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    Published on: June 16, 2014

    by Kevin Coupe

    This morning's Eye-Opener actually comes compliments of Sara VanGrunsven, who happens to be a former student of mine at Oregon's Portland State University (where I team-teach a marketing course during the summer).

    Sara sent me a note yesterday to draw my attention to a story that reminded her of an essay she'd written for our class … and I thought that was so cool that it made sense to share it with you.

    The story - which took place in Louisiana but got play in newspapers as distant at the International Business Times and the Daily Mail in the UK, was about Miriam "Mae Mae" Burbank, who recently passed away. Rather than the standard open-casket wake, her daughters decided to do something different … and completely in keeping with Burbank's image when she was alive.

    "Rather than inside a casket, Burbank’s body was placed sitting in a chair near a circular table full of items that the woman loved … She held a menthol cigarette in one hand and a glass of Busch beer in the other. She also had a case of Busch beside her and a disco ball above the table." The tableau was created at a local funeral home, and reports say that family members thought it was a very good idea.

    Sara reminded me that during our class a couple of summers ago, one of the assignments was to come up with a favorite movie and derive a business lesson from it. (My goal was to get the students to think unconventionally about business conventions, and … just to be clear … I gave them copies of "The Big Picture: Essential Business lessons from the Movies." There are few things more obnoxious than teachers who write books and then require their students to buy them.)

    Sara's movie, as it happens, was Weekend At Bernie's … and the lesson that she took from it, if I recall correctly, was the power of a great brand. Bernie's brand was so powerful, she argued, that he didn't even have to be alive to throw a great party … which I thought was both an ingenious idea for a business lesson and a a great essay. (Sara is going to have a great career somewhere. I can just tell.) And the story of Miriam Burbank furthers the argument … she clearly had a distinct and differentiated brand, one so strong that it required special recognition, even in death.

    So here's to Miriam Burbank. And Sara VanGrunsven.

    Eye-Openers, both.
    KC's View:

    Published on: June 16, 2014

    USA Today reports that Unilever-owned Ben & Jerry's is transforming all of its 50 flavors, adjusting recipes so that they all will contain ingredients without genetically modified organisms (GMOs), as well as qualify for Fair Trade certification.

    To do so, the story says, the company had to find new sources for some 100 ingredients. The reformulation process is expected to be completed by the end of the year.

    Ben & Jerry's is based in Vermont, which has passed legislation banning GMOs. While the legislation is in the process of being challenged in the courts, Ben & Jerry's was a major proponent of the new law … which created an interesting conflict with its parent company.

    According to USA Today, "Just two years ago, Ben & Jerry's owner Unilever spent more than $450,000 to try to defeat the California GMO labeling ballot initiative, and Ben & Jerry's took heat for it from GMO opponents. Less than a year later, Ben & Jerry's announced plans to go non-GMO."

    For some, the transformation effort is not enough. "Some opponents of GMOs argue consumers should boycott Ben & Jerry's. Unilever, the multinational food company that bought Ben & Jerry's from Ben Cohen and Jerry Greenfield in 2000, is a member of the Grocery Manufacturers Association, the group that last week sued Vermont over the GMO labeling law. The Organic Consumers Association called for a boycott of all GMA members over the lawsuit."
    KC's View:
    This is the kind of stuff that makes me nuts. A company tries to do the right thing, even convincing its parent company that it should do something that some at the top might see as contrary to corporate interests, and some people want to penalize the company that is on their side.

    Geez, fanatics wear me out.

    I think that Ben & Jerry's did the right thing, something that is completely in line with its brand. Unilever did the right thing in allowing it. And I think we're going to see a lot more of this in coming weeks and months…

    Published on: June 16, 2014

    The New York Times reports this morning that if Amazon, as expected, unveils a new smartphone on Wednesday during a much-speculated-about new product launch, the aim will be to "close any remaining gap between the impulse to buy and the completed act."

    The Times notes that "Amazon has spent the last several years furiously investing billions of dollars on multiple fronts: constructing warehouses all over the country to deliver goods as fast as possible, building devices as varied as tablets and set-top boxes, and creating and licensing entertainment to stock those devices … The phone is the last and most crucial link in this colossal enterprise. It is a singular gamble for a company that, for all its technology components, is still primarily a merchant. Because even the smartest tech companies have trouble with phones."

    However, the story also concedes that "in building a phone, Amazon has advantages other phone makers do not. It can sell to its 250 million customers without a middleman. It can bundle features with the Amazon Prime membership club, as it just did last week with a new streaming music service." And Amazon's strategy can be seen in its test of the Dash - a kind of wand that Amazon grocery customers can use to scan bar codes, or use voice commands, that will allow them to restock their larders.
    KC's View:
    I'm fascinated to see what Amazon comes up with on Wednesday, especially since I've been arguing here for a long time that the company's goal is to create the path of least resistance between wanting and having … it doesn't just want to be "the everything store," but also "the everywhere store," and the "whatever you want store." That image has taken a hit of late as it has battled with some suppliers, but the broader strategy is very smart, very powerful, and potentially very dangerous to competitors that don't figure out what their differential advantage is going to be.

    It is typical Jeff Bezos style that folks invited to Wednesday's launch were sent, according to the Times, a copy of the 1965 children’s tale, “Mr. Pine’s Purple House,” which Bezos said was his favorite children's book. It's about a man who paints his house purple so it will be distinct from every other house on his street, and Bezos included a note that said, in part, "I think you’ll agree that the world is a better place when things are a little bit different."

    He'd probably use "Think Different" as a slogan, but it's been done.

    Published on: June 16, 2014

    Starbucks Corp. said over the weekend that it will help put its US employees who work at least 20 hours a week through college.

    According to the Wall Street Journal, Starbucks "is teaming up with Arizona State University to provide tuition reimbursement and financial aid to U.S. employees who enroll in the school's online bachelor's degree program. Starbucks employees can choose among 40 areas of study, ranging from retail management to electrical engineering.

    "By responding to employees' concerns about how to afford a college education, the company said, it hopes to retain talent, thereby saving on hiring and training costs."

    The story says that annual tuition for an online education can range between $3,000 and $10,000, "depending on the degree and course load." Starbucks' plan is to pick up at least half of those charges.

    There will be no requirement that employees stay with Starbucks for any period of time after they get their degrees.

    The Journal reports that "ASU President Michael Crow estimates the program will attract 15,000 to 20,000 Starbucks employees a year. The school has added 50 teachers, enrollment counselors and academic advisers to meet the demand the Starbucks deal is expected to create."
    KC's View:
    Well, that's one way to corner the market on superior and motivated employees.

    There are companies that view employees as costs, and there are companies that view employees as assets. Starbucks clearly is in the latter group. In the current environment, I think this is a highly enlightened approach, and the kind of thing that can give a business a real leg up in the long-term.

    Published on: June 16, 2014

    Slate reports that Priceline, the discount travel site, will spend $2.6 billion to acquire OpenTable, the online restaurant reservation service.

    According to the story, Priceline hopes that the move will help it "distinguish itself from other prominent travel sites like Expedia and to capitalize on the dining whims of the millions of weary and hungry travelers who already use Priceline's services."

    One interesting set of facts: "OpenTable works with more than 31,000 establishments worldwide, of which investment research firm Morningstar reports that 23,900 are in the U.S. This geographic distribution is attractive to Priceline, which has a strong international presence but has been working to grow its domestic network. According to the Wall Street Journal, 80 percent of Priceline's revenue comes from abroad and 80 percent of OpenTable's from the U.S."
    KC's View:
    Wow. I love Priceline when it comes to making hotel reservations. And I use OpenTable a lot. It will be fascinating to see if they can find synergies that will allow me to use both services in a creative and seamless way.

    Published on: June 16, 2014

    Tracy Wolpert, CEO of PCC Natural Markets cooperative since 2001, has left the company "to pursue other interests," according to a company press release.

    He will be succeeded on an interim basis by CFO and 43-year company veteran Randy Lee, which a search for a replacement is conducted.

    PCC, which has $200 million in annual revenue, opened its 10th store just recently, after the 2008 recession halted plans for expansion. PCC has another new store planned for next year.
    KC's View:

    Published on: June 16, 2014

    • The International Business Times reports that Walmart "will launch its B2B e-commerce operations in India in July."

    According to the story, Walmart plans to "focus on two Indian cities -- Lucknow, in the northern state of Uttar Pradesh and Hyderabad, a southern city Andhra Pradesh -- after opening 20 cash-and-carry stores so far, under the brand Best Price. The announcement follows the company’s statement in April, which confirmed that it will expand its operations in India. Wal-Mart is allowed to retail in the country only as cash-and-carry, not as a multibrand retailer."
    KC's View:

    Published on: June 16, 2014

    Bloomberg reports that "two workers have died at Amazon.com fulfillment centers since December, according to the Department of Labor, adding to safety questions about the warehouses where packages are shipped to customers." Those deaths are now being investigated by the Labor Department's Occupational Safety and Health Administration (OSHA).

    The story goes on to say that "the incidents show the risks of working at the facilities where everything from electronic gadgets to baby diapers are shipped to millions of customers. Amazon has faced criticism for the treatment of its workers, including from labor unions that have attempted to organize workers at the fulfillment centers."

    Amazon has not commented on the federal investigations.
    KC's View:

    Published on: June 16, 2014

    • Chuck Noll, the only National Football League coach to win four Super Bowl championships and the architect of the 1970 Pittsburgh Steelers "Steel Curtain" defense,passed away Friday night. He was 82, and had been suffering from Alzheimer’s disease as well as heart and back problems.


    • Casey Kasem, the familiar voice of "American Top 40," the syndicated radio program, as well as the voice of Shaggy on the "Scooby Doo" cartoon series, as well as doing voiceover work on numerous other programs and commercials, has passed away of Lewy body disease, a common form of progressive dementia. He was 82.
    KC's View:

    Published on: June 16, 2014

    On Friday, MNB took note of a Bloomberg report that Uber, the car-sharing service that seeks to supplant much of the traditional taxi industry in many big markets, "is fighting its biggest protest from European drivers who say the smartphone application threatens their livelihoods."

    I commented, in part:

    It's ironic. While the cab drivers were protesting by parking their cars in the middle of the street and trying to snarl traffic, it is a pretty good bet that Uber drivers were picking up fares and making some money.

    I'm sympathetic to the idea that the taxi drivers are seeing their livelihoods challenged … but that just puts them in good company, because pretty much every industry out there has either been challenged or is under threat of challenge.

    I think that traditional cab drivers perhaps would be better served if they examined their own levels of service, to see if there are ways that they could be more competitive. I get really tired of people who complain when they find that the rules of the game have changed, and that innovations threaten traditional business models.

    As Spenser says in several Robert B. Parker novels, "The ways of the Lord are often dark, but never pleasant." Adapt or die.


    MNB reader Bryan Silbermann wrote:

    Your comments today about Uber lead me to this observation:  Uber and its ilk are growing like Topsy and becoming ever more pervasive.  One of the most interesting and provocative analyses of the sharing economy was in the May 2014 edition of Wired (to which I subscribe and which I find among the most provocative thinking on how technology is changing our lives). 

    This article is a must-read for anyone dealing with consumers.  Just one part of it is “The Evolution of Trust,” a graphic that highlights the way in which social norms, structures and safeguards have changed over 50,000 years.  One quote stands out for me: “In the sharing economy, commerce feels almost secondary to the human connection that undergirds the entire experience.”   Seems to me to parallel one of your recurring themes about the need for businesses to understand that the experience they offer is just as critical as the products they offer.  These apps are redefining our social interactions and ways in which trust is created between buyers and sellers of products and services.  To me that’s an Eye-Opener.


    Agreed.

    MNB user Peter Wolf wrote:

    I have used Uber many times and think it is fantastic – the app is great and the communication between the Uber driver and the customer is outstanding.  But here is what I like the most – the driver who is coming to pick you up has been rated by the Uber riders before me.  Having been on an number of very scary taxi rides, especially in Chicago.  It is nice to know some background on the driver you are getting in the car with.  This week in Chicago I used Uber going to and from the airport and it was great!

    MNB reader Linda Wish wrote:

    I had a very similar experience last year attending the enormously popular Safeway Gala in San Francisco.

    I had checked with the valet working at the hotel to be sure there would be cabs available when I needed to depart for the event, but lo and behold when I hit the curb, I was standing there with 10 or 12 other folks, all in formal wear looking distressed.

    I pulled out my phone and ordered an SUV, and 12 minutes later made a bunch of new friends and that many new UBER fans!

    I have continued using UBER, and have never been disappointed, whereas I have had more than a few unfortunate cab rides or cabs that never showed up.


    But MNB reader Jim Nolan wrote:

    Kevin, I generally agree with the notion of adapt or die as a way to compete.  However, I have some concerns with the Uber cabs.  If traditional cabs are following the taxi commission rules and own a legal medallion they have a significant investment in the business.  It's hard for medallion cabs to compete with an operation that has a vastly different cost structure because they are operating outside the regulations.  Essentially the Uber system is akin to gypsy cabs operating on the same turf.  Cabs are regulated for safety, it sounds like Uber is not subject to the same regulations.  I like the innovation in the business model but would prefer that it be subject to the same costly regulations.  Then they would be competing on a level playing field.

    From another retailer:

    The Uber issue is less about NEW competition and more UNFAIR competition.  If cabs are required to operate with licenses that can cost as much as $270,000, why should Uber be able to provide the same service without the fee? 

    If transportation providers operate under the same rules, then Uber deserves credit for offering a service more appealing to consumers.  I’m just not sure why they get a $1/4Million advantage.


    MNB reader Don Skiver wrote:

    Kevin, you like to say, “let them disrupt!”  Hurray for the Ubers, they are giving a better service.  And granted taxi service could stand to be improved.  But I think the bigger point you are missing is that in almost EVERY city, taxis or livery service has been highly regulated to death (both out of necessity from prior predatory vendor practices and as an easy revenue generator for cities).  I worked for a long time in parking, and same thing, everyone thinks they are the greatest moneymakers and what a ripoff to pay that much to park in some cities, but when there is nowhere to park or too many cars on the road because of cheap parking everyone wants it better regulated.

    I think cab drivers want Uber to be on the same playing field as they are.  In almost every case the fee a taxi can charge is mandated and posted, they pay high license fees, have to carry special insurance, etc, but Uber is skirting under these regulations, able to charge and do what they want.

    I am sympathetic to the taxi drivers' lament. But I think that if the last couple of decades have taught us anything, it is that competition isn;t always fair - that there always will be people looking to invent a new business model that circumvents convention, that tries to find ways around the rules, that challenges the ways things always have been done.

    That's what Uber is doing. There probably are some downsides, but this is the way competition works today. I really like the way MNB reader Julie Thompson came at the issue:

    Horse-drawn carriage drivers probably hated Ford as much as taxi drivers hate Uber.

    I love so many things about Uber vs. taxis....  

    Uber feels less creepy:  The drivers are well-groomed and friendly, and the cars are clean and new-model.

    Uber is more reliable:     You know exactly (to the minute) when they will be arriving, who they are, what they are driving and what their rating it.

    Uber feels more civilized:  You don't have to exchange money at the end of the trip because your CC is on file.   You just smile, say thank you, and hop out.    You don't even TIP!

    Uber sends an email receipt immediately after each trip.  ...which leads me to my main point:

    Another advantage Uber has over its competitors is access to ALL of their customers' email addresses!

    I also love that Uber drivers rate every passenger even as the passenger is rating the driver... this two-way feedback is mandatory, not optional, after every ride.   So if you are consistently a drunk/rude ASS of a passenger, no one is going to want to pick you up.  It keeps everyone on their best behavior.   Civilized.

    Final thought - Uber is competing with taxis, yes, but they have their eyes set on a bigger competitor:  the personal vehicle.    Think about 20-somethings in a city like San Francisco where a parking spot can cost $100-200/Month.   Add in the car payment, the insurance, the hassle of street-parking (the HUNT for a spot, meters, tickets, getting towed, etc.) when you're away from home, potential for vandalism, accidents and DUI's (seriously...)    If you KNOW you can get an Uber car in 4 minutes pretty much any time of the day, owning a car may not be worth it.

    Rental car companies should be scared also.   I was in LA a few weeks ago, and called Uber the whole time (no rental car for me).    The longest wait was 4 minutes.   Two of the cars I called showed up in less than 90 seconds.


    Zowie.



    On Friday, MNB reported that the US Supreme Court ruled 8-0 that Pom Wonderful can sue Coca-Cola for what it views as misleading label claims, a ruling that is seen as having important implications for marketers, which no longer can rely on compliance with Food and Drug Administration (FDA) rules as protection against such charges.

    Pom Wonderful went to court to say that Coca-Cola misled consumers when it labeled a Minute Maid "pomegranate blueberry" product that only contained 0.3% pomegranate juice and 0.2% blueberry juice. Coke had said that it could not be sued because it met FDA regulations.

    The Supreme Court ruling does not validate the Pom claim, but rather just enables Pom to pursue its claim in the courts.

    I commented, in part:

    I'm no lawyer, so I'm probably unqualified to offer an opinion on this. But I think it is legitimate to suggest that something that is 0.3% pomegranate juice and 0.2% blueberry juice really isn't pomegranate/blueberry juice at all … or at least there is a little bit of bait and switch taking place. At the very least, this strikes me as something that ought to be litigated in the courts … and certainly in the court of public opinion. It is sort of the same thing that happens when you look at the ingredient list on some boxes of frozen blueberry pancakes and find out there really aren't any blueberries in them at all.

    MNB reader Lynn Spishak wrote:

    I also read the article from … NPR Food.  If you look at the picture of the Minute Maid, clearly stated on the front of the bottle is "100% Fruit Juice Blend"  Anyone who cares about their juice ingredients is going to see that as a red flag and flip over the bottle to read the ingredients. From that they will decide if it is up to their standards to buy or not. Anyone who doesn't see that or does not  read ingredients of the products they buy, doesn't care - making this lawsuit a waste of time.

    MNB reader Steven Ritchey wrote:

    One thing I was remembering from my days in retail and in sales, is according to the FDA, if a drink has a certain percentage of juice in it, and I’m not sure what that percentage is, it can then call itself a juice, just not 100% juice, it is then a juice drink, at another lower percentage, it is simply a flavored drink.

    I’m not saying this is right, and am not even sure if it is the case anymore, but is how it was several years ago when I had to know such things.  I  have to think this is still true, if you look at Welch’s Grape Juice, they have Welch’s 100% Grape Juice, and then they have Welch’s Grape Juice Drink.


    I'm not judging the legal dispute. I have no idea how the courts will rule, though I am enjoying the irony of Pom Wonderful suing another beverage company for false advertising.

    But I wonder if we're at consumer-centric time when language that has been accepted as being accurate enough won;t be seen that way anymore. Maybe clever marketing constructs won't be perceived as so clever anymore, because consumers are getting smarter.

    Speaking of smarter consumers….

    One of the things we noted in out story was how, in oral arguments, Justice Anthony Kennedy said that "I think it’s relevant for us to ask whether people are cheated in buying this product," which prompted Coke's lawyer, Kathleen Sullivan, to respond, “We don’t think that consumers are quite as unintelligent as Pom must think they are … They know when something is a flavored blend of five juices and the nonpredominant juices are just a flavor."

    Justice Kennedy replied: "Don’t make me feel bad, because I thought that this was pomegranate juice."

    Which prompted one MNB user to write:

    I really take offense with the Coke lawyers statement that people know that the titled juices are just flavorings. I purchased that juice over standard apple juice for my grand kids so that they would get something better than Apple Juice. I did a quick look at the label but did not dig into the details. I assumed, (we all know what that means), that if it said Pomegranate Blueberry  juice that meant that the majority of the juice would be as labeled. I am disappointed that I have just learned that I will have to read all of the details on all labels. One thing for sure, Coke has damaged their reputation with me and They will no get my business in the future. I will also share this with my friends and my Facebook page to share the attitude that they have toward transparency with consumers. I know that they aren't the only company that does this kind of thing, but they fooled me once, so shame on me. It won't happen a second time!  The label should read. "Apple juice, with pomegranate and blueberry flavoring".

    Like I was saying…
    KC's View:

    Published on: June 16, 2014

    • The San Antonio Spurs defeated the Miami Heat last night 104-87, winning the NBA finals four games to one and ending the Heat's two-year run as NBA champions.


    • The Los Angeles Kings over the weekend defeated the New York Rangers 3-2 in overtime, winning the best-of-seven series 4-1 and bring home the Stanley Cup trophy for the second time in three years.


    • Martin Kaymer of Germany won the US Open with a final round that had him winning by eight strokes.
    KC's View:

    Published on: June 16, 2014



    As shoppers look for lighter ways to enjoy their favorite baked goods, Wholesome Sweeteners is answering that call with Organic Sweet & Lite, a Sugar and Stevia Blend. With only half of the calories of sugar, Organic Sweet & Lite is a multipurpose, low calorie sweetener perfect in anything from cupcakes and cookies to teas and tartlets. It’s delicious and performs perfectly, so no one has to sacrifice taste or texture. 

    SPINS reports that Stevia-based baking blends are quickly becoming the low calorie baking choice for consumers. These blends garnered a 34 percent growth in the natural channel and a 30 percent growth in the conventional channel during 2013’s busy holiday baking season.* Consumers are quickly trading up to natural Stevia and Sugar Blends instead of artificial sweeteners.

    To add Wholesome Sweeteners Organic Sweet & Lite to your set, please contact 1 (800) 680-1896 or CS@OrganicSugars.biz .

    *SPINS, latest 52 weeks ending 12-21-13, Total U.S. Conventional Channel
    KC's View: