retail news in context, analysis with attitude

We continue to get email about the Maker's Mark brand equity story.

MNB user Pete Deeb wrote:

Maker’s Mark needs a new set of Marketing people or more intelligent ownership even after their pull back on the product change. If you read the statement they released carefully you will see that they have increased demand for their product and fierce loyalty  - signs that you can raise the price without damaging the product and the image! Additionally the statement about increasing capacity  says that the shortage is short lived (if it ever existed) and that future sales are promising.

MNB user Daniel Drotning wrote:

I am not a Bourbon drinker so perhaps I am being cynical.  I have not heard an ad for Makers mark in 20+ years and now the brand is all over the news for not doing something they should not have done in the first place.  Free advertising, can you say “new coke”?

MNB user Mark Boyer was thinking the same way:

This story reminds me of the Oscar Wilde quote: "There is only one thing in life worse than being talked about, and that is not being talked about."

Are these people incredibly clever to create some buzz (any buzz) about their brand, or did greed cloud their good judgment? Before this story came out, when was the last time you heard “Maker’s Mark” mentioned?

And, along the same lines, from another reader:

Some might suggest that the producers of Maker's Mark bourbon are simply playing out their own version of the 1985 marketing gambit, New Coke, which in the end, of course, was fabulously successful for the Coca Cola Co.  Maybe the Maker's Mark people are, in fact, crazy like a fox?

Maybe I'm naive, but I find it hard to believe that Maker's Mark engineered this to get free publicity. If they did, they're morons ... because almost all the publicity has been bad.

From another reader:

Maker's Mark must have looked with envy at the CPG industry, which routinely substitutes inferior ingredients and reduces package sizes without lowering retail prices - and gets away with it. Too bad for Maker's that their product is susceptible to closer scrutiny.

And from still another MNB user:

I just read the Maker’s Mark article and it reminded me of my own personal frustration with a consumer product.  My situation involves a hair care item that was a miracle product for my particular type of hair.  People would stop me on the street and ask what I did to my hair because it looked so great.  I could always depend on my curly style (maintaining the height and width that was arranged in the morning) to last all day.  Often, I wondered why I hated my hair throughout my early years, when, in fact, I had beautiful hair.  Well, a couple of years ago, I noticed that the fragrance and consistency of the product were different.  So was the outcome.  To this day, I have NOT been able to recreate the beautiful curls and style that I wore with confidence.  I wrote to the company, and they dismissed my note, telling me they did NOT change the formula.  I consulted many hairdressers, and they all confirmed my suspicions.  I again, contacted the company, and they told me to buy my products at a different salon.  That frustrated me even more, so I called them up and asked to speak to someone in their marketing department.  I was not given  a name, but, was told that no one was available to speak to me.  This company had a great product that they ruined, I’m sure, because it wasn’t profitable enough.  I should mention that this item cost $16.95 per can.  I would be willing to pay $50.00 per can to get my perfect hair back.  To date, I have spent hundreds on other hair care items, trying to find one that would work.  No luck.  My hairdresser is also constantly looking, but, is also not successful.  Don’t manufacturers realize that people will pay for something that they can count on?  Changing a formula doesn’t fool anyone.  As I continue my search for the right hair care product, I notice that their “new formula” is not selling so good.  Ya think?

Point taken.

On the subject of Walmart opening a Neighborhood Market that is twice as large as its usual grocery stores, one MNB user wrote:

Walmart has opened two Neighborhood Markets in former Albertson’s locations in Plano, TX.  I’ve been in one of them and it actually a pretty nice store.  It’s got a better product mix and more non food merchandise than the typical Neighborhood Market store.

So it is not an outlier. I still wonder if this all means that Walmart could be more open to US acquisitions than in the past.

From another reader:

I also wonder if Walmart would be interested in acquiring Fresh & Easy and converting them to Walmart Express, which has a similar 10,000 sq. ft. footprint. In the UK, Walmart purchased the Netto chain and converted the units to a slimmed-down version of its ASDA format. Wouldn't it be ironic under this scenario if WMT tapped its UK management to oversee the conversions?

Regarding another Walmart story, this one about the executive who wrote an email about disastrous February sales that ended up getting leaked to the media, one MNB user wrote:

These WM execs must have been absent from the first day of executive school, where they would have learned to be careful what you put in writing.

I suggested yesterday that the writer of the leaked email may get transferred to a night managers's position at a Bismarck, ND, Walmart. Which led MNB user Paul Sakariassen to write:

So perhaps a comment spoken or e-mailed was taken out of context and all of a sudden it is the buzz on every blog and financial news cast.  If true, it is worthy of the attention, if not it reinforces the general impression of internet gossip.

By the way, you seem to insinuate that being assigned to work in Bismarck, ND equates to being sent to Dante's ninth circle of hell, believe me, its a bit cooler and much more friendly. I am certain that the Walmart Supercenters in Bismarck are doing just fine with or without the "executive".

I knew that whatever town and state I used for that crack, I was going to get criticized by somebody. So I used Bismarck, just because it seemed cold and far away from Arkansas. No offense meant ... I've actually never been to North Dakota, but hope to go there someday. (It is one of only four states I've never been to.)

Yesterday, MNB reported that Don Marsh, the former CEO of the Indianapolis-based supermarket chain that bears his family name, has been ordered by a federal jury there to pay Marsh Supermarkets $2.2 million, the result of a trial that accused him of using corporate assets for personal gratification. The charges specifically were that he defrauded the company by using corporate funds to finance extravagant trips to places like China, Russia and Cuba - allegedly to check out products and investigate the possibility of exporting his own private label products - as well as to hand out gifts to family and friends, including several mistresses that he was keeping on the side, including one in a New York City apartment.

I commented, in part:

This is disgusting. No other way to describe the behavior of a guy who once had some measure of respect in the retail business, but who clearly squandered it because he felt that the business was there to serve him, rather than he being there to serve the business.

Disgusting. In so many ways.

Let's be clear about something. Most of the people I know who have run family businesses are good, decent, hard-working people for whom this kind of behavior would be anathema. I know people who own businesses who won't even take a water bottle off the shelf without paying for it, because they believe it is wrong, dishonest, and would set a bad example.

It also seems clear that Don Marsh simply doesn't get it. He continues his appeals and countersuits and protestations, ignoring the simple fact that in any legitimate organization, there is not one code of conduct for the CEO and another for everyone else. Leaders have to lead not from some sense of privilege, but one of responsibility, of service to the company, to the people who work there, and to the people who shop there.

One MNB user responded:

All company executives, regardless of the whether it is a large publicly traded enterprise or a small family owned business have fiduciary and ethical responsibilities to employees and shareholders.  The fact that Don Marsh headed a company that was once family controlled does not excuse him from these responsibilities but if anything puts him at a higher standard.

And MNB user Clayton R. Hoerauf wrote:

Trying to always be the optimist….. Maybe he just needs a career change. Mr. Marsh might want to consider a move to Illinois. He certainly has the qualifications for political office there.

Or Louisiana. Or New Jersey. The opportunities are endless.

Regarding the return to bankruptcy by Reader's Digest, which I described as seeming to have an entirely obsolete business model, MNB user Tom Redwine wrote:

I'm with you, Content Guy; RSS (and more specifically, Google Reader) replaced the Reader's Digest for me many years ago. I'm actually kind of surprised they made it this long.

I do have some fond memories of their "Laughter, the Best Medicine" section, though - those were the jokes I could tell just about anyone.

And, in response to yesterday's piece about Best Buy instituting a permanent price matching policy that it hopes will help alleviate showrooming, one MNB user wrote:

Beyond price matching, Best Buy simply has to make its bricks-and-mortar experience more compelling by better meeting the service needs of its customer base. That customer-oriented focus was much easier to attain when Best Buy had to compete with the likes of Circuit City, before the latter fired its experienced, if more costly, commissioned salespeople and substituted minimum-wage drones in their place, helping to seal Circuit City's fate.

Two different reactions to my commentary yesterday about the Heart Attack Grill and the death last week of a 58-year-old guy who ate there every day.

An excerpt:

I was not calling for the legislation or regulation of anything. And I noted that the Heart Attack Grill certainly was honest about its labeling.

But I am perfectly happy to stand behind my essential argument - that we live in a culture that seems to exploit people's weaknesses. I'm not so much talking about Alleman here as I am about the stated policy of free food to anyone over 350 pounds.

To me, that is just appalling. It shouldn't be legislated, it shouldn't be regulated. But it seems morally and ethically reprehensible. And yes, sort of like giving free heroin to an addict. (A bit of hyperbole? Sure. But defensible hyperbole.)

There's a broader issue here. It just seems to me that sometimes as a culture, we don't strive to be the best we can be and to appeal to the highest common denominators. Instead, we prey on people's foibles, we celebrate and ridicule them on reality TV shows, we give free, fatty food to morbidly obese people ... and then we call it entertainment, we call it free enterprise, and then we wonder why some people think that American exceptionalism may not be as exceptional as it used to be.

(I use as my guide in this area my friend Norman Mayne, who once told me that while he appreciates the fact that his Dorothy Lane Markets are so highly thought of, and even legendary in the business, the most important thing to remember is that each day they have to earn those adjectives all over again. So it goes, I think, for the notion of exceptionalism.)

I know it sounds like I am on my moral high horse here, and I don't mean to be. I'm as capable as being petty and negative as anyone, and I do it with a little bit of a soapbox.

It's just that I read the Heart Attack Grill story, and it makes me think that we can do better.

Not because we have to. Not because we are forced to. But because we can. And maybe, because we should.

MNB user Philip Bradley wrote:

Your Jesuit education is showing (re the discussion on the Heart Attack Grill).  And you couldn't be more right!
Thanks and keep it up.

This will come as a surprise to some of the folks who think I am assiduously anti-Catholic.

But MNB user Brian Jahn wrote:

Better be careful with your moral high horse… may be eating him later with a nice rich luscious chardonnay maybe a 2007 Newton Vineyard Red Label??


I've quoted this before in this space, but I think it is appropriate to do so again ... the playwright is Robert Bolt, the play is "A Man For All Seasons," and the speaker is Sir Thomas More, explaining why he must stand up against King Henry VIII:

If we lived in a State where virtue was profitable, common sense would make us good, and greed would make us saintly. And we'd live like animals or angels in the happy land that needs no heroes.

But since in fact we see that avarice, anger, envy, pride, sloth, lust and stupidity commonly profit far beyond humility, chastity, fortitude, justice and thought, and have to choose, to be human at all ... why then, perhaps we must stand fast a little - even at the risk of being heroes.

Sometimes I think we do not live in such a happy land.
KC's View: