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    Published on: January 27, 2012

    by Kevin Coupe

    I hope this is the last piece we have about celebrity chef Paula Deen for a long time. But there is a point here that needs to be made.

    As you no doubt know, Deen is the queen of fattening, butter-laden Southern cooking who recently revealed that she was diagnosed with Type 2 Diabetes three years ago ... and timed her revelation with a concurrent announcement that she has an endorsement deal with a pharmaceutical company that makes diabetes drugs. The overwhelming sense was that Deen did not tell anybody about her diagnosis when it took place because she did not want to damage her brand, and only went public when she could make some money on the deal.

    However, the business lesson here seems to be that Deen may have done more damage to her brand - because she is seen as being less than forthright, less than transparent, and highly manipulative.

    This morning, I noticed a piece on that pointed out that just this week, while hosting her Party At Sea vacation on a seven-day Caribbean cruise, Deen was spied eating a cheeseburger and a plateful of french fries. And the story suggests that Deen isn’t changing her life as much as she’s suggested in various interviews.

    Now, Deen can eat what she wants. She’s an adult. And she can endorse any food or drug she wants, and she’s entitled to make a living.

    But the lesson is that once you are perceived as violating the public trust, you are going to be under the public microscope for a long, long time ... and it is going to be more intense because of all the media properties out there in the internet age.

    I suspect this is going to get really old really fast, as everything Paul Deen eats in public is going to be the subject of speculation and examination.

    But that’s her fault.

    These events should open everybody’s eyes to marketing realities in 2012.
    KC's View:

    Published on: January 27, 2012

    The Wall Street Journal this morning reports on a survey conducted by WPP Group that looks at how global consumer brands are perceived in terms of both performance and citizenship.

    “In the survey,” the Journal writes, “consumers rated brand performance on qualities such as good value, high quality, innovation and leadership, while citizenship was measured by attributes including social responsibility, care for the customer, friendliness and helpfulness ... Overall rankings for companies showed an average score of 66 for performance and 54 for citizenship, on a scale of 100. The survey queried more than 40,000 consumers by mail in six countries—Russia, Japan, U.S., Germany, China and Brazil—over two years.”

    This gap is perceived as a possible problem, the survey suggests, because it suggests that industries and companies could be vulnerable to charges that they are not living up to broader ethical responsibilities in how they conduct business.
    KC's View:
    It is interesting that this story comes just as Apple is under enormous scrutiny for having Asian suppliers that are exploiting their workers - a story that seems to be gaining more traction with every passing day, and that some think will force CEO Tim Cook to make changes in sourcing and accountability.

    The Journal piece does not mention Apple, but does contain the following passage:

    Technology industry rated the overall best ranking in the survey. However, in the tech sector, brand performance far outranked perceived citizenship, 72 to 55.

    The study makes an excellent point - that ethical responsibilities are as important, or maybe even more important in the long run, as performance responsibilities in an age where spotlights can shine on anyone at any time.

    Published on: January 27, 2012

    The Los Angeles Times reports that Android tablet computers - such as those made by Amazon and Samsung - appear to be giving Apple’s iPad a run for its money.

    A study by research firm Strategy Analytics quoted by the Times says that “the iPad dropped to 57.6% of the tablets sold during the most recent fourth quarter, from 68.2% a year earlier, while Android rose to 39.1% from 29.0% a year ago, the report said. While Apple shipped 15.4 million iPads during the quarter, Android makers shipped 10.5 million tablets, more than tripling the 3.1 million they shipped a year earlier.”

    And, the story says, “The report also noted that global tablet shipments rose to 66.9 million units in 2011, nearly quadrupling the 18.6 million shipped in 2010.  Devices ‘shipped’ are those that manufacturers sell to retailers, and do not always represent final consumer sales numbers, especially when tablet makers overestimate the demand for their products.”
    KC's View:
    Two things worth noting here.

    One is the pace at which tablet sales seem to be growing - suggesting yet again that this is game-changing technology having a profound impact on how people interact with each other, with companies, and with technology itself.

    Second, I think the heightened competition is healthy, because it will stimulate even faster and greater innovations. Which will, in turn, generate more sales and profound consumer shifts.


    Published on: January 27, 2012

    The Wall Street Journal has a good piece about the steps being taken by JC Penney’s new CEO Ron Johnson, who formerly ran Apple’s retail business.

    Here’s how the story is framed by the Journal:

    “Shortly after taking the top job at J.C. Penney Co. last fall, Chief Executive Ron Johnson signed up for the company's email alerts. He was shocked by what landed in his inbox. The former Apple Inc. retail executive was deluged by sales announcements, sometimes two a day. He and his team counted 590 separate sales last year. They didn't bring in shoppers—Mr. Johnson's team found the average customer purchased only four times a year—but they did crush prices. Alarmingly, he learned nearly three-quarters of Penney's products sold at discounts of 50% or more.”

    The story goes on:

    “Now three months into his job, the new chief executive is hoping to turn things around with a far-reaching but risky overhaul of the department store format in an effort to lure consumers back to a chain that's often criticized as dowdy.

    “Mr. Johnson, who won plaudits for reinventing the retail experience with Apple stores' clean lines and empty space, laid out an ambitious plan Wednesday that involves carving stores into a warren of specialty shops, turning the high-traffic center selling space into an entertainment and hang-out area, and eschewing constant ‘sales’ in favor of lower prices every day.

    “The idea is to make stores more inviting, highlight brand names and gain more control over pricing.”
    KC's View:
    It is hard to know whether Johnson’s efforts will be enough to revive Penny’s and make it a vibrant, relevant retailer for 21st century consumers. And there will be those who will quibble with him, suggesting that cutting prices is the same as generating excitement, and that he is making a mistake with what essentially is an EDLP strategy.

    I think they’re wrong.

    First of all, I’m not sure he had much of a choice. All those sales and price cuts were not working. In most cases, if all you do is advertise sales - and you don’t actually have the lowest prices in town - all you really end up doing is devaluing your brand. Johnson has to reverse that trend.

    Johnson is trying to reinvent the department store for a new age, and he deserves a lot of credit for his efforts. We don’t know yet if it will work, but he had to do something.

    His goal - first and foremost - has to be to create a retailing environment that people want to come to. Where there are interesting products at fair prices. Where the experience is as much about effectiveness as efficiency. Where the combination of place plus products seems relevant. And that can offer something that online competitors cannot.

    I’m rooting for him.

    Published on: January 27, 2012

    Nice piece in the Seattle Times about this week’s Costco annual shareholder’s meeting, which turned into a love fest for retired CEO Jim Sinegal.

    “The employees' love for Sinegal came through,” the Times writes, “as did his appreciation.”

    "That was gut-wrenching," said Sinegal, referring to a video about his tenure with the company. "It's humbling to know you built your entire reputation on a $1.50 hot dog."
    KC's View:

    Published on: January 27, 2012

    • The Associated Press reports that PepsiCo said yesterday that three more of its brands have passed the one-billion-dollar-annual-revenue threshold - Diet Mountain Dew, Brisk and Starbucks ready-to-drink beverages. The story notes that “PepsiCo now has 22 billion-dollar brands, double the number it had in 2000.”
    KC's View:

    Published on: January 27, 2012

    • The New York Times reports that Carrefour is looking for a new CEO.

    According to the story, “The board of the company is talking with Georges Plassat, a clothing industry executive, to replace its current chief executive, Lars Olofsson, the sources said, and an announcement was possible within the week ... Mr. Plassat is chief executive of Vivarte, the Paris-based owner of retail clothing chains and shoe stores including Kookai, Chevignon and Naf Naf.”
    KC's View:

    Published on: January 27, 2012

    Let’s get this out of the way.

    I love Meryl Streep. Adore her. Have ever since I saw her do “Taming of the Shrew” in Central Park back in the summer of 1978.

    But I hated, absolutely hated The Iron Lady, her new biopic about Margaret Thatcher. I hated this movie as much as I’ve hated any movie I’ve seen this year.

    Not sure it is her fault. Streep’s performance is technically perfect, as she catches every Thatcher intonation and mannerism that we’re familiar with. But while I was watching her, I kept thinking of Frank Langella’s Richard Nixon in Frost/Nixon, in which the actor crawled inside the former president and exposed his innards. I never got that sense with Streep’s Thatcher. (To be honest, I would not have even nominated her for Best Actress this year.)

    The fault may rest with the movie’s writer, Abi Morgan, who takes a paint-by-numbers approach to the movie. Certain things have to be dealt with, and they are checked off, one by one, without any real insight into what or why Thatcher is thinking or feeling. Or, it could be the uninspired direction of Phyllida Lloyd, who also directed Streep in the execrable Mama Mia!.

    Thatcher is a fascinating figure who deserves an insightful, probing movie about her life and times. This isn’t it.

    I liked The Artist a lot more. The Artist is a French movie that has the distinction of being both black-and-white and (mostly) silent, tracing how a silent film star named George Valentin (Jean Dujardin) deals with the collapse of the silent film industry and the dawn of talkies. To say the least, he does not handle it well ... like a lot of business people, he does not recognize the inevitable march of time and technology, and is unable to adapt. (Big business lesson here!) He invests in a legacy project that proves to be irrelevant to the consumer, and struggles with the new paradigm.

    If I have one problem with The Artist, it is that the movie does not strike me as having any subtlety. The story is straightforward, and doesn’t really tell us anything about this period of time that we didn’t know from Singing in the Rain. But that seems like a minor kvetch under the circumstances, because The Artist is filled with winning performances (Berenice Bejo is especially wonderful as a starlet who sees her career blossom with the talkies), and is a highly entertaining hour and forty minutes at the movies. I’m not sure it merits the kind of Best Picture accolades that it has been receiving, but I enjoyed it. A lot.

    Nobody would ever mistake me for a particularly spiritual guy, but I want to unreservedly recommend to you a book that, essentially, is about the nature of spirituality. “Breakfast with Buddha,” by Roland Merullo, is a terrific novel about a not-very-spiritual guy who ends up on a cross-country road trip with Rinpoche, his sister’s spiritual advisor. The trip starts with this guy being highly cynical and snarky, though he has a sense that something is missing from his life; as they drive from New York to North Dakota, he is challenged by Rinpoche, and gives as good as he gets.

    The thing is, “Breakfast with Buddha” never gets sentimental or preachy. Far from it. The book is funny, immensely entertaining, and thoughtful without being sanctimonious.

    In the interest of full disclosure, I should note here that Kate McMahon read “Breakfast with Buddha” and recommended it to me because she said the main character, Otto Ringling, reminded her of me - we are about the same age, we’re both happily married with a couple of kids, we both struggle with our weight and would happily drive hours out of our way for a good meal or an interesting wine or beer, and sarcasm tends to be our default position. She was right about that - the similarities were often uncomfortable for me.

    “Breakfast with Buddha” is a wonderful book. Read it, and let me know what you think. (This could launch just the kind of offbeat conversation we specialize in here on MNB...)

    Two wine recommendations for you this week.

    The 2010 Boxhead Shiraz, from Australia, which is full-bodied and delicious.

    The 2010 Anne Pichon Viognier, from France, which has a nice clean feel to it with just a hint of sweetness.

    You’ll like both ... and if you can’t find them locally, they are both available from Nicholas Roberts Ltd., which powers the MNB Wine Club. (Find out more by clicking on the graphic at left...)

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    KC's View: