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    Published on: February 10, 2011



    by Kevin Coupe



    Content Guy’s Note: Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or either...it is up to you. I look forward to hearing from you.

    MNB readers will know that we’re big on metaphor here. We love the notion of using narrative and stories to illustrate larger lessons. (Heck, Sansolo and I wrote a book on the subject - The Big Picture: Essential Business Lessons from the Movies - that is available now in print and as an e-book, and, by the way, makes a fabulous Valentine’s Day present.)

    Not only is metaphor instructive, but it also can be entertaining ... though “entertaining” may not be exactly the right word for this story.

    It seems that a California man liked to run cockfights. He’d been arrested a few times and fined, but the penalties were nothing compared to the profits from the gambling, which sometimes could exceed $10,000 a night.

    What I didn’t know about cockfighting is that they actually attach little knives to the roosters’ claws, I guess because they figure that the claws themselves don’t do enough damage. In this case, the rooster turned on the guy running the cockfight, slashed his calf with his knife, hitting an artery - and killing him.

    This goes into the “you reap what you sow” file.

    The lesson? Everything you do has repercussions. You cannot escape the results of your own actions. And only thinking short-term is never a good idea; you have to always consider the long-term domino effect of whatever you do and whatever you say.

    As Jimmy Malone would say, “Here endeth the lesson.”

    That’s what is on my mind this morning.

    As always, I want to know what is on yours.
    KC's View:

    Published on: February 10, 2011

    The Kroger Co. has adopted new technology that is described as “able to provide...consumers faster access to online planning tools, which includes online circulars, personalized shopping lists, and recipes. Online circulars offer shoppers an easy way to stay informed about sales and specials that are relevant to them at their local store. The circulars are also integrated with a customer’s shopping lists and recipes, offering an interactive and seamless shopping experience.”

    The digital solutions provider is MyWebGrocer, which said that the addition of Kroger’s 2,400 stores brings its network to more than 110 retailers nationally, representing over 10,000 stores - creating and managing digital solutions including websites, digital media, online circulars, email marketing initiatives, mobile applications, social media strategies, and customer acquisition programs.

    Full disclosure: MyWebGrocer is a longtime MNB sponsor.
    KC's View:
    The position here is both long-term and consistent. Retailers that do not offer digital options to their consumers run the risk of becoming irrelevant to their customer base. This irrelevance won’t happen overnight, but it will happen; not everybody will be looking for digital options all the time, but offering such alternatives will be critical to appearing relevant to a customer base raised on computers, smart phones, and the ubiquity of Amazon.com.

    Published on: February 10, 2011

    by Kevin Coupe

    CNN.com reports that “the U.S. Postal Service warned Wednesday that it may default on some of its financial obligations later this year after reporting yet another quarterly loss.

    “The USPS, a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier.

    “The agency has been suffering from an ongoing decline in mail volume, which has undercut revenues, while retiree health care costs have been straining its reserves.”

    Which all is a nice way that the USPS is a prime example of an institution that did not recognize fundamental societal changes undercutting its business model, and that has slapped bandages on mortal wounds, convincing itself that short-term fixes would eventually alleviate a persistent and long-term problem.

    Example: The USPS tries to get the US Congress to allow it to cut back on its hours and/or eliminate Saturday delivery.

    But what nobody seems to have done is take a brutal look at a dinosaur of a service and say, “If we were to build a mail delivery service from the ground up, what would it look like? How would it operate? And how would we make it commercially viable and financially sustainable?”

    Until those questions are asked, the USPS probably will continue to wallow in increasing pools of red ink.

    And if other businesses don't learn this lesson - and ask themselves the same hard questions every day - then they run the risk of the same level of irrelevance.

    And that’s our Thursday Eye-Opener.
    KC's View:

    Published on: February 10, 2011

    Marketing Daily reports on the highlights of the 2011 Brand Keys Customer Loyalty Engagement Index, which concludes that “the brands across all categories that are knocking the ball out of the park when it comes to customer engagement and loyalty have one critical thing in common - They ‘delight’ customers with authentic innovation and an overall brand experience that delivers on consumers' key expectations within their product categories.”

    "Consumers' evolution toward defining value in total experience terms rather than price terms has been accelerating for some time, and it's now taken firm hold," says Robert Passikoff, founder and president of the Brand Keys consultancy. "Product/service attributes relating to brand 'experience' and 'authentic innovation' -- the attributes that most drive 'delight' -- are exerting the strongest impact on customer decision-making, category expectations and engagement. This year, 93% of all categories tracked are showing their greatest increases in expectations within purchase-drivers that are centered on innovation and other attributes that most strongly impact customers' overall experience and produce that 'delight' factor."

    Among the top companies ranked as best at providing this “delight” factor are Netflix, Apple, Walgreens, Discover, Hyundai, Mary Kay, McDonald’s, J. Crew, Samsung and Nikon.

    According to the story, “Authentic innovation - meaning that which makes some kind of a positive difference in users' lives or lifestyles - has never been more critical because of its key role in producing an overall brand experience that achieves the ‘delight’ level, Passikoff explains. In addition to launching new products/ services that offer the consumer something new and meaningful, innovations that improve existing products or how they are delivered or serviced post-purchase are hallmarks of the brands that are leading their categories in loyalty engagement, he reports.”

    In the QSR category, McDonald’s is top-ranked, followed by Subway; McDonald’s also beats out Starbucks in the coffee category.

    "Starbucks lost ground to McDonald's not just because of McDonald's' introduction of premium 'café' offerings, but because Starbucks for a time made its store environments less welcoming and comfortable, harming the consumer experience," says Passikoff. "Now, they're addressing this along with other initiatives, and they're regaining loyalty strength."
    KC's View:
    More than anything, what this list tells me is that brand equity and “delight” are highly personal things. To be honest, there are only two names on the list that I would even consider in my personal top-10 brand loyalty list - Netflix and Apple. Of the rest, there are only two others that I use occasionally (Walgreens and J. Crew, the latter because I do have a teenaged daughter), and the other six are irrelevant to my life.

    “Authentic innovation” is important, but it also has to be relevant to your target customers’ lives , desires and needs. Without that connection, it doesn’t matter.

    Published on: February 10, 2011

    The Los Angeles Times reports on a new survey commissioned by the California Endowment saying that “nearly 60% of those polled, up from 46% eight years ago, called childhood obesity a ‘very serious’ problem, according to the survey of 1,005 registered voters. In addition, one in three cited unhealthy eating habits more than any other factor - including illegal drug use and violence - as the ‘greatest health risk’ for children in California. More than half said they would support a tax on soda and soft drinks to fund the fight against childhood obesity, and 61% said all drinks with added sugars should be banned from schools.”

    The story also says that “three-quarters of those asked said businesses and governments should promote healthier behavior. Nearly 90% of that group favored requiring physical education classes for four years in high school; keeping school gyms, tracks, playgrounds and fields open when school is out; and making street improvements so it is easier to bike and walk.

    “Nearly two-thirds of those polled said supermarkets should be encouraged to open in low income neighborhoods. Although 61% of those polled said it was very easy to find fresh fruit and vegetables locally, just 19% of parents in six low-income communities the endowment polled agreed.”
    KC's View:
    I’m intrigued by the sentence, “More than half said they would support a tax on soda and soft drinks to fund the fight against childhood obesity, and 61% said all drinks with added sugars should be banned from schools.”

    Now, I understand that poll questions can be phrased in leading ways, and that not all polls can be trusted.

    But if this number is close to accurate, what does it say to people who complain about the “nanny state,” saying that it inappropriately assesses fees and imposes rules that infringe on people’s freedom.

    These numbers sort of suggest that a majority of people believe that the government, acting as a tool of the people, needs to take a public policy position towards obesity that acknowledges it as a health,m fiscal and national security problem.

    Some will say that this is because all Californians are Marxists, and we’d be better off if the state fell into the Pacific. (You know who you are; this saves you the trouble of sending me an email expressing this position.) But some others will say that Californians are more enlightened than others.

    Published on: February 10, 2011

    The Miami Herald reports that Whole Foods is trying to take advantage of a growing trend - Community Supported Agriculture (CSA), which allows people, for $20 to $40 a week, to “buy ultra-fresh food straight from the farm at prices similar to the grocery store. And their contribution helps small farmers remain in business.”

    The story describes the CSA concept this way: “The idea is that the consumer buys a ‘share’ in the farm. They prepay at the beginning of the growing season for their weekly produce. The farmer uses that money to help plant and grow the crops. If the farmer has a good harvest, the consumer reaps the rewards. But if bad weather or pests interfere, the consumer’s share suffers.

    “The drawback: CSA customers can’t order what they like. The farmer gives them what is fresh that week.

    “The plus: Often the produce came out of the ground only a day before they pick it up.”

    According to the Herald, “While the CSA concept historically has cut the grocery store out of the equation, Whole Foods stores in Florida are aiming to change that. The chain is kicking off a program to offer local farms free use of Whole Foods stores throughout the state as drop-off and pick-up points for the weekly deliveries.

    “Whole Foods - which began testing the idea late last year at five Florida stores with two farms - is now ready to roll it out as a long-term program across the state. Any farm can participate as long as the store has room to hold the boxes.”
    KC's View:
    Seems to me that embracing the CSA concept sits right into Whole Foods’ concept of “conscious capitalism.”

    Wait until Walmart decides to do the same thing.

    Published on: February 10, 2011

    Crain’s Chicago Business reports that Walmart is running into a different sort of union problem as it ramps up for building new stores there.

    According to the piece, “To grow in the city, Wal-Mart reached a deal with the Chicago and Cook County Building and Construction Trades Council in June, shortly before the City Council unanimously approved Wal-Mart's second Chicago store, in the Pullman neighborhood. According to the agreement, union workers will build all Wal-Mart facilities in Northern Illinois during the next three years.”

    But now, some Chicago residents - people who are not union members, and often members of minorities - are saying that Walmart is discriminating against them.

    “The fact that we're forced in some cases to even deal with the unions is a form of discrimination,” says Tony Malbranche, Walmart’s director of construction.

    And, he added, “We want everyone to be in play, but we can't do that here because of restrictions. We're trying to work this issue behind the scenes. It's going to take a lot more work to make sure people from the neighborhoods are involved.”

    Mr. Malbranche added: “Chicago is locked down in time,” regarding the strength of unions. “No one else does business like this in the country.”


    • The Washington Post reports that while elected officials and bureaucrats often will debate things like job training, environmental issues and fair pay when they discuss the new Walmarts that soon will open in the district, “residents have more immediate, street-level concerns.

    “First, would a new Wal-Mart there really stock the same quality of food and products as its stores do in better-off, suburban communities?”

    Walmart says that it plans to rectify the problems of availability that affect so-called “food deserts,” and also says that “it will pay competitive wages and benefits, help with job training and satisfy other desires expressed by city leaders including Mayor Vincent Gray.”
    KC's View:
    Walmart should be held to its promises to the district, no question.

    But my sympathy for the naysayers vanishes when I read that one opponent actually said in a public rally that a new Walmart should not be built because all the stuff it will sell will make poor kids want to shoplift, ruining their lives from criminal records.

    Which is one of the dumbest things I’ve ever heard.

    Maybe the parents ought to teach their kids that stealing is bad, or maybe have more confidence in them. Maybe parents ought to get their kids to go apply for some of the jobs that Walmart is going to create. But whine that Walmart creates shoplifters?

    What a crock.

    Published on: February 10, 2011

    • Cellfire Inc. has announced a partnership with Location Labs, a provider of mobile location-as-a-service infrastructure and applications,to offer real-time alerts on available coupons when they are near a participating grocery store.

    According to the announcement, “Cellfire allows consumers to access grocery coupons easily from their favorite brands using their mobile phone. Selected grocery coupons are immediately loaded to the grocery savings card and applied automatically at checkout ... Once the Store Alerts capability is turned on, consumers automatically begin to receive coupon reminders when they are physically near their selected stores. Consumers can choose the conditions and the store locations where they would like to receive Store Alerts.”

    Bloomberg reports that Best Buy “may curtail three decades of tactical discounting and move instead to its own version of the everyday prices pioneered by Wal-Mart Stores Inc.”

    The reason? Since people are able to use their smart phones to instantly find out what retailers offer the best price on almost any item with a bar code, tactical discounts are problematic - and an EDLP approach may be the only sound marketing strategy.
    KC's View:
    Each of these stories provides a vivid illustration of the fact that for retailers, it isn’t business as usual anymore. There are so many shifts, so many influences, so many intangibles that need to be considered by anyone trying to do business.

    Published on: February 10, 2011

    The Richmond Times Dispatch reports that the United Food and Commercial Workers (UFCW) union has begun efforts to organize Martin’s Food Markets employees in the Richmond area. The effort was timed to the one-year anniversary of Ahold’s purchase of Ukrop’s, which owns Martin’s.

    According to the story, “The union, which represents grocery workers at area Kroger stores and about 70,000 Ahold employees in the U.S, said it wants the opportunity to speak with employees and let them choose whether to unionize.”

    "It's unfortunate that union activities are disrupting the shopping experience for customers," Christopher Brand, a spokesman for the grocery chain, tells the paper. "Martin's is a union-free chain committed to providing the best working environment for our associates — one that allows us to communicate directly without the interference of an outside third party."
    KC's View:

    Published on: February 10, 2011

    • The Associated Press reports that “Americans should brace for higher food prices this year now that demand for corn has pushed U.S. supplies to their lowest point in 15 years.

    “Higher projected orders from the ethanol industry sent corn futures soaring Wednesday, as corn supplies became the latest commodity to plummet. Low levels of wheat, coffee, soybeans and other food staples have already sent prices surging on the global market.”

    CNN reports that PepsiCo is introducing a new Diet Pepsi can that is “taller” (six inches high) and “sassier,” designed to be more attractive to fashion-conscious women.

    However, the old can will remain on store shelves ... probably for dumpier, less fashion-conscious men.

    • The Wall Street Journal reports that JM Smucker Co. said that “the rising cost of unroasted coffee beans, or green coffee, is prompting it to increase the prices of most of its coffee products in the U.S. by 10% on average.

    “The move will mostly affect coffee sold under the Folgers and Dunkin' Donuts brand names and comes on top of increases announced in August and May.”

    ABC News reports that a new study presented at the American Stroke Association International Stroke Conference suggests that “people who drank diet soda daily had a 61 percent increased risk of cardiovascular events compared to those who drank no soda, even when accounting for smoking, physical activity, alcohol consumption and calories consumed per day.”

    However, critics said that the study’s methodology was flawed and that people should not change their diet soda drinking habits based on its results.
    KC's View:

    Published on: February 10, 2011

    In my Eye-Opener yesterday, I was critical of Josef Ackermann, the CEO of Deutsch Bank, who said last week that bringing women into upper management would make life “more colorful...and prettier, too.”

    I wrote:

    The bigger issue illuminated here is the problem of old world thinking in a new world environment. Ackermann sounds like he’s living in a “Mad Men” world, when most of the rest of us are living in a “Facebook” universe. That’s something that companies that want to be relevant to their customers cannot afford.

    How many women are Deutsche Bank customers? Or are potential Deutsche Bank customers? And how many of them now will take their business elsewhere?


    One MNB user wrote:

    Here's a thought for you Kevin -- in the 'food industry' how many board members, not belonging to any family ownership group, sit on company boards?

    I'll go out on a limb here & say the majority of food shopping is done by women, who in turn are grossly under represented on boards & senior management.


    MNB user Janis Raye wrote:

    Was Slate being "clever" when it used the phrase "women 'manning' corporate boardrooms"? That's more unthinking language that offends most thinking women.

    Unfortunately, the whole issue isn't just things you shouldn't say, but things that shouldn't even be thought anymore. I'm afraid our daughters think all this stuff is over by now, but clearly, it isn't. (I haven't forgiven Larry Summers for his comments, either.)





    We had a piece yesterday about Amazon’s listing of the nation’s most romantic cities, determined by an analysis of “sales data of romance novels and relationship books (Kindle Books and print books), romantic comedy movies (digital movies and DVDs), Barry White albums (CDs and MP3s), along with sexual wellness products, since Jan. 1, 2011, on a per capita basis in cities with over 100,000 residents.” Four cities ofd the top 20 were in Florida, three were in Tennessee and two were in Virginia. But what impressed me was the level of analysis that Amazon was able to do, and I wondered how many other retailers had that kind of information about its shoppers.

    One MNB user wrote:

    I would suggest that there are alternate interpretations to the Amazon findings that you highlighted in the February 9 MNB.

    • What's so amazing about Amazon's ability to track what genres of books, recordings, and DVDs are sent to what cities? This strikes me as a fairly pedestrian (and ultimately useless) use of the Amazon database unless Amazon plans to start shilling stuff to people on the basis of where they live. It's been a while since I bought anything from Amazon but my recollection is that "suggestions" were made on the basis of purchasing history or other purchases made by people who checked out the same product.

    • Perhaps Amazon has not come up with a list of the most romantic cities but instead has come up with a list of the cities with the most romantically frustrated residents (i.e., buying romance novels and other such items are a substitute for the romance those people aren't having). And if Miami is t! he sexiest city why do its residents need so many "sexual wellness" products?


    Another MNB user wrote:

    With at least a portion of my tongue in my cheek, I have to say that it seems to me that the study may show that some of those cities are more likely filled with people in search of romance or they wouldn't be buying so many romance novels to live vicariously through them.

    Another MNB user wrote:

    Could be two common denominators - two of the cities are close to Washington DC... coincidence?

    The other is nearly all of the rest are college towns (University of Miami, Florida, Florida State, Tennessee, South Carolina, etc.).....  may just be nature taking it's course as the young sow wild oats?


    MNB user Bob Vereen wrote:

    With 4 cities in Florida on that "romantic" list, it must reflect Senior Citizen Wish Lists.

    And, from another MNB user:

    Lot of college towns in this top 20. Makes you wonder what the kids are up to…

    Same stuff a lot of us were up to when we were in college. I’m not wondering at all.




    On the subject of Groupon’s Super Bowl commercials that backfired because they were seen as exploitive and insensitive, one MNB user wrote:

    The Groupon Super Bowl commercial “oops!” gave Groupon national recognition. The commercial may have offended many people, but I would not categorize the commercial as failing.

    If you didn’t know who or what Groupon was prior to the Super Bowl, you know now.  The commercial was a success.


    Interesting point. But another MNB user wrote:

    Edgy ? No. Stupid ? Yes.




    We continue to get email on the Chick-fil-A issue....

    (The privately held fast food chicken chain, well-known for a conservative religious culture that goes so far as to close its stores on Sundays, has come under fire from some gay rights groups for having contributed food to an anti-gay marriage group. The company says it is not anti-gay, though it does believe in the “biblical view of marriage.” And analysts say that the company’s culture may make it difficult to expand to national proportions, where its beliefs will be seen as unacceptable by some.)

    One MNB user wrote:

    I seldom - almost never - rant.  One can debate the issue of the Chick-fil-A position ad nauseum.  However, the fact remains that all citizens deserve equal civil rights and equal protection under the law, and I thank you for consistently repeating that.  Virtually all of these same "reasons" and justifications against allowing gay people to marry were also used in the pre -1960's era when several states still barred inter-racial marriage.  (Remove the words "gay marriage" and replace with "inter-racial marriage" and see who would now, in 2011, defend that.) I can just imagine a Chick-fil-A type company in the 1950's  supporting laws baring inter-racial marriage and everyone rushing in with their distorted Biblical morals supporting that too. The conversation is exhausting, but it is also about basic civil rights.

    Another MNB user wrote:

    My issue with Chick-fil-A isn't what the company believes, as long as they are abiding by all applicable discrimination laws, they can believe what they want. My issue is  that they are supporting an organization that is actively trying to take away rights of US Citizens, who happen to be gay, because of what the bible says.

    MNB user Jeff Gartner wrote:

    I probably should not fan this any more, but this one writer's comment just got to me … "They are very likely only anti-gay in this sense – they do not subscribe to the gay agenda." Well, if you think there's a gay "agenda," then yes, you're anti-gay.

    Based on observing and listening to the many gay people with whom I've been acquainted, I didn't realize there existed a "gay agenda." You wouldn't know they're gay unless they specifically told you. They don't wear big buttons or have bumper stickers or personalized license plates that shout they're gay. I don't hear any agenda from them, but rather the same aspirations and stuff we talk about.

    When you look at the survey data about anti-gay attitudes, it's heavily weighed to people older than 45. For most younger people as our daughters and their friends all in their 20s, and I would guess your children and their friends, this isn't an issue at all. It also isn't an issue with my wife and I and most of our friends, I guess we're fortunate to be with either a more accepting group of friends and colleagues (or perhaps we're incredibly youthful, I say that in jest). Twenty years from now, we're going to look back and wonder what the fuss was all about.

    Thanks, and please don't stop continuing to bring these type of social and political discussions into your column. After all, they contribute to our culture, and it's our cultural insights that lead us to innovate and successfully compete and contribute to others in turn.


    To me, this is a fascinating discussion because it occurs at the juncture of commerce, culture, religion and ethical considerations.

    Yesterday, one MNB user who described himself as a “Christian businessman” said, “KC, maybe one day we will meet and I can help you understand life as God has created it.”

    To which I responded:

    I realize that this may annoy some folks, but...what you really want to teach me is life as you believe God has created it.

    Which is fine. But is not the same thing.


    Which prompted MNB user Ken Wagar to write:

    I suspect you will take significant grief for the statement above. I believe it is one of the wisest things you have ever put in print and should be remembered by all of us regardless of the details of our beliefs!!!!!

    My position is this.

    I am way too old to care what other people do in bed, or who they do it with. It matters to me not one bit, nor do I think I have any right - moral, ethical or legal - to question or judge it.

    I also believe that if there is a God, he - or she - is a nurturing and loving being who cares only about people being loving and good, and not who they love.

    And to those who would suggest to me that I should not have the temerity to speak for God, or to presume what he or she thinks or believes, I have a one-word response:

    Exactly.

    (Full disclosure: I stole this line from Ted Alexandro. But I believe it with all my heart.)
    KC's View: