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    Published on: March 29, 2012

    This commentary is available as text or video. They are similar in content, but not identical. Enjoy both, or either.

    I started the week with what I called a gentle criticism of Wegmans. As we head toward the end of the week, let me offer some gentle criticism of Apple...

    Mrs. Content Guy is verklempt.

    She has this great 24 inch iMac desktop computer that I got her more than five years ago for a big birthday. (I can’t tell you which one.) She got a notification the other day that she needs to update her computer, moving it from the current Mobile Me online system to iCloud. When she tried to do so, she was informed by the computer that she first needed to update her operating system to the current Lion OS. When she tried to do that , she then was notified that she cannot, because her computer is too old ... it is not designed to handle the new new system. So she cannot upgrade her operating system and cannot upgrade to iCloud, which is a problem because Mobile Me will stop operating at the end of June. The computer will still work, but its ability to synch with her iPhone, for example, will be severely compromised.

    As I say, she is verklempt. So who does she call? No, not the Apple Store. She calls me.

    So I go into the Apple Store and talk to the folks there and while they were very nice about it, the facts are the facts. And when I objected to the fact that they are essentially making her computer obsolete before its time, they said that Apple works on the premise that most people get new computers every three to four years.

    There is a broad philosophical issue at work here. The folks at Apple said that the simple reality is that technology moves forward, and at some point, advances get to the point where old computers simply cannot keep up. That is the nature of technology - it moves forward. And to expect Apple to keep old technology functional is to work against the basic nature of what technology is supposed to do.

    Now, I’ll buy this last argument. (Mrs Content Guy, not so much. She would argue that Apple should have left Mobile Me operational even while shifting to iCloud.) But I do think that Apple has dropped the ball in terms of customer relationships.

    There should have been a better way to inform customers about these changes and that the implications might be rather than just through a series of notifications that led us to an inescapable conclusion. And they could have offered some sort of rebate program on old computers to make the act of buying a new computer - to replace one that seems perfectly functional and efficient - a little less painful.

    In some ways, I think Apple is taking us for granted. With some reason, to be sure - we are totally committed to Apple products, to the Apple eco-system, and we’ll eventually replace the desktop machine with a new one. But we’re not going to feel good about it. Not this time.

    And that’s a shame. And a lesson for marketers everywhere.

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



    FYI...You can see all of the FaceTime videos by clicking here.

    KC's View:

    Published on: March 29, 2012

    by Kevin Coupe

    Talk about a meltdown in leadership.

    That’s pretty much what happened Tuesday on Jet Blue Flight 191,traveling from New York to Las Vegas, when the pilot “began behaving erratically in the cockpit, and then, after being locked out of the cockpit by the airline’s co-pilot, ran through the cabin yelling about Iraq, Iran, Afghanistan and al-Qaida,” according to the Washington Post story.

    Now, the good news is that the story had a happy ending. It so happened that many of the passengers were men on their way to a security conference, and they were able to restrain the pilot. The co-pilot landed the plane safely in Amarillo, Texas. And the passengers have received “a refund for the one-way fare, a voucher for twice the value of their original ticket, and letters from the airline” as compensation. (Judge for yourself whether that is enough.)

    But as the Washington Post writes this morning, “The airline’s response has gotten mixed reviews from fans and customers alike, with some cheering the passengers’ and crew’s swift actions while others questioned how much the airline was telling them. To some, JetBlue’s initial statements about a ‘medical situation’ didn’t seem to fit the stories trickling out about a pilot running up and down the aisles screaming that passengers should say their prayers ... Such a crisis is extremely difficult for any leader to manage in real-time, especially when the event involves what appears to be a mental condition that a company cannot, for obvious reasons, elaborate on publicly. JetBlue’s response was hardly pitch-perfect — the CEO, (David) Barger, seemed to try too hard to redirect his interview with Matt Lauer to the heroism of the passengers and the crew, while the very first thing he said probably should have been his sympathies for the passengers who went through the wrenching experience. And their biggest test is yet to come, as investigations begin taking place and as JetBlue’s leadership takes part in what is sure to be both an internal and external debate over mental health testing for pilots.”

    In the end, it appears that Jet Blue may have a credibility problem - and maintaining credibility may be job one for every leader. If one appears out of touch with events, or trying to shift the blame or focus, or not in synch with one’s employees and customers, then you run the risk of losing credibility. (It could be argued that the CEO of a major US retailer/wholesaler is facing that problem to some degree, if the tone of some of the emails sent to MNB recently are to be believed.)

    These kinds of challenges often face leaders - albeit not usually at 30,000 feet. But it strikes me that there is yet another challenge that leaders have to be trained to handle - the fact that so many of these events take place in the public eye. Video of the events on Jet Blue Flight 191 is all over the internet ... and so there is even less margin for error.

    All Eye-Openers for leaders in any venue.
    KC's View:

    Published on: March 29, 2012

    The Sioux City Journal reports that “governors of the three states where Beef Products Inc. idled plants Monday have pledged to work together to help the company refute rumors and misconceptions about its lean boneless beef.”

    Iowa Gov. Terry Branstad said yesterday that “Kansas Gov. Sam Brownback and Texas Gov. Rick Perry accepted his invitation to join him on a tour of BPI's plant in South Sioux City on Thursday. Nebraska Gov. Dave Heineman, who has a scheduling conflict that day, plans to send Lt. Gov. Rick Sheehy to the event, which will be open to local, state and national media.

    “By giving reporters a firsthand look at BPI's technology, processing and product, organizers hope to change the tenor of the two-week-old debate over BPI's Lean Finely Textured Beef, which critics have maligned with an unappetizing term.”

    BPI said earlier this week that it was suspending operations at three plants that manufacture the Lean Finely Textured Beef, which has become known as Pink Slime and come under attack because it was used as a filler in many packages of ground beef and not labeled, creating questions about transparency. The company has said that it will try to change consumer perception about Lean Finely Textured Beef over the next two months, but that if it is not successful it will be forced to close the plants permanently.
    KC's View:
    “The Daily Show with Jon Stewart” did a great - and really funny - job looking at the Pink Slime controversy last night, and you can see it here. (His conclusion seems to be that Pink Slime probably isn’t the worst thing we’ve been putting in our bodies...)

    It strikes me that there are a number of things going on here. There are questions being asked about what exactly this filler is, especially since it is washed with ammonia gas (for reasons of killing off foodborne illnesses). There are questions about transparency. And there certainly issues about how companies can and should deal with controversies fueled by social media.

    As I think about it, here are the questions I need to get answers to.

    How come the ground beef I’ve been buying from Stew Leonard’s for the past 28 years has never contained, according to the retailer, any Pink Slime? Does that mean it has been better than the stuff being sold that has contained it? Less safe? More nutritious? More or less expensive?

    In the end, how come some retailers have sold meat without it?

    Published on: March 29, 2012

    The Boston Globe this morning reports that in a speech before the Greater Boston Chamber of Commerce, Wegmans CEO Danny Wegman said that his company would like to open a store in downtown Boston, and is considering a possible location in what is called Downtown Crossing, east of Boston Common and west of the financial district.

    “We believe we belong in Boston, not just in the suburbs,” Wegman said, noting that the company does not have a site chosen.

    According to the story, “Wegman already has plans to launch grocery stores in Burlington, and a smaller 70,000 square foot store in Chestnut Hill, making it almost half the size of the company’s typical supermarket.

    “That format would likely be the model for a grocery store in Boston. Wegman said he is fascinated with the Boston market because it is the most highly educated and densely populated market the chain has ever served, but it is also a scary experience to change its successful model.”
    KC's View:
    Wegmans has been clear about not expanding beyond its capabilities, but it strikes me that it will be really interesting to see what it comes up with for a 70,000 sq. ft. store. The challenge will be to maintain its leadership in fresh foods, its strong value image, and to do so in real estate where costs are almost certainly going to be higher than in the suburbs.

    The result could be a game-changer for the company.

    Published on: March 29, 2012

    Delhaize-owned Food Lion has launched what it is calling a “new brand strategy” in 268 stores in Virginia, West Virginia and North Carolina.

    According to the company, “These markets are the first stores in 2012 to unveil the new strategy, which is based on customer feedback and continues to position the company for future success ... Food Lion's new brand strategy offers customers lower prices on 6,000 items throughout the store and access to quality store brand products at lower prices, including the company's ‘my essentials’ value tier, as well as fresh produce and an easy and convenient shopping experience.”

    "We invite customers to visit their local Food Lion, where they will experience firsthand the enhancements we have made in our stores," said Cathy Green Burns, president of Food Lion.  "As part of our new strategy, we are committed to being recognized as a price leader, making our stores easier to shop, offering the greatest value in store brands and providing fresh produce.  We believe our new brand strategy enables us to better serve our customers in these markets." 

    To celebrate the launch, Food Lion is holding grand opening festivities at all of the 268 stores, including providing the first 200 customers at each location a bag of free groceries on March 28.  In addition, the company plans to donate $50,000 in store brand food products to local charities, including $20,000 to Operation Homefront Hampton Roads, $10,000 to the Blue Ridge Area Food Bank, $10,000 to Feeding America Southwest Virginia and $10,000 to FeedMore. 
    KC's View:
    Food Lion seems very, very focused on re-establishing its value leadership in its markets ... and since I think Cathy Green Burns is one of the smartest and nicest people in the business, I have nothing but good wishes for them.

    Published on: March 29, 2012

    Dow Jones reports that Walmart “will lower grocery prices by $1 billion this year, hoping customers will come in for the reduced costs and then fan out to other parts of the store.” The story notes that Walmart “is taking the step to continue or increase the progress its U.S. stores began to see in the second half of last year, when U.S. comparable-store sales turned positive.

    “While the $1 billion sounds like a large number, Wal-Mart had $145 billion in grocery sales last year in the U.S. Wal-Mart calls the approach ‘investing in price,’ which equates to reducing prices or not passing along the cost of inflation, so that the retailer's margins will be dinged. The hope is that lower prices will generate enough additional customer traffic and loyalty to make up for the short-term sacrifice in profit.”
    KC's View:
    It is all about girding for the coming war against Amazon on one front, and against existing brick-and-mortar retailers on a number of other fronts.

    Published on: March 29, 2012

    USA Today reports that Starbucks has incurred the wrath of vegetarians with reports that it uses ground-up cochineal beetles - a government-approved food coloring - in its Strawberry Frappuccinos.

    According to the story, “a Vegan website, ThisDishIsVeg.com, this month warned its readers that Strawberry Frappuccino was no longer vegan and now is using the beetles for coloring. Starbucks made the switch in January when it aggressively moved away from artificial ingredients.

    For Starbucks, which is eager to get artificial ingredients out of its food and drinks, it's an unexpected PR problem. Never mind that Frappuccinos, in total, represent a $2 billion global business for Starbucks. ‘This is the quintessential modern day PR crisis,’ says PR expert Katie Delahaye Paine. ‘You try to be good and green, and someone is going to get you for it’.”
    KC's View:
    One MNB user asked yesterday if the people so upset about Pink Slime will be similarly outraged by the unlabeled use of ground-up cochineal beetles ... which, when you think about it, sounds even grosser than Lean Finely Textured Beef.

    Published on: March 29, 2012

    In Minnesota, the Star Tribune reports that Walmart is getting aggressive in the market with ads that engage in a direct shopping cart comparison with Cub Foods, suggesting that it is lower on 39 standard items. Here’s how the story frames the competitive situation:

    “It's difficult to believe that Wal-Mart's price comparisons surprise anyone,” the story says. “Overall, Wal-Mart is the low price leader unless a person is shopping store brands. Aldi's prices are even lower than Wal-Mart's, but Aldi is mostly store brands, not name brands. Still, Target shoppers with a Red Card can usually even beat Wal-Mart's prices. Cub's prices are usually found to be slightly lower than Rainbow's, according to Checkbook, except when couponers take advantage of sale items and double coupon days at Rainbow on Wednesdays and Saturdays.

    “During the recession, more shoppers began to focus on price, but there are many reasons why we choose a supermarket besides price, said Luke Friedrich, spokesman at Cubs Foods.

    “Friedrich did not deny Wal-Mart's lower prices, but focused on Cub's other advantages. During the recession, more shoppers began to focus on price, but there are many reasons why we choose a supermarket besides price, said Luke Friedrich, spokesman at Cubs Foods. He adds that Cub has been focused on delivering locally-sourced products, a full-service deli and bakery, customized selection and customer service. That focus also includes community investments such as supporting Second Harvest Heartland.”
    KC's View:
    Somehow, I have a feeling that Cub did not mean to concede the price advantage to Walmart. In theory, I have to say that I agree with the approach that in addition to price, you have to have other things to brag about ... because price advantages will only get you so far.

    Published on: March 29, 2012

    CNBC reports that Jamba Juice plans to “put its JambaGo kiosks in 400 to 500 schools by the end of the year. The company has already opened 30 kiosks in a pilot program.”

    CEO James White says that the company is positioning itself as a healthy alternative at a time when many schools are banning sugared soft drinks and trying to upgrade their meal offerings so they are tasty and more nutritious.
    KC's View:
    I’d settle for edible.

    I like this idea. A lot. I was really impressed when I recently went to my old college, Loyola Marymount University, and saw that there was a Jamba Juice on campus. A big upgrade from what they were offering 35 years ago. (God, I’m old.)

    I also like this idea because it reflects a willingness to go into unorthodox locations in search of new business, new customers and new loyalties.

    And...it probably is not a coincidence that Jamba Juice is making such moves at a time when Starbucks is getting into the juice business.

    Published on: March 29, 2012


    • The Wall Street Journal reports that PepsiCo-owned Quaker is updating the symbol on its oatmeal boxes, giving “Larry” (as the Quaker man is known internally) a haircut, as well as making him appear to be thinner and younger. The goal, according to Justin Lambeth, Quaker's chief marketing officer, is to keep the 134-year-old brand "fresh and innovative.”

    • The Boston Globe reports that restaurant chain Legal Sea Foods is teaming up with food distributor Agar Supply “to launch a new label that will allow restaurants and supermarkets to track fresh fish all along the supply chain. According to the story, “Legal Sea Foods wholesale division, Nor’Easter, will supply nearly all of the fresh fish marketed under Agar’s ‘Nautifish’ brand, including haddock, cod, salmon, and tuna. Nor’Easter is creating a barcode label on each package that will include details such as when the seafood was caught, the name of the boat and captain, the region where the fish was caught, and when it was prepared for packaging.”

    • Lubbock, Texas-based United Supermarkets announced that it “will help its store guests combat the rising cost of driving this spring by offering a fuel discount with their in-store purchases. Between March 28 and May 22, guests will earn discounts on their fuel purchases at all United Express fuel stations in Lubbock, Amarillo and Wichita Falls when they shop at United Supermarkets, Market Street and Amigos locations. This includes all United Express locations in Wichita Falls.”

    • Linda M. Doherty, president and CEO of the New Jersey Food Council (NJFC), has received the Food Marketing Institute (FMI) Donald H. MacManus Association Executive Award in recognition of her outstanding leadership and accomplishments in the food distribution industry. The award was presented at FMI’s Day in Washington.

    • The Food Marketing Institute (FMI) said yesterday that it supports the introduction by Senator John Thune (R-SD) “of an estate tax repeal bill today that will negate an unfair form of double taxation that threatens family-owned grocers.”

    “Senator Thune is a strong advocate for family-owned supermarkets in the United States,” FMI Senior Vice President of Government and Public Affairs Jennifer Hatcher said. “The estate tax forces business owners to spend their fortunes on estate planning instead of expanding their businesses and creating new jobs.”
    KC's View:

    Published on: March 29, 2012

    • Ruddick Corp. said yesterday that as part of its change of name to Harris Teeter Supermarkets Inc., it is making changes to its executive roster.

    Thomas W. Dickson has been named Chairman of the Board and Chief Executive Officer, previously having served as Chairman of the Board, President and Chief Executive Officer; Frederick J. Morganthall, II, has been named President and Chief Operating Officer, previously having served as President of Harris Teeter, Inc.; John B. Woodlief has been named Executive Vice President and Chief Financial Officer, previously having served as Vice President-Finance and Chief Financial Officer; and Rodney C. Antolock has been named Executive Vice President, previously having served as Executive Vice President, Operations & Merchandising, of Harris Teeter, Inc.

    • Irene Chang Britt, the top marketing executive at Campbell Soup, reportedly will soon leave that job to run the company’s Pepperidge Farm division, replacing Pat Callaghan, who is retiring after more than 30 years with the company.
    KC's View:

    Published on: March 29, 2012

    Got a bunch of responses to yesterday’s column by Kate McMahon in which she questioned why some companies engage in Dad-bashing in their commercials - portraying us as ineffective dolts as a way of selling product - and lauded Daddy bloggers who fought back against one such campaign.

    One MNB user wrote:

    Loved Kate's blog, and your comments.  I have seen too many single "fathers" in my lifetime.  Frankly, the whole diaper thing is why I never had kids!  I changed one on a newborn at age 15 and swore I would never do that again.  At 59, I have stood to my word.  More power to those who have/can do it!  LOL!

    From another reader:

    The stereotypical suburban dad has seemingly long been the only non-protected species on TV.  What other group has been portrayed so consistently as buffoons, dopes or just unwittingly incompetent?  To quote Homer (Simpson, that is): "It's true - we're so lame!" - - and try to imagine the response if any other demographic group was shown the same way.  Most of the time, if the ad is good-natured and amusing, I'll give it a pass.  But these days it seems there's not much room for miscalculation - - the protests are coordinated and immediate.  So maybe it's time to update David Ogilvy:  "The consumer isn't a moron, he is your husband".  On the other hand, if we collectively decide there's no room for parody, things are going to get real boring, real fast.

    Another MNB user wrote:

    As political correctness has encroached on every aspect of our lives the one remaining demographic that is still acceptable to poke fun at is...MEN.  Notice how prevalent it is in advertising and sitcoms. White men in particular! Just notice if you haven't already.... You fit the demographic!

    I’m white?




    More about Supervalu...as one MNB user wrote:

    People keep commenting about how SV is laying people off but executives are not taking pay cuts, and it made me wonder:

    Jim Sinegal only paid himself something like $300,000 a year, which comparatively is not a lot at all. His real rewards came from stock options and bonuses when the company performed well.

    Maybe SV could take a page out of Costco's book?


    I think that’s the best model for a CEO. It is, however, not used nearly enough.

    And from yet another reader:

    I am a current Supervalu employee, I was here when the purchase of Albertsons came down.  A big hush hush deal across the board.  Here was SVU – established, making good numbers, prospering in the market, then we purchase Albertsons who was on the brink of bankruptcy.  Triple our portfolio and costs across the board,   on top of all of this, we adopt the struggling company’s policies and practices or better yet, send it off shore to be processed, create Supervalu India.  Another great move!!!  NOT.

    Now where are we?  Stock has tanked, morale is pitiful, and basically upper management DOESN’T CARE!  We don’t feel any loyalty from the company at all.
    KC's View: