Category Archives: Innovation

Tips from the Top

Three CEO marketing leadership examples stood out to me recently.  Ponder the meaning and implications from 3M, Wal-Mart and United Continental for your team and company.

Photo: 3M

Singles and Doubles Win Games Too

Sometimes the desire for the new product home run obscures the ability to win by stringing together lots of hits.  From innovation superstar 3M, we’re reminded that a series of smaller, yet profitable new product introductions can also lead to company growth.  Sure, there needs to be an understanding about benchmarks and hurdles.  And, yes, the opportunity costs to execute against new product launches need to be carefully considered.  If you can get the home run, great.  If you can’t, don’t rule out the singles and doubles, though.   

“3M is everywhere. That’s the point George Buckley, the chairman and CEO of 3M, is trying to make as he talks about his favorite subject, inventing things. Last year, he says, “even in the worst economic times in memory, we released over 1,000 new products.”

But 3M has never been about inventing the Next Big Thing. It’s about inventing hundreds and hundreds of Next Small Things, year after year.”

3M’s Innovation Revival - Fortune – September 24, 2010

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OfficeMax Takes Expertise to New Channels

Pete Townshend wasn’t thinking about business strategy when he wrote the famous lyrics for “Who Are You,” the rousing track in the 1978 album of the same name from rock legends The Who.               

In a fun and ironic way, though, ”Who Are You” is one of the all-time great strategic opening lines.                                       

These three questions – What business are you in?  Who’s your competition?  What are your core competencies? - are certainly in the strategy definition workshop hall of fame.  Although there may be a tendency to sometimes pooh-pooh this type of corporate soul-searching, that doesn’t diminish the power that can be unleashed by illuminating answers and skillfully executed actions.                                                          

Consider school and office supply retailer OfficeMax.    

                                             
You may be surprised to learn how OfficeMax has creatively modified its go-to-market strategy.  Office Max unlocked growth potential because it avoided defining itself as purely an office supply store retailer (i.e., Staples and Office Depot).            

Basically, the company decided to leverage its school and office supply category expertise across retail channels, primarily in existing geographies, with a focus on being an “insightful customer advocate.”  OfficeMax describes its new channel strategy as a ”transformational platform.”  It’s an intriguing example of thinking differently to compete by leveraging core capabilities and strengths in a unique way.                    

OfficeMax Presentation - 6/29/2010

A key customer insight underpins the new approach.  According to OfficeMax, approximately 90% of office supplies sold in the U.S. are sold outside the office supply channel; and it’s convenience that drives these purchases in other retail channels per information the company provided to Store Brands Decisions.                               

The company now bundles its product development, branding and retail merchandising expertise as a proprietary package and sells turn-key solutions to retailers in other channels.  This expanded service offering includes access to OfficeMax’s stable of private brands, extensive office supply category management expertise, and full-service management of the back-to-school marketing season.         

New customers include food retailers Food Lion and Safeway; and the University of Arkansas book store.  “A partnership with a specialty retailer like OfficeMax provides a grocer with the category expertise and merchandise-promotional support necessary to make a statement,” explained William Zeuch, Office Max SVP New Business, in a Supermarket News interview.                     

OfficeMax touts that it is now able to ”distribute products and services where customers prefer to buy them.”  CEO Sam Duncan told investors that this new capability has been achieved cost effectively because OfficeMax has been able to ”open new doors and reach additional customers without investing in brick and mortar.”                    

OfficeMax also benefits from a double leveraging of its store brand innovation program in its own stores and at indirect competitive retailers.  Providing category management services to other retailers is innovative in its own right, yet Store Brands Decisions notes that ”store brand product innovation is what is catching the attention of retailers looking to build more excitement in their office and school supply departments.”  The retailer has also become the supplier.                                                  

Headline For Marketers:  Don’t dismiss your old business school case study questions about how you define your business, competitive advantages and competition.  Be willing to dig beneath the surface.  No doubt significant work and skepticism abounded in Office Max’s deliberations.  Identify what you do great and figure out how to do it profitably in as many channels as possible.  

Harvey Chimoff adds value with marketing.  He leverages a special blend of pragmatic strategy, vision, organization, and action to drive business results in B2B and B2C operations.  Contact Harvey at hchimoff@gmail.com.    

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21st Century Soda Fountain Offers Innovative Choice

What’s a soda marketer to do these days?    

Sales have been declining, sugar- and calorie-laden drinks are in the public health bullseye, and new beverage choices seem to pop-up every day.  Fountain drinks are an important component of the beverage industry as they provide brand volume and higher margins for on-premise operators.  However, the recession has curtailed out-of-home dining, putting more pressure on this selling channel.           

Soda fountain popularity has its origins in the post Civil War era, when fountains were often a gathering spot in local towns.  In an ironic twist given today’s obesity debate, “the fountains were located in drug stores because the carbonated water was created by chemists and marketed as having medicinal benefits.”          

Is technological innovation the answer to revive the fountain business?  Last year, the Coca-Cola Company began testing the Coca-Cola Freestyle, a super-tech fountain that can dispense more than 100 beverages and/or beverage combinations from a single freestanding unit.  Traditional dispensers have eight spigots for eight drink choices.        

Source: Coca-Cola Facebook

According to a company statement, “the sleek new units being tested are touch screen operated, enabling consumers to select from more than 100 calorie and no-calorie brands – including varieties of waters, juices, teas and sparkling beverages that have never been sold in the United States.”  What’s Coke’s objective?  ”It brings back the magic of the fountain of the past, re-imagines it for the future and then takes it a step farther by celebrating the idea that consumers can truly have their say at fountain — with choices tailored completely for them,” explained Chandra Stephens-Albright, Senior Director of Marketing and Business Development.  Okay, this new dispenser should appeal to the video game/touch-phone crowd, but does Coke really believe that lack of choice is sinking the soda business?                 

Nevertheless, give Coke credit for not giving up and for creating a technological marvel that has the potential to reinvigorate the on-premise soda experience.  Of course, a few more 100% juice choices wouldn’t hurt either.  A company fact sheet says that Freestyle ”creates branded beverages by blending concentrated ingredients with water and sweetener at the point where the beverage is dispensed via proprietary PurePour Technology.  It does not use syrup, but instead uses concentrated ingredients stored in cartridges in the dispenser cabinet.”  Watch a video of the Freestyle in action.  Another benefit is real-time reporting.  The Freestyle can transmit detailed consumption reports to Coke headquarters via the Internet.               

The machines are built by Plexus Corporation, who has recently been tapped to build a behind-the-counter crew-serve version of the device.  That should make order-entry and drink-filling an adventure.            

Source: Coca-Cola Facebook

Freestyle has had a slow rollout, in part due to its 30% cost upcharge.  Testing began last year in two Atlanta restaurants and in 10 Jack in the Box restaurants in the San Diego area.  According to the company’s Facebook page, testing is currently active at select restaurant locations in California (including El Pollo Loco, Jack in the Box, McDonald’s and Subway); and Georgia (including Burger King, Firehouse Subs, McDonald’s and Wendy’s).                  

In the latest test, beverage sales rose 13% at Firehouse Subs in Atlanta (three outlets), and that chain plans to put the Freestyle dispenser in another 28 restaurants (The Wall Street Journal).  The paper reports that Coke plans to expand the test rollout with another 500 dispensers in Southern California, Atlanta, Dallas and Salt Lake City.  Highlighting the upgrade challenge is that soda fountains are ubiquitous.  Coke has 525,000 in the USA.            

Headline For Marketers:  Innovation can take many forms within the go-to-market strategy, and is not restricted to just new products.  Technology can play a key role, whether for the product/service itself, or how it gets to and is used by the end-user.  Make sure your company invests in some “imagineering” resources to protect existing businesses and/or to grow new ones.        

Harvey Chimoff is a cross-functional marketing leader who leverages a special blend of pragmatic strategy, vision, organization, and action to achieve marketing and business results.  Click here for more information or contact Harvey at hchimoff@gmail.com.   

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Challenge the Status Quo

How important are differentiating go-to-market strategies and tactics in your marketing plan?

If you’re not experimenting with and testing new ways to impact and persuade your customers, get started.  Such tactics can set you apart from your competitors, especially those that don’t directly impact price.  To jumpstart your thinking, here are four examples I’ve noted in just the past two weeks, including one from outside the business world:

 1.  Ladies Professional Golf Association (LPGA) – Refresh the Customer Experience

The LPGA is in disarray.  The number of official tour events fell from from 34 to 28 in 2009 and total prize money has also declined.  In July, after a player revolt, the commissioner was forced to resign.  Times are tough for the lady golfers.  Maybe they need some new ideas? 

Golf Balls - IStock

Enter controversial LPGA rookie and model Anna Rawson, who’s employing a wide range of marketing approaches to build her career, and was recently featured in an ESPN E:60 profile.  The Australian detailed a number of new ideas on how to revitalize the tour with ESPN.com,  including this one:

“ROCK THE TEE:  Every player should tee off to her favorite song at the beginning of the tournament and have it played again when she approaches the 18th green.  Major League Baseball teams play music as batters approach the plate and it’s great.  Fans connect with players for their music and it builds anticipation. I don’t think our golfers would have a problem with this because nowadays who doesn’t practice with their iPod on?  Plus, it would help me on the tee; the forced quiet is nerve-racking, so hearing music will help break the tension.”

 

2.  Alexander’s Steakhouse - BYOB to Drive Sales

Steak consumption in restaurants is down.  In fact, some of the best cuts of beef such as USDA Prime are ending up in the club channel and supermarkets due to the decreased demand.  So, what can restaurants do during these difficult economic times to boost traffic?  How about making it easier to enjoy some wine with your meal?

Alexander’s Steakhouse in Springfield, Illinois is now advertising a “ZERO Wine Bottle Corkage Fee!” offer to induce traffic.  Many have decried the often inflated margins for on-premise wine, so providing a cost-effective solution to enjoy your favorite red with a great steak may be a winning idea.  Yes, the restaurant won’t make any money on the wine.  But if the table is empty, they won’t make any money, period!  

Alexander's Steakhouse 

  

3.  Metropolitan Police Department - Leverage Resources for Results

Crime, especially murder, is a problem in the nation’s capital, but Chief of Police Cathy Lanier has seen the recent numbers drop.  

Police Chief Cathy Lanier

Fortunately, most marketing and business challenges aren’t life and death situations.  However, figuring out how to get the most out of existing resources is a challenge we can all relate to.

Chief Lanier has taken a new approach to leverage the police resources in Washington, D.C. since assuming the top spot in January 2007.  One of her techniques to fight crime and build rapport with the local community is a periodic program called All Hands on Deck, which puts all available police on the street for a specific, short period of time.  It’s a different way to deploy resources to achieve results.  

The department posted the results of its latest effort on its Web site.  For forty-eight hours beginning at 6 am Friday July 24th, ”all available sworn MPD personnel were on patrol throughout the District emphasizing community policing, focused law enforcement and community outreach.  Officers closed one homicide, made nearly 500 arrests, seized more than $30,000 in crack, cocaine, PCP, and marijuana, and took seven guns off the streets.” 

Interesting note:  the department is even on Facebook!

 

4.  Miller Lite – Add Benefits with Packaging

Attention couch potatoes:  the bar is coming to you this football season.  MillerCoors is testing a new draft beer product that provides tap taste in the comfort of your  home.  The company is testing a home draft system that stores upright in the refrigerator and stays fresh for thirty days. 

Miller Lite

MillerCoors CMO Andy England told The Wall Street Journal that the target is beer drinkers who prefer draft to bottles or cans, which is thirty percent, with a further occasion-based targeting parameter.  He explained, “We’re really trying to meet that occasion when you just got back from work and want to reward yourself,” rather than “the party occasion.” 

It’s a cool packaging idea, especially if the concept delivers on the taste and consumers are willing to pay an up-charge.  Time will tell, especially on the ”reward” targeting.   

 

Headline For Marketers:  Unless you do it better, don’t rely on the same go-to-market strategies and tactics that everyone else is doing within your industry.  Instead, focus efforts to outthink and outsmart the competition.  Challenge your team and agency partners to devise impactful ways to achieve your marketing objectives.  How can your goods and services provide a superior customer experience?  How can you compete beyond price?  How can packaging bring new benefits to your consumers?  How can you better deploy existing resources to achieve your mission?  Shake it up with fact-based analysis, excellent ideas, the confidence to try something different, and superb execution to win in your market.

 

Blogger Harvey Chimoff, a cross-functional marketing leader, relies on a special blend of pragmatic strategy, vision, organization, and action to achieve marketing and business results.  Go to the ”About” page at the top of this blog for more information.  Contact Harvey at hchimoff@gmail.com.    

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