The Hub Cool News

Mira Winery

aquiaior-miraJim Dyke is marketing bottles of wine like candidates for political office, reports Jennifer Steinhauer in The New York Times (8/27/14). Clearly, we haven’t come very far from the days when it was roughly the other way around. (image). Jim is a former Republican Party spokesman who maintains a consulting practice that included a winery. This led to a connection with Gustavo Gonzalez, "then the head red-winemaker at Robert Mondavi, and the two thought about building a winery."

The challenge wasn’t so much creating "a portfolio of distinguished wines," but rather making sure people knew about it. "Just because you have a fantastic candidate doesn’t mean you can win," says Jim, using a likely metaphor. "My misunderstanding was I believed the quality of the product alone would take care of itself and that there really wasn’t much to do but have people taste it," says Jim. "The reality is that distributors are already carrying products that are already well known."

To overcome this, Jim went to his inside-the-beltway connections, placing his wine at popular eateries like the Capital Grille. But his ultimate play was a stunt based on a report that wine ages differently when stored under the waves — something about the consistent, cold temperatures and gentle rocking. Supposedly this breaks down "tannins more quickly," producing a kinder, gentler wine. Whether that’s for real is a question, but it has gotten Jim’s wine — called Mira — some name recognition, and case shipments are headed up.

Well Told

roundtable62Stories are the stuff of great brands and their ardent enthusiasts. A HUB discussion Featuring: Joey Bergstein of Seventh Generation, Simon Bradley of Virgin Atlantic, John Cunningham of Black + Decker, Bob Stohrer of Yahoo! and Stanton Kawer of Blue Chip Marketing.

What is the essence of a compelling brand story?

Joey Bergstein: A story needs a great and interesting hero, some tension, with lots of different layers and chapters. The Seventh Generation story starts with two guys — whom you would never normally put in the room together. It’s rooted in their desire to do business in a completely different way from how it had been done in the past.

The tension in their story is building products that over time worked really well, yet are better for consumers, for families, and the world around them. It’s about a small business that takes on an industry in a David-versus-Goliath way and tries to make it better. Read The Rest of The Discussion.

Zippo Marks

Zippo is doing better than ever even though the number of US smokers is half what it was in the 1950s, reports Abram Brown in Forbes (9/8/14). Last year’s sales topped $200 million, a record. Zippo’s claim to fame is, of course, its innovative and iconic cigarette lighter — developed "with a windproof chimney and a distinctive hinged lid" — in 1932. "After soldiers received the lighters in WWII, Zippo successfully marketed itself with a utilitarian, made-in-America image for the following half century."

Each lighter came with a lifetime guarantee, "meaning Zippo would continue to fix the lighter as long as its owner sent it to the factory." This apparently worked for Frank Sinatra, who "was buried with his trusty Zippo in 1998." It hasn’t worked so well for younger consumers "who were children when Sinatra died." The key to Zippo’s renewed success is largely its positioning "as a maker of talismans, lucky charms — or something akin to customized belt buckles" — and the "30,880 unique designs" it produced last year.

That’s "up from 8.900 a decade ago … partly owing to a new Zippo.com feature where you can design your own lighter from scratch." Zippo has also expanded into China, opening 14 retail stores there, "riding the idea of Zippo as an all-American lifestyle brand. The stores carry a Zippo-designed clothing line." Zippo has two stores in Las Vegas, as well, and has further line-extended into camping gear. "This is just a metal box," says George Duke, Zippo’s third-generation owner, adding: "There’s a lot you can do with a metal box."

Hi-Ho D’Addario

D’Addario succeeds "by experimenting with a commodity good and refining it through small, but significant, innovations," reports Karsten Strauss in Forbes (9/8/14). The commodity is musical instrument strings, which it turns out at a rate of "some 700,000 per day." This "netted an estimated $12 million on $169 million," including other accessories, and growth at a rate averaging "6.2% a year during the past decade." It is a long way from the company’s roots in "17th-century" Italy, and its US entry in 1905.

As recently as the 1950s, Charles D’Addario worked out of his basement in Queens, New York, "where sour-smelling animal intestines stretched on racks were twisted into strings bound for violins, cellos and harps." He’d then sell his wares "out of his car to luthiers and players from Boston to Washington DC … It was Charles’ son, John … who recognized the benefits of synthetic materials, like DuPont’s new creation, nylon, invented in 1935." After Elvis happened, John split off to manufacture steel strings, for the electric guitar.

John’s chief innovation was to make the "string’s steel cores hexagon-shaped instead of cylindrical, which gave the wires wrapped around them something to hold onto, creating a stable string that rang true." John’s son Jim, the current CEO, says automated equipment is critical: "Whenever a major innovation was developed, we would retrofit the entire fleet of machinery," he says. The inherently disposable nature of the strings is another key, because "they wear out and need to be replaced frequently."

Unilever Behavior

To get a sense of Unilever’s ethos, its CEO slept al fresco in the founder’s rooftop bed, reports The Economist (8/9/14). "William Lever, founder of what is now Unilever," slept nightly in the open, atop his mansion. Paul Polman, the company’s current CEO, only spent one night there, but the experience "helped persuade him, a year later, to launch the Sustainable Living Plan … his attempt to make Unilever the pre-eminent example of how to do capitalism responsibly, just as it had once been under Lever."

Mr. Lever "had pioneered the Victorian model of paternalistic business. At a time when disease and malnutrition were widespread in Britain, his products were marketed for their health benefits. His employees were decently housed in a purpose-built company town. Lever campaigned for state pensions for the elderly and even provided schooling, health care and good wages at palm-oil plantations in the Congo." The 21st century version of this vision is different, however, in that it focuses on changing consumer behavior.

After measuring "the carbon footprint of some 2,000 products," Unilever "found that on average 68% of greenhouse gas emissions … occurred only after they got into the hands of consumers." So, its goals include "getting 200m consumers by 2015 to take shorter showers." It is also reprising the launch of Lifebuoy soap in 19th century America with a "handwashing campaign" to reduce illnesses in modern-day India. (video) "The challenge now is to do the same with brands that do not have such obvious benefits as Lifebuoy."

Swash Machine

Procter & Gamble hopes consumers will find a place in their closets for a new kind of laundry machine, reports Elizabeth Holmes in The Wall Street Journal (8/13/14). Developed in collaboration with Whirlpool, the machine is called Swash. It stands "more than four feet tall" and "uses gel-filled pods to help neutralize odors, remove wrinkles and restore a garment’s fit." Swash is not intended "to replace laundering or dry cleaning … just delay them." It is aimed at "a new laundry consumer: the re-wearer."

"Today, it’s smart," says Mike Grieff, P&G’s research and development director for new business creation and innovation. "Why would I wash something and go through the process if it’s really, really not that dirty?" Procter & Gamble has been developing against this insight for several years now, initially creating "a line of consumable products, including odor- and wrinkle-removing sprays." These were meant for "college students who didn’t want to do laundry."

The target now is "a higher-spending group of fashion-conscious people" — both men and women. Swash does not come cheap, retailing at $499, plus another $6.99 for the gel pods, each good for one use. Basically, the user hangs a garment inside, which is then sprayed"with a gel-like solution, hydrating the fibers to remove wrinkles and restore fit. Thermal heating technology dries the garment in 10 minutes," which consumers said was about how long it takes to shower. "It’s like a microwave for your clothes," says Mike.

Apple Seeds

apple-seedsAt the core of Apple’s organization is a school that teaches a culture of simplicity, reports Brian X. Chen in The New York Times (8/11/14). Called Apple University, Steve Jobs founded it in 2009 "as a way to inculcate employees into Apple’s business culture and educate them about its history, particularly as the company grew and the tech business changed." As with so many other aspects of Apple’s world, Apple University "is highly secretive and rarely written about."

Mr. Jobs chose "Joel Podolny, then the dean of Yale School of Management," to design Apple University. Courses include "case studies about important business decisions that Apple made," as well as the best way to share "ideas with peers." As one employee described the Apple communications ideal: "You go through more iterations until you can simply deliver your message in a very concise way, and that is true to the Apple brand and everything we do."

To communicate the concept, instructor Randy Nelson uses "a series of 11 lithographs … that Picasso created over about a month in late 1945," in which the artist began with a detailed sketch of a bull, and concluded with "a curvy stick figure that is still unmistakably a bull." (link) A course called "What Makes Apple, Apple" features a slide of Google’s 78-button remote control, and then the Apple TV remote (image), with just three — "a button to play and pause a video, a button to select something to watch, and another to go to the main menu."

Patagonia Profits

patagonia-wetsuitPatagonia’s "unusual commitment to sustainability" sometimes comes "at the expense of its bottom line," reports Diane Cardwell in The New York Times (7/31/14). "Business that puts profit above people and the environment is not going to be a healthy and sustainable way for us to live and for the planet to survive," says Patagonia CEO Rose Marcario. Rose adds that company founder Yvon Chouinard has "said that every time he made a decision that was right for the environment, it made the company money, though sometimes not for a while."

One of Patagonia’s newest products, a wetsuit that "is made not from conventional petroleum-based neoprene but from a natural rubber derived from a desert shrub," is a case in point. "Instead of holding the manufacturer of the rubber, Yulex, to a yearslong exclusive contract, Patagonia is encouraging its competitors to use the product, hoping to see its use grow and drive down the price." This is in the tradition of Patagonia’s introduction of "organically grown cotton products in the 1990s," which lost both customers and money.

However, the suit, "priced at $529 – $549 … will earn the company money and bolster its green credentials, an important part of how it tried to appeal to customers." Mitch Taylor, a surfer, is sold: "I was really stoked on it," he said. Another surfer, Walter Valesky, was less enthusiastic, noting that he could get a good used surfboard for that money. Yvon’s son, Fletcher Chouinard, remains optimistic: "People are starting to put their money where their mouth is, but it’s slow," he says.

Sephora Photos

coloriqSephora is using visual data to achieve an in-store experience that couldn’t happen online, reports Issie Lapowsky in Wired (8/1/04). Sephora’s "new flagship location in New York City … is filled with digital accents designed to bring the brick-and-mortar experience closer to the world of online retail, including everything from a touchscreen quiz for finding the best perfume to a skincare product finder that culls e-commerce data and serves up online reviews."

However, Sephora is also using technology in its stores that can "unlock some interesting data that brands could never collect online. The most obvious example of that … is a program called ColorIQ, which attempts to match shoppers’ skin tone with the appropriate shade of foundation. To do that, Sephora partnered with Pantone to identify every possible skin tone in the world. They then created a piece of hardware that filters out external light to photograph a shopper’s exact skin tone and match it to makeup that’s in stock."

Using ColorIQ revealed "that some of the 121 skin tones identified were more popular than others" but Sephora didn’t have products "for several of the most popular tones." The retailer has since "worked with brands to build out a more diverse range of shades." "Brands had never been able to see that data before says Sephora marketing chief Julie Bornstein, who adds: "I feel strongly that physical retail will never go away … It’s been a pastime since the beginning of mankind.”

Under Armour Pirhouettes

misty-copeland-uaUnder Armour hopes to connect with women by featuring a non-athlete in its advertising, reports Andrew Adam Newman in The New York Times (7/31/14). Of course, describing ballerina Misty Copeland as a "non-athlete" is debatable, as Misty herself observes. "A lot of people think of dance as a really sort of frivolous thing, that you just kind of get on the stage and twirl around," she says. However, she adds, "we are just as hardworking as any athlete." The Under Armour commercial in which she’s featured supports her point.

In the commercial (link), Misty "rises to the tips of her toes, the muscles in her calves as angular as bent elbows, and her bulging quadriceps resembling a soccer player’s." Under Armour’s Leanne Fremar says Misty "brings a modern athleticism to a very traditional art form, and she pushes the boundaries on the status quo of the word ‘athlete’ … There are a lot of sports, activities, hobbies and passions that women are engaging in that are athletic and physical and should be celebrated, whether it’s dance or soccer or kickboxing or spinning."

Under Armour’s other female athlete endorsers include skier Lindsey Vonn, tennis player Sloane Stephens and soccer player Kelley O’Hara. Advertising critic Barbara Lippert says the Misty commercial, which also communicates the obstacles she faced as an African-American ballet soloist, is effective because "it doesn’t feel forced and manipulated and the same old, ‘We can do it gals,’ sort of thing," adding that the spot is "very powerful because she has a very interesting story and is an inspirational figure."

Petite Creme

petite-cremeStonyfield hopes to stem the Greek yogurt juggernaut with a French twist, reports Sarah Nassauer in The Wall Street Journal (7/16/14). The appeal is to those "who find Greek yogurt too thick or bitter," with a recipe that "uses cheese, not yogurt bacterial cultures, giving it a smooth texture and mild taste." It is "similar to French fromage blanc," and offers "plenty of protein and a creamy texture even in low-fat varieties." Called Petite Creme, it will be offered in "seven, mostly fruit flavors."

Stonyfield, which "has struggled to grab a major foothold in the Greek yogurt market," plays up the French imagery in its packaging. The color of the cup "is slightly gray to mimic a French bistro menu chalkboard." Stonyfield had "hoped to make the outside labels … matte, not shiny, so they felt like a chalkboard," but that didn’t work out — although they hope to perfect a matte finish at a later date. They also used a "font and twirling flourishes" in an Art Nouveau style "associated with European architecture and furniture."

The dark color is also meant to stand out on "yogurt shelves filled with white and blue cups" and generally "convey sophistication." The design also features "an upright spoon" on the label, "to suggest the act of eating" and highlight the product’s "creamy texture." The overall design is premised on the insight that shoppers who "are attracted to new products want to feel they are discovering something unknown … As a result, Stonyfield’s logo is tiny and written in black on white, not the typical blue." Petite Creme will retail for about $1.89 a cup.

Bet The Ranch

ranch-dressingClorox now sells more salad dressing than it does its namesake brand of bleach, reports Lindsay Gellman in The Wall Street Journal (7/18/14). Driving that growth is the "buttermilk-and-herb" dressing otherwise known as Ranch, which "has been the most popular salad dressing flavor in the US since the early 1990s, when it overtook Italian, according to NPD Group." NPD "says the average American ate salad dressing 38 times last year, choosing Ranch on 14 to 15" occasions.

The dressing packs some 140 calories into a two-tablespoon serving, but many see it as the perfect accompaniment for fresh vegetables or, yeah, salad. "I would be miserable eating a salad otherwise," says Mike De Jesus who says he "tries to maintain a healthy diet." The health-food business sees opportunity in this, with Bolthouse Farms offering a lower calorie version "made with Greek yogurt … At Whole Foods Market, the number of ranch-flavored vegan and vegetarian options has nearly doubled over the past five years."

Clorox markets its dressings under the Hidden Valley brand, named for an actual California dude ranch where it was developed "in the 1950s … As it gained popularity, the owners started shipping a dry seasoning mix to customers via a mail-order business. Clorox acquired the dressing maker in 1972 and created a shelf-stable bottled version as well as dry seasoning packets." Today it "makes 24 varieties of ranch," including a version for hamburgers and fries.

Big Blue Skies

john-kennedy-ibmIt was headline news, in 1956, when Arthur L. Samuel of IBM programmed a computer to play checkers. What made this feat so remarkable was that the computer actually learned from its experience. This was a first, and a blinding flash of the future of artificial intelligence. And, yes, this particular revolution was televised! Six years later, IBM’s computer went on to defeat checkers master Robert Nealy, sending a chill down the spine of human beings everywhere. More than a half-century later, we are still trying to come to terms with the implications of a machine’s capacity to outperform people — and IBM continues to lead the way into a world where technology and humanity not only coexist, but also prosper together. The tension created when machines begin to ‘think’ is particularly pronounced within the universe we all know and love as marketing.

The rise of big data, accelerated by the flood of information produced by social networks, sparks considerable controversy. Some embrace big data for its potential to shed new light on the relationship between brands and their customers, while others dismiss it as just another buzzword, perhaps finding solace in criticizing what they don’t yet understand. Today’s version of Arthur Samuel’s computer is IBM’s Watson, which you may remember as the machine that won a game of Jeopardy! a few years ago. More recently, Watson demonstrated the ability not only to process data within a vernacular context, but also reason to the point where it can effectively make arguments for and against any given point-of-view (see sidebar).

It’s not as alarming as it might sound, and IBM’s John Kennedy is here to comfort the uncomfortable on issues of big data, cognitive computing and artificial intelligence. For all the apparent complexity of a landscape awash in data, his message is simple: The essentials of building powerful brands remain the same. However, the future belongs to those who use available data to bring unprecedented insight and understanding into customers’ daily lives and the many ways in which they experience brands. As John expresses it: "Marketing now is not so much in service of selling — which helps the marketer — but more in service of what the customer wants to do." Anything less, and guardians of the brand experience may well find themselves losing at checkers while their competitors are winning at chess. Read The Interview with John Kennedy.

Lego Fusion

lego-fusion-smLego’s newest offering bridges “virtual and physical play spaces,” reports Wilson Rothman in The Wall Street Journal (6/21/14). Called Lego Fusion, the “idea is simple: Build something using the special platform and bricks … then launch a free app on your Android or iOS device. Take a picture of your creation, then watch as it gets sucked into one of four virtual worlds on your smartphone or tablet.” The target audience is “7- to 12-year olds (and let’s face it, their gleefully Lego-obsessed parents.)”

Among the games is Town Master, which lets users “build houses and other structures” and Battle Towers, where you repair “your damaged citadels in the real world, using Lego bricks, of course.” Then there’s Create & Race, where rather than “building a car and then taking a picture of it, you design it in the app, then get step-by-step instructions on how to construct it with bricks.” Different color bricks serve different purposes; for example, a red brick “might make your car go faster, while a blue one could give it a turbo boost.”

By logging in with a Lego ID, you can race against friends, or, in Town Master, “visit other people’s towns and share yours with others.” The limitation is that users must “build on special platform pieces (which help the app’s image recognition to work), and the app only imports what is essentially a two-dimensional facade of your structure.” However, kids “will no doubt start dreaming up castles, cars and bungalows that even the game’s developers could never have seen coming.”

DreamHouse

shrekWe’ve just begun to scratch the surface with experiences,” says DreamWorks Animation’s chief brand officer Michael Francis in a New York Times piece by Brooks Barnes (6/18/14). Experiences matter to DreamWorks because “movies by themselves are a slow to no-growth business. A lasting film enterprise, at least in today’s marketplace, must have other engines.”

For DreamWorks, this includes DreamHouse, a “2,000 square-foot ‘cottage’ with walls that are essentially video screens,” to be installed at shopping malls during the holidays. Inside, naturally, is Santa Claus, and children will be able to “go on a virtual sleigh ride with Shrek” before they meet him. “No more waiting in line; appointments will be made by app.” DreamWorks is also diversifying into television and the Internet, most notably with AwesomenessTV, “a thriving collection of YouTube channels focused on teenagers,” and DreamWorksTV, “a family-oriented YouTube channel.”

The studio is also snapping up former Disney executives, such as former Disney Stores chief Jim Fielding (a Hub Live headliner!) who is “leading a September charge into stores” with AwesomenessTV products. Michael Francis, himself a former Target Stores CMO, is also moving into “higher-end retail,” working with “fashion designer Jeremy Scott, for instance,” on a clothing line for young women, perhaps including a Shrek bra. “Everything we are doing is carefully designed to make our brand continue to ascend,” says Michael.

WeatherTech Mats

weathertech matsDavid MacNeil has made a boatload of money "wrapping $150 car floor liners in the flag," reports Dale Buss in Forbes (6/16/14). David is founder of WeatherTech, which he started with "a $50,000 second mortgage" in 1988, and is today a $400 million business. After noticing "the poor quality of car floor mats," he "began importing expensive mats from the United Kingdom" and then switched to "an American contract manufacturer." David’s next move was to measure each vehicle digitally to produce "a precision-fit liner."

He also designed his mats "to trap water, road salt, mud and sand, and edges that ride all the way up to the top of each foot well — a sine qua non for picky car owners trying to protect their investments. Its thermoplastic elastomers don’t turn brittle in midwestern subzero temperatures or break down in summer heat." His next move was to bring all manufacturing in-house, and make a virtue of ‘Made in the USA.’ He figured "there’s a competitive edge to having his factory next to his office and not a half a world away."

David’s plan, however, was not just about a ‘Made in the USA’ advertising message; keeping production at home ensured product quality and on-time delivery to his high-end customers. He pays his semi-skilled employees as much as $20 an hour (the average for comparable work is $16) and refuses local tax abatements because of "strings attached." "If I had to report to a board, there are some decisions I couldn’t justify," says David, who is now dabbling in new products, including a TSA-safe plastic belt for men.

Alliance Rubber

rubber bandBonnie Swayze keeps her ‘Made in the USA’ rubber-band company growing by finding new uses for rubber bands, reports James R. Hagerty in The Wall Street Journal (6/2/14). Alliance Rubber is a family-owned, 150-employee business, and it gets plenty of competition from manufacturers in Thailand and China. In addition, "some of the biggest traditional uses for the product — such as holding together newspapers and bundles of mail for home delivery — are withering away."

Yet Alliance Rubber enjoys sales topping "$35 million a year — higher than ever and up from $26 million a decade ago — and are growing about 5% annually." However, "the bulk of Alliance’s products are spinoffs from the original rubber-band concept, including bands used for stretching exercises, holding together bunches of produce or flowers, organizing electrical cables or strapping down bundles of almost anything. Alliance’s Slip-On Grips are designed for helping people twist off bottle caps or hold tools more firmly."

Alliance also makes wristbands "infused with fragrances that it says relieve stress," and Eraselets, which are wristbands that double as erasers. The company keeps its new product pipeline pumping by offering $1,000 to employees who come up with marketable ideas. It also supplies bands to Wonder Loom, a maker of "colorful interwoven bracelets." "We’re the Starbucks of the industry," says Bonnie. "You don’t like that color? You don’t like that size? Give us about five minutes and we’ll come up with something that suits your purpose."

Bend It Like Fender

Fender EVP Richard McDonald on the power of music to transform lives, motivate, celebrate, inspire, heal … and build brands.

eye-oh-VEEN

Jimmy Iovine says the difference between Apple and other tech companies is that other companies are "culturally inept," reports Ben Sisario in The New York Times (5/29/14). "You go into any recording studio in the world and you see candles, lights and that Apple light from a Mac," says Jimmy, who along with Beats Electronics co-founder Andre "Dr. Dre" Young, will now try to help the Apple brand "see around corners" and find its way in the music business.

Having sold Beats to Apple for $3 billion, the two men will join the company "in senior positions," reporting to Apple content chief, Eddy Cue. While there’s no truth to the rumor that the merged company will be called Beatle, Jimmy was a long-time friend of the late Mr. Jobs and once fetched tea as John Lennon’s recording-session gopher. Jimmy and Dr. Dre are expected to bring not only music-industry acumen but also a certain star power that’s been missing from Apple since Steve Jobs died.

Venture capitalist David Pakman offers a mixed prognosis for the Apple-Beats deal, however: "Jimmy has time and again proven his ability to understand the tastes of the mass market, in an extraordinary way … But he hasn’t yet proven his ability to get a digital music service off the ground," he says. Pop star Gwen Stefani refers to Jimmy’s persistent style as "Jimmy Jail" — as he repeatedly sent her back to the studio to write "that career-changing track. "The good news is, he’s Jimmy," says Gwen. "The bad news is, he’s Jimmy."

Fender Bender

fender Paul Hewson and David Evans are going to help the Fender brand find its way in the digital age, reports Michael J. de la Merced in The New York Times (5/29/14). If that doesn’t quite have the ring of Jimmy Iovine and Dr. Dre joining Apple, it’s probably because relatively few people know that Paul is U2’s Bono and David is The Edge. Both men are slated to join Fender’s board to help build the Fender brand, design new products, and tighten connections with its customers.

"I believe that guitars are here to stay and, far from digital technology being their death knell, I think it throws up some new ways to power creativity and give people greater access to the huge potential of the electric guitar," The Edge says, adding: "It was the combination of time-honored traditions of guitar production with some very fresh ideas about what the company can do going into the future that hooked me."

Speculation is that Fender could also get into "headphones and other sound systems," as well as "digital education … The company already makes a guitar that can plug into a computer; a natural next step could be online guitar education." The U2 alliance does not mean The Edge will give up his "array of Gibson and Gretsch guitars and Vox amps," however he says,"I’m excited about what new instruments and hardware I can help create with Fender."