a Neanderthal making a bad decision. You simply can’t be doing this stuff.

    Yet another illustration about how one person can have an impact on how a company is perceived.

    Published on: September 23, 2010

    The Dallas Morning News reports that faced with a price campaign by Aldi that reduced the price of a gallon of milk to 99 cents for a limited time - the national average price for a gallon of milk is over $3 - lots of Dallas-area stores are matching the price.

    “Kroger is running full page ads announcing that it, too, is selling milk for 99 cents -- at least for now,” the Morning News reports. “Walmart and Target have also matched the price.”
    KC's View:
    What udder choice did they have?

    Published on: September 23, 2010

    • Tesco announced that its Fresh & Easy Neighborhood Markets small-store division in the western US is introducing a new line called fresh&easy Goodness, described as being “fun, delicious and convenient items kids will love and parents can feel good about feeding their children. Like all fresh&easy products, there are no artificial colors, flavors or preservatives, no added trans fats and no high-fructose corn syrup.

    “Fresh & Easy also worked to limit the amount of sugar, sodium, and fat in fresh&easy Goodness products and has made sure the products contain no artificial sweeteners and no added caffeine ... fresh&easy Goodness products are made using wholesome, natural foods such as whole grains, fruits and vegetables, and other foods that are good sources of vitamins and minerals. Items in the range include classic kid favorites like breakfast cereals and macaroni & cheese, and easy-to-make microwavable meals and on-the-go snacks that are individually packaged and great for lunch boxes.”
    KC's View:

    Published on: September 23, 2010

    In the UK, Marketing Week reports that Sainsbury is relaunching its “Taste the Difference” private brand - reformulating the 1,100 existing items and adding some 300 new products to make them more reflective of premium tastes.

    The company says that this is its biggest investment ever in private label development.

    The story comes just a day after the Wall Street Journal reported that Walmart-owned Asda Group is investing the equivalent of $155 million (US) “to relaunch its core food range, as the U.K.'s second largest supermarket chain bids to revive flagging sales and steal market share from rivals.
    KC's View:
    Must be something in the water.

    Published on: September 23, 2010

    Starbucks pioneered the notion of being a “third place” retailer, an alternative to home and office where customers could hang out with friends, relax, and spend four bucks on a cup of coffee.

    Now, apparently, being a third place isn’t enough...

    Reuters reports that Starbucks wants also be be a “fourth place.” Online.

    According to the story, “The coffee chain plans to launch its Starbucks Digital Network this autumn. The free service, which is a partnership between Starbucks and Yahoo, will be available to users of complimentary Wi-Fi at company-run Starbucks cafes in the United States and Canada and will give customers a place to share information and find news, music and films. Content providers include the Wall Street Journal, the New York Times, USA Today, restaurant reviewer Zagat and SnagFilms, which has an advertising-supported library of more than 1,600 documentary films available for online viewing.”
    KC's View:

    Published on: September 23, 2010

    • The National Retail Federation has urged the House to approve legislation that would establish a new unit at the Department of Justice focused on investigating and prosecuting organized retail crime.

    “This bill is one of the keys to protecting both retailers and consumers against the massive economic costs and very real public health and safety risks posed by organized retail crime,” NRF Senior Vice President for Government Relations Steve Pfister said. “Establishing a team of law enforcement professionals dedicated to fighting these crimes and working in close consultation with retailers shows the importance of the issue to industry, consumers and law enforcement, and serves as an important deterrent to perpetrators.”

    • The Atlanta Journal-Constitution reports that “Pepsi-Cola North America Beverages is changing Sierra Mist, its lemon-lime soda, into ‘Sierra Mist Natural,’ which the company says will be made with real sugar. The drink will have no preservatives, no artificial flavors and no caffeine.

    Dow Jones reports that General Mills “aims to source 100% of the palm oil it uses from responsible and sustainable sources by 2015, becoming the latest in a long list of major food companies, including fast food chain Burger King Holdings Inc., Nestle SA and Unilever NV to say it will source only eco- friendly palm oil--as opposed to palm oil linked to deforestation.”

    • The New York Times reports this morning that Nestlé plans to “open a research and development center in India, where it would use local ingredients and spices, as well as low-cost Indian research and engineering, to make products for India as well as other countries. The center will be built in Manesar, a town south of Delhi, and should be open in 2012.

    “Like many other Western companies, Nestlé is ramping up in emerging markets where fast-growing economies and young populations mean an increasing number of consumers can afford nonessential goods. Nestlé predicts that 45 percent of its sales will come in emerging markets by 2020.”

    • As expected, Blockbuster Inc. yesterday filed for Chapter 11 bankruptcy. Reuters writes that the company is “weighed by more than $900 million in debt and hurt by competitors who use mailboxes or instant streaming.”
    KC's View:

    Published on: September 23, 2010

    MNB took note the other day of a BrandWeek report that Coca-Cola, IBM and Microsoft have ranked first, second and third in Interbrand’s annual ranking of the 100 Best Global Brands, which is formulated based on what the company calls ““a unique methodology analyzing the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectation.”

    My question: How does McDonald’s make the list and not Walmart? It makes no sense. Walmart has a name and brand equity that stands for something very specific, and that resonates around the world. Hard to believe it doesn’t make the top 100. Hard to believe it doesn’t make the top five.

    MNB user Nico Hogeveen wrote:

    You ask why McDonald’s is on the Best 100 Global Brands list and Walmart is not? You state it makes no sense. I would argue it makes total sense as long as you understand the difference between a brand name and a company name. Although Walmart is a huge company, it’s not a global brand by a long shot. Two reasons: global presence and brand name strategy.

    Global presence: Outside the US and Canada Walmart is only present in 13 other countries around the world (and of those nine, yes 9, are in Central and South America). Ask almost anybody in the rest of the world and they would have never heard of Walmart, let alone know what it is or does. Contrast the global reach of McDonald’s: it operates in over 100 countries and on every continent (except Antarctica, I think?) under the same brand name. Leading to #2…

    Brand name strategy: Walmart will never be a global brand if it continues to use local brand names for its stores (ASDA in UK, Bompreco and Dia in South America, etc.). I don’t think Walmart necessarily needs or wants to be a global brand, and strategically there’s nothing wrong with that. It’s a strategic choice and simply the difference between a company name and a brand name. It’s somewhat similar to P&G not being on the list while a brand of theirs (e.g. Gillette) is. And the Interbrand research measures brand names not company names.


    Another MNB user wrote:

    I think what's interesting in the list of Top 100 Global Brands is the fact that not only is Wal-Mart not listed, but there are no other Retailers listed from any retailing segment.  This might illustrate what is often times one of the primary challenges in the retailing world - it's tough to create a strong brand image when you predominately sell products produced by other companies/Brands.

    MNB user Garry Adams wrote:

    I’ve heard that Harley-Davidson is America’s most LOYAL brand.   I was surprised too.  Then it was pointed out that rarely is “Coca Cola” or “IBM” tattooed on anyone’s body.
     
    Tattoos are for a long time.





    On another subject, MNB user Gary Cohen wrote:

    On your Tesco story and them wanting to have 10,000 stores…

    Think Hawaii. ABC must have 10,000 stores in Oahu alone. One on every corner and then one in the middle of the block! They have beverages, grab & go food that’s pretty good, convenience store items, plus Macadamia Nuts in every possible variety. Maybe that was the business model Tesco should have gone after.


    Maybe.

    On the whole “small store” issue, another MNB user had an interesting thought:

    Blockbuster must be sitting on extensive real estate in prime neighborhood locations with stores of roughly 20,000 sq ft…where’s Walmart???




    Here on MNB, we keep calling for the government not just to allow, but to require that genetically modified salmon (and other GM products) be labeled as such, since it is only by doing so that consumers have a real and informed choice. MNB user Tom Kroupa responded:

    I totally agree with you about the need for transparency of GE Salmon. They should label the food I eat! In a democratic society the consumer is right! If any other business did not respond to their customers they would suffer, and there are many examples of that. This is blatantly immoral behavior! The great philosopher-inventor Buckminster Fuller once said at a press conference, "That men could put moneymaking before The Truth seems incredible to me! But men have put moneymaking before The Truth by the millions for a long, long time --which tells us why we are in a very great predicament on our planet today!”




    The city of Boston is considering whether to restrict or even prohibit the sale of calorie-laden refreshments on city-owned property.

    One MNB user responded:

    How ironic! The city that started the Revolutionary War because of opposition to involvement of the King of England in their business affairs now wants to regulate whether you and I can consume a soft drink? Wow, what’s next? Perhaps, banning artificially sweetened soft drinks? After all, those artificial sweeteners may be bad for you. Not to mention all the sodium that is in soft drinks. Ban them all, saith the town fathers! After that they should look into banning anything with caffeine. What about alcohol (okay, just joking about this one, it is Boston after-all). Seriously, where does the nanny state end, and the concept of personal responsibility begin????

    I’ve always bought into the idea that Boston is the Athens of the west, but one of the country’s great cities has a long and unfortunate history of Puritan-style instincts that have led it to ban everything from books to movies over the years. That’s changed...but sometimes old instincts die hard.




    Got the following email from MNB user James P. DeJohn:

     I enjoyed reading the article "The Most Wonderful Time of the Year" by Michael Sansolo this morning.  I completely agree that having a family dinner is a very important part of a child's day.  My wife and I even take this a step further by having our children (who are 9,6 and 3) help us with the preparation of the dinner.  We try to do things like make our own pasta once a week so they can learn it doesn't just come out of a box, we make sauces, and try to have them come up with some dinner ideas.  We also allow them to choose different vegetables at the grocery store to try for dinner to help add a fun touch to the ever tough trying vegetable routine.  Once at the dinner table, we will go around and everyone will say one good thing that happened to them (their rose for the day) and then one thing that wasn't so great (their thorn for the day).  We feel this entire process of a family dinner will help to instill a sense of well being and hopefully better decision making in their futures...knowing they can always discuss them at dinner.

    MNB user Lisa Bosshard chimed in:

    Just wanted to share - that not only does eating in with family help in so many ways - but it also helps maintain important friendships.  Every Sunday evening, we trade off cooking with our 'best friends' (we're the god parents of their young children).  Sometimes it's a pain to spend time cooking, but once we're all together, it couldn't be a better, more fun-filled conversation for 2+ hours each week.  In fact, my grown daughter enjoys it so much, it's the one night we can depend on her coming to dinner 🙂   This weekly scheduled event, provides the opportunity to have adult time and get to be a kid again for those of us with grown children.  Just last Sunday, I played kitchen soccer with a 3 & 5 year old - it was creative and lots of fun which wouldn't have occurred without our 'weekly dinner'.   Great article and I'm so glad to see something like this published - thank you for sharing with your readers.




    Finally, responding to my “Eye-Opener” the other day about the piece done by “The Daily Show” about a certain amount of hypocrisy in the UFCW’s approach to picketing Walmart in Nevada.

    MNB user Glenn Cantor wrote:

    The Daily Show piece on the Nevada UFCW’s protest of Wal-Mart is priceless.  The look on the interviewed union leader’s face, when asked if he knew that his union hired non-union workers to walk the picket line, tells it all.

    But another MNB user wrote:

    Perhaps I'm missing your use of sarcasm but you always appear to use "The Daily Show" as though they are reporting the facts. It is simply a comedy show.

    True. The best thing about “The Daily Show” is that it makes me laugh.

    I suspect that while often the show uses facts to make its points about hypocrisy and stupidity on both sides of the aisle, the producers would never suggest that it is “factual” or anything other than a comedy show.

    But great comedy always has its roots in truth. Truth is not always the same as the facts.  Sometimes, truth is more important.
    KC's View: