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    Published on: October 27, 2011

    This commentary is available both as text and video. The two versions are similar, but not identical. Enjoy either, or both.

    Hi, I’m Kevin Coupe, and this is FaceTime with the Content Guy.

    The anniversaries of two major technological breakthroughs are being celebrated this week. One got a lot more attention than the other, mostly, I think, because it is more recent and relevant. But the other is no less important, in part because it opened our minds of possibilities that had not yet been considered.

    The top-of-mind breakthrough, of course, is the iPod. It was just 10 years ago last Sunday that the iPod became available to consumers, and with it came an enormous shift in the balance of power. No longer would the music industry - retailers and manufacturers alike - be able to dictate to the listening public how and what we would listen to. We would not have to buy albums - whether on tape or vinyl or CD - that were configured the way they wanted. No, we could buy songs the way we wanted them, and create albums and playlists all our own. It was the disintermediation of traditional industry, and the placing of control firmly in the hands of the consumer. Not only that, technology has made it possible to load our iPods with songs never heard or released by the mainstream music industry - artists could go around the so-called tastemakers and go right to the ultimate listener.

    When the first iPods came on the scene a decade ago, they changed the world for a lot of people. Not just the traditional music industry and consumers, but think of the competition - Sony, which until that moment was at the forefront of music listening devices with its Walkman line, in some ways has been playing catch-up ever since. And anybody buy a Zune lately?

    But as great a change as the iPod created in consumer habits, it can be argued that it was another event - 150 years ago this week - that changed the world and people’s expectations to a far greater degree. It was a century and a half ago this week that the transcontinental telegraph was completed.

    It was an enormous achievement, and created not just a foundation for connectivity, but also, I think, the expectation of connectivity that persists and grows to this day. Before that, if people wanted to send a letter from Missouri to California, for example, the Pony Express bragged that it could do it in less than two weeks. With the advent of a transcontinental telegraph, that suddenly seemed so...18th century. And talk about having as competitive impact - it may just be coincidence, but the Pony Express went out of business on the same day as the transcontinental telegraph went live. (It is a lesson that perhaps the US Postal Service should learn. But hasn’t.)

    Sometimes we forget that the marvels of our age are built - philosophically and spiritually, at least - on the marvels of the past. To the people of 1861, I’m sure that the telegraph was every bit as fantastic as the iPhone 4S. Maybe more so, because their expectations were lower.

    One other thought, if I may...

    The transcontinental telegraph was completed in 1861, just months after the beginning of the US Civil War, and a time of enormous strife in this country. It connected east and west at a time when north and south were rupturing. It is good to know that it was within the American character to make progress even as the rest of the world seemed to be falling apart; we must hope that such achievement, even in hard times, still is within the American character, and that we will continue to move forward despite - or maybe because of - all the challenges we face.

    That’s what is on my mind this morning. As always, I’d like to hear what is on your mind.

    KC's View:

    Published on: October 27, 2011

    by Kevin Coupe

    I’ve only just cracked open the new Steve Jobs biography by Walter Isaacson, but I have been reading a lot about it in the media. The coverage in Advertising Age struck me as particularly interesting, since it made a specific observation with broader implications.

    The story says:

    “It is a portrait of someone who innately got marketing but also worked hard at it, putting time and effort and money and passion into the work and the key relationships behind it. Sure, he reamed out ad and PR folks left and right, but he never let short-term anger interfere with the long view. As such, the Apple-TBWA union has been an outlier in a world where the client-agency relationships are dominated by impatience, fear of risk, bean-counting procurement processes, and tenures of marketing executives that barely outlive a fruit fly.”

    That’s an important and Eye-Opening observation, that Jobs “never let short-term anger interfere with the long view.”

    These days, that’s not always a quality shared - or valued - in a lot of companies. Short-term profits and performance and tactical moves have become more important than the strategic long-term view, which should be designed to foster sustainable excellence.
    KC's View:

    Published on: October 27, 2011

    Walmart announced yesterday that it will move its apparel office out of New York City and back to Bentonville, Arkansas, reversing a move that it made back in 2009, when the company deemed it important to be more fashion-oriented.

    In a memo to staffers, Andy Barron, executive vice president, softlines, for Walmart U.S., said: “When you consider our core strategy centered in basics and fashion basics, in order to execute, our offices do not need to be located in New York. Also roughly 40 percent of our apparel planning, replenishment and modular execution associates are in Bentonville today. It just makes sense to unite our apparel efforts in one location.

    “The function will transition to Bentonville over the next few months, with the goal to be complete by Feb. 1. During this time, we are working with the associates in New York and hope to relocate as many as possible to Bentonville.”

    The Bloomberg story about the move notes that Walmart’s “office on Broadway between 37th and 38th Streets opened in 2009 has about 275 employees handling functions including product development and buying,” and that “US Chief Executive Officer Bill Simon is focusing on basic apparel after attempts to appeal to more fashion-focused shoppers failed. Wal-Mart told investors this month that purchases of items such as socks, jeans and underwear were improving while overall comparable-store clothing sales still were declining.”

     “We don’t need to be on Broadway to sell socks and underwear and T-shirts,” David Tovar, a Walmart spokesman, told Bloomberg.

    The move will result in some personnel changes, Bloomberg writes:

    “ Senior Vice President Lisa Rhodes, who currently heads the apparel business, will leave in July after a transition period, Tovar said. Wal-Mart promoted executives Jeff Evans and Marybeth Cornwell to run portions of the unit after Rhodes leaves.

    “Rhodes was the unit’s third leader in the past five years.Segment chief Dottie Mattison resigned in July 2010 as her push for more colorful items and exclusive brands, including one from pop star Miley Cyrus, failed to lift sales. Her predecessor, Claire Watts, left in 2007 after failing to make Wal-Mart’s apparel appeal to fashion-focused shoppers with ads in Vogue magazine and new lines like Metro 7.”
    KC's View:
    So can we assume that Walmart is going to stop making noise about being in the fashion business, and just go with the reality that it is in the socks and underwear and t-shirts business?

    Or will the Bentonville Behemoth at some point suggest that Arkansas is the real center of the fashion universe?

    So let’s see. Walmart is in the fashion business, then out of the fashion business. Opening offices in New York, then closing them. Closing its Marketside small store format even as it open small store Express stores. Improving its health care coverage for employees, then reducing it. Reducing selection, then increasing selection. Pledging that it will match competitors’ prices through the holidays, but not online competitors’ prices.

    I’m all in favor of adjusting to changing market conditions, but a guy could get whiplash just trying to keep track of Walmart’s various moves.

    On the one hand, it looks like Walmart is just cutting all the dead wood, trying to focus on the stuff that’s really important. But there also is a sense of desperation.

    Look at all these changes, and it isn’t hard to imagine that at some point in the near future, Walmart will shut down its Northern California offices and move its dot-com operations to Arkansas (which in addition to being the center of the fashion universe, also is a core hub for all internet innovation).

    I thought that the reason Walmart thought it was important to open fashion offices in New York and dot-com offices in Northern California because the company needed to have a more expansive view of the world, and that it made sense to make sure that at least some people in the company were not drinking the same Kool-aid every morning, not going to the same restaurants, churches and country clubs, not living the same lifestyle with the same friends.

    But maybe that’s not so important anymore ... but maybe it isn’t important anymore because Walmart is taking the short view, not the long view. Or maybe, Walmart now is taking the long view, when it was taking the short view.

    Like I said, a guy could get whiplash....

    Published on: October 27, 2011

    The Los Angeles Times reports on the “conundrum” facing Trader Joe’s, which “has expanded from more than 20 locations in Southern California in the 1970s to more than 360 shops in far-flung places such as New York, Chicago and Des Moines, Iowa. Its smallest shop, at 5,500 square feet, is in Boston. Last year, the company pulled in an estimated $8 billion in sales, roughly on par with rival Whole Foods Market, based in Austin, Texas.” This expansion comes after “decades cultivating an image as the cozy neighborhood grocer,” the the Times writes that Trader Joe’s has to figure out “how to maintain the eclectic, friendly vibe that has garnered it legions of faithful shoppers, while expanding at a brisk pace.”

    The always reliable Burt Flickinger, of Strategic Resource Group, tells the Times that Trader Joe’s “is seeking to expand the size of its shops by building new stores and also renting bigger retail spaces in new markets. A 13,000-square-foot Trader Joe's opened in Hollywood last year. Some stores, such as a location in Silver Lake and another in Eagle Rock, have already expanded.

    “The average Trader Joe's store probably will increase from between 10,000 square feet and 15,000 square feet now to 15,000 square feet and bigger, Flickinger predicts. ‘Trader Joe's can make double or triple the sales volume per week at a bigger store than at a small store, while checkmating competitors,’ he said.”
    KC's View:
    I’ve been to Trader Joe’s stores all over the country, and I have to admit that I’ve never been aware of any sort of diminution of the company’s unique culture and approach. I’m sure that this is an issue that the company has to pay close attention to, but it seems to me that whatever they are doing, it seems to be working.

    Published on: October 27, 2011

    The Wall Street Journal reports that while “stable food prices have been a silver lining in the weak economy,” the US Department of Agriculture (USDA) is now saying that “it expects retail food prices to increase 3.5% to 4.5% this year, after climbing just 0.8% in 2010, the slowest rate since 1962 ... The midpoint of the new USDA outlook signals the sharpest acceleration in the food inflation rate from one year to the next since 1978, and makes the increase itself the biggest since 2008, when prices rose 5.5%.”
    KC's View:
    And, this will be happening at the same time as the middle class is being squeezed, and outrage is growing over an increasingly skewed playing field that seems to constrict the buying power and mobility of a larger percentage of the US population.

    Sounds like the definition of a perfect storm to me.

    Published on: October 27, 2011

    The Dayton Business Journal reports that demand for Yuengling beer, which Ohioans used to bring back from Pittsburgh in the trunks of their cars, in Ohio has actually caused a two week delay in plans to start selling the beer there.

    According to the story, it will now be available on November 14 instead of on October 31, because of sky-high demand.

    Because of projections, the brewery “opted to roll out Yuengling launches in Ohio in phases. The company introduced Yuengling into the Cleveland and Columbus markets Oct. 3 and slated the beer’s arrival in Dayton for Oct. 31.

    “However, demand for the beer was greater than expected, with Cleveland sales alone doubling projections ... Because of the demand in other markets ... the company opted to delay the sale of packaged beer until enough product is available to distribute it fairly.”
    KC's View:
    Nice problem to have, huh?

    Published on: October 27, 2011

    • The New York Times reports that Heinz is launching a new ketchup - Heinz Tomato Ketchup Blended with Balsamic Vinegar - on November 14 ... but until late December, it will only be available via the company’s Facebook page. It will only be in the final days of 2011, the story says, that the product will become available in supermarkets.
    KC's View:
    Watch for this to be a growing trend ... appealing to the core audience, using the internet and social media to build buzz, and - to some degree, and perhaps with greater implications - testing the extent to which traditional retailers can be disintermediated from the buying experience.

    Published on: October 27, 2011

    The Tennessean reports the Tennessee Obesity Task Force is asking the state legislature will make moves “to ensure that all schools are complying with the state’s 90-minutes-a-week mandate for physical education, enact a tax on sugar-sweetened soft drinks, and increase fines for speeding in school zones.

    According to the story, “The soda tax bill, as it has been dubbed, would place a 1-cent-per-ounce tax on bottled, sugar-sweetened beverages purchased at convenience and grocery stores, but reduce the state food tax by 1 percent.”

    And, “Increasing the fine for speeding in a school zone by $50 could make it safer for kids to walk and bike to school. In addition, the money would go to the Safe Routes to School program, which encourages exercise through walking or biking to schools.”

    The story notes that “two-thirds of Tennesseans are either obese or overweight, producing health issues that some estimate cost the state nearly a half-billion dollars annually. Tennessee was the fourth-most-obese state last year, an improvement from the second spot in 2009. The 500-plus-member Tennessee Obesity Task Force creates and lobbies for policies that address those grim statistics.”
    KC's View:

    Published on: October 27, 2011

    • The Boston Globe reports that Massachusetts state officials are saying that “they will improve oversight of seafood sales in Massachusetts after the results of a Globe investigation published this week revealed widespread mislabeling at area restaurants, and few controls to protect diners from potential health risks and overpaying for fish ... The five-month investigation showed that consumers routinely and unknowingly pay too much for less prized fish or buy seafood that is something other than what is advertised on menus. Nearly half the 183 fish samples reporters purchased at restaurants, grocery stores, and seafood markets were sold with the wrong species name.”

    • Food Lion yesterday unveiled 25 newly-remodeled stores in the Lynchburg, Va., and Danville, Va., areas that have been under construction since March and that, it says, “will offer customers an improved shopping atmosphere with expanded product selections at great prices.”

    “This is an exciting time for Food Lion and our customers, as we celebrate a fresh, new look, a greater selection of products and a renewed focus on service,” said Larry Cassels, Director of Operations for Food Lion’s northeastern region encompassing the Lynchburg, Va., and Danville, Va., markets.  “We are enhancing our customers’ shopping experience through a more inviting interior design, and we have also expanded our fresh departments, including produce, meats and deli/bakery. Additionally, as part of our remodeling efforts, we have new customer service and checkout areas to provide a speedy and efficient checkout process for our customers.”

    • The National Cooperative Grocers Association (NCGA) and its 122 member and associate food co-ops said yesterday that they will be joining in the observation of the International Year of Cooperatives that has been declared by the United Nations. The observation, according to the announcement, “aims to increase public awareness about cooperatives and to promote the formation and growth of cooperatives worldwide.”
    KC's View:

    Published on: October 27, 2011

    Lots of reaction to Kate McMahon’s column yesterday, which criticized Dr Pepper for its introduction of Dr Pepper Ten as a “for men only” drink ... suggesting that perhaps it was misguided to be condescending to women, who still do most of the shopping. Besides, she said, the commercials aren’t funny: “When the joke is sexist, demeaning, offensive or part of a lame marketing strategy ... that falls as flat as day-old soda,” she wrote.

    MNB user Larry Lyons wrote:

    Really ladies!? Lighten up! It’s a commercial.

    Guys are constantly portrayed as browbeat, hen-pecked husbands, buffoons in the eyes of their children, intellectually inferior to women.

    The DP marketing guys got our attention…hats off to them.

    Another MNB user wrote:

    So – we have grown men in football uniforms wearing pink for breast cancer awareness. (Who is not aware of breast cancer?)

    I don’t see the WNBA players wearing special colors to make people “aware” of prostate cancer.

    Women with hyphenated names. One name is not enough??

    This is the most emasculated place in the world. My goodness gracious… really? BIG deal – who cares if Dr. Pepper wants to advertise to men. So what if you don’t think it is funny…. It is hardly sexist… It is a benign commercial – but once again we have to justify ourselves for being men. PLEASE.

    Now you are taking my time away from curling my hair and painting my nails so I can respond to this dribble.

    Take all of the PC and put it where it belongs -  in a cave where us men live.


    From another MNB user:

    The campaign got you to write about it…got Ellen to talk about it on national television…seems like Dr. P got what they wanted – attention to a declining brand.  And the Old Spice commercial you referenced – entertaining and titillating, I’m sure for many female viewers – but it didn’t work for Old Spice – created buzz, but didn’t drive sales.  This won’t either.  Just create some interest in shelf space customers have been ignoring.  Overall, soft drink sales are declining for all brands…desperate times give us a real panacea of marketing moves.

    And, from another reader:

    Loosen up a bit.  Why can't anyone have a little fun anymore?  Why does everyone think the world revolves around them and everything, including silly marketing ads, has to be targeted to the entire population as opposed to a small segment?

    One MNB user had a very good idea:

    I think Dr. Pepper should come out with a female version of the diet drink , advertise, and have a Superbowl competition against the two (similar to Bud and Bud Lite in past years) and let the winner be based on the highest sales of the two between now and the Super Bowl - would be a great sales promotion and way for women to retaliate.

    From MNB user Sally LeBoeuf:

    I agree with you! I have watched the commercial several times and at first could not believe what I saw. Joke?? I don't think so. Down with the Dr.

    MNB user John Thomas Finnegan chimed in:

    I've been a long time reader of MNB and enjoy your columns very much. I wanted to respond to your article regarding Dr. Pepper 10. My take on the whole 'Not For Women' marketing campaign is that given that Dr. Pepper is late to the manly diet pop game(See Coke Zero, Pepsi Max, etc...) DP had to do something to differentiate themselves from the pack. Which in this case meant, taking it up a notch in shock and awe factor.

    It would be one thing if they came out with a realistic ad that visually and verbally disenfranchised but the ads i've seen are centered around ultra masculinity. It is my belief that in doing so, they are trying to set a precedent that says "we don't take ourselves too seriously and neither should you"... and that is why i believe they are able to get away with it... BUT you were spot on in stating that whichever way the campaign is interpreted it has created buzz.

    And another MNB user asked:

    Kate, can we safely assume that you didn’t go out & buy a freezer full of Schweddy Balls Ice Cream?

    Good question. Kate responds:

    I'm not completely humorless! I got a big laugh out of Schweddy Balls on SNL and as an ice cream flavor, but prefer Half-Baked in my freezer.

    Kate’s perfectly capable of defending herself, but let me chime in here for a moment.

    I’ve known Kate a long time, and she’s anything but humorless or prurient. And I don’t think her column was, either.

    She wasn’t suggesting that products should not be targeted at men or women. Far from it. What she was suggesting was that lowest common denominator ads that seek to marginalize or condescend to an entire group of people - in this case, women - may not be the smartest idea in the world.

    The “Schweddy Balls” ice cream wasn’t meant to demean anyone.

    And for the record, I’m a guy ... and while I wasn’t overly bothered by the Dr Pepper Ten ads, I did find their portrayal of what men are and like to be fairly insulting. So I’m with Kate on this one.
    KC's View: