Starbucks & Alcohol?

Starbucks and Alcohol?Well, there goes the neighborhood. No, not actually the neighborhood, but maybe the brand identity, as we know it.

The actual news about Starbucks’s intention to serve alcohol – beer, wine and hard liquor, made the media rounds just a week ago, but it was out there well before that. The rumor mill of its launch had been trickling out in tidbits, ever since the chain first served alcohol in a “soft” trial run, back in October 2010 at a single Seattle store. It has been serving wine and beer in limited Oregon and Seattle stores for the last two months.

But now there are plans afoot that the Seattle-based company will sell beer and wine in as many as 25 locations by the end of this year, to include stores in Chicago, Atlanta and Southern California, among the selected locations.  It should prove good business.
The rationale behind this move is clear: U.S. Starbucks stores get 70% of business before 2 p.m. Clearly the company wants to maximize its real estate space and labor costs, after the early crowd thins out.

Apparently Starbucks executives have struggled for the last few years, trying to decide how to expand their brand. They finally found their answer: alcohol. According to Clarice Turner, senior vice president of U.S. operations, the company isn’t considering the concept for the whole chain. We’ll see… The good news is that at the stores that serve alcohol, there will also be fruit-and- cheese plate and focaccia with olive oil. Yumm…

Look, no one can fault them for wanting to add brand extensions. With 10,700 Starbucks cafes in the U.S. and about 6,200 internationally, building organically through brand extensions, makes sense. They are following suit with such other companies as the Dunkin’ Donuts chain and McDonald’s, that have introduced non-breakfast foods to attract people during slower times.

Although coffee and Starbucks have just about become synonymous, globally, I do have to admit that the real essence of the brand remains constant – the Starbucks experience – a lifestyle. Time will tell whether the rapid spread of the new concept will obliterate the brand as we know it –or morph into a new one..

The jury is still out…

5 on Cue with Richard Block, Vice President of Marketing at Haier

Richard Block

Richard Block

Richard Block is Vice President of Marketing for Haier America. In that capacity he leads all marketing initiatives, as well as company and product promotions, through a variety of marketing platforms. He also directs the company’s relationship with the National Basketball Association, in which Haier is named the Official HDTV of the NBA. With 30 years of experience as a marketing veteran, Mr. Block joined Haier America in June of 2006.

Q: Given that Haier has so many different product categories, how does product marketing work at Haier – does the company form different silos for the marketing of each brand, with different goals, strategies and tactics or does it all fall under one company umbrella? Does each category work with its own team, whether in house or outsourced?

A: What it really comes down to is as follows: there are many different factories, all with their own teams; marketing, product merchandising and otherwise and, everyone runs their own individual company. It’s pretty much that simple… Once the product comes to market, I work with the product marketing groups that are responsible for each individual product and discuss strategy with them. Then, based on what they (in the factory) want, I execute that strategy. As such, I don’t own that strategy, they do. I do own the Haier brand, so when it comes strictly to branding, that’s something that I can execute outside of their realm.

When you look at the NBA official partnership relationship with Haier, that’s something that I execute and do for the entire Haier brand.

When I first started here five years ago, Haier had an “unaided” awareness of about 7%; it’s tripled to almost 20%; “aided” awareness is now up to almost 40%. The truth of the matter is that I believe the NBA partnership is great for the television factory. For example, I chose to use the designation of the NBA, as an official marketing partner, for nine categories because it just sounds better, works better, looks better and feels better. Most think that it’s a very strong vehicle for the TV division, but I think the whole company benefits as well.

Q: Are all your products/product categories branded under the Haier name globally or does it differ according to regions?

A: Most of what we do is branded as Haier; however, there are sub-brands. There are many companies we’ve done business with, and even here, we have sub-brands. The only part that is a bit disappointing is that because of this, we don’t have 100% of the effort going in the same direction. When you’re doing sales for a sub-brand, you cannot really market under that brand, so the investment goes to the overall pie, and gets taken down by a notch because all the monies are not going toward one goal.

Q: Haier was recently ranked by Euromonitor International, the world’s leading independent provider of business intelligence on industries, as the number one brand of major appliances in the world. What overall strategies does your company employ to retain that position, most specifically, in the US? Does social media play an important role in connecting to your customers?

A: We are very proud of that designation. Especially so, when you take into account that Haier America is a fairly young player in the United States (almost 12 years old), and that this designation is worldwide.

As to social media, the NBA partnership was key in growing our overall branding effort on that platform. We use other advertising and marketing vehicles that also impact the social media component. Just take a look at what was accomplished at the recently finished NBA All Star Weekend with our production of a 20-25 minute international infomercial; sponsorships of shooting stars for the 5th year before the 3-point and the Sprite Slam Dunk – all of which netted literally 1,000s of tweets and re-tweets! When I get a new analytics report following the All-Star Weekend and it shows that our onsite traffic for that weekend (or month) was the highest of the whole year — then you tell me how successful that is!

Certainly, our commitment within the digital/social media arena will continue to grow and we are already exploring and testing new programs.

Q: As a Chinese headquartered company, what are the cultural challenges that you encounter, if any, as to marketing operations?

A: Well, look there’s no question that there are challenges, but I don’t really think it’s because we are a Chinese company, rather because we are a foreign company, with people separated by social barriers and 12,000 miles. Often they just have different ways of looking at business aspects. In China, while they manufacture for a certain price, we actually have to buy it at a higher cost because we’re their customer and it costs a fortune when you consider freight, gasoline, time, energy/effort — whatever, to get it over here. So right away that’s a disadvantage. The other issue is in terms of distribution. China believes in a localized strategy. In China, there are hundreds of Haier kiosks and stores. As such, they have a built in customer distribution base, which is a tremendous advantage, especially when you consider that in the West we deal with the Best Buys, the Lowes, the Targets, the Wal-Mart’s or wherever in the world we sell. In the book, The Higher Way, it clearly delineates the Chinese localized strategy. This also works in our favor, since China believes that their partners here in the US, certainly know and understand the social ways of this country best, and while offering help/guidance/support, they do allow us to run the business from New York, as opposed to China.

Q: Haier’s partnerships with the NBA offer a great tie-in opportunity with a key target audience. Based on that, is Haier planning to expend its partnership program beyond sports?

A: We are always looking for new partnerships. I literally take hundreds of calls and emails about new opportunities every day. I can’t even begin to fathom how many people want to do business with us. Often I feel much like Michael Douglas’s character in Wall Street, when he said, “I look at hundreds of deals and I say yes to one of them.” We need to be very discerning. I don’t necessarily think that sports are the best value, nor the right targeted demographics across the board. For, at the end of the day, although we want to see our television and electronics businesses continue to grow, we also want to continue to do business as a leading air conditioner manufacturer in the United States and the number one compact refrigerator manufacturer in the United States. Really, we see the thrust, the focal point, of our growth, in major appliances. It’s no secret that we want to continue to grow as the number one appliance brand in the world and continue that strength here on the shores of the US.

5 On Cue With Director of Communications Jelly Belly Candy Company, Tomi Holt

Tomi Holt

Tomi Holt

Tomi Holt has been director of communications for Jelly Belly Candy Company since last year. She ran a boutique agency in the Bay Area specializing in food and health for two decades and also worked in advertising for Young & Rubicam and Glamour magazine.

Q: With a very high level of brand awareness among consumers already in place, how does Jelly Belly continue to build brand relationships with its consumers in today’s competitive candy marketplace?

A: Our position is that style and good taste are eternal. Delivering on the promise of a surprisingly authentic flavor of Jelly Belly is our primary mission. We receive thousands of suggestions for new flavors from consumers, whether through post, email and social media and we welcome them all. However it’s not only the enjoyment of the eating experience. We are in the business of putting smiles on the faces of our consumers. The memories of pleasurable times, the creativity in flavor innovation, the brilliant colors are all areas that inspire participation and celebration.

We also look for new ways for consumers to have fun with Jelly Belly beans. We offer public tours and develop new ideas to use our product. Currently the marketing department is running a cupcake decorating promotion, which we announced through the trade and blogosphere. Also, we are out in the marketplace with a mobile tour and a series of sponsorships.  While we enjoy wonderful brand awareness, we are not content leaving it at that. We are still a small company, although we enjoy a large image. That means we leave no stone unturned. We actively reach out through the media, web, events, retail promotions and social media. By keeping the strategy squarely focused on what we do best, and having responsive media relations, we generate a good deal of buzz.

Q: Much like Kleenex has become synonymous for any brand of tissue, the Jelly Belly brand name has become synonymous with “Jelly Belly Beans” candy. How has PR/Marketing strategy adjusted to keep the Jelly Belly brand name from becoming “genericized?”

A: Our trademark attorneys just got a shiver down their backs with this question. We actively protect the brand name, even to the point of notifying media outlets when they have it wrong. Beyond that, a key PR strategy is to focus on innovation in flavor development. If you’re the first or only candy maker to figure out how to make an acai berry flavor, for example, then it’s an opportunity to position the brand as innovative and trend setting. We have a steady stream of new flavors that provides fodder for publicity.

Keeping the brand name at the forefront is also organic to everything we do. We print the Jelly Belly name on every bean–that’s about 15 billion beans – so consumers are assured they have an authentic Jelly Belly bean in hand. We use every avenue at our disposal to tell the story. We have produced a trade newsletter for more than two decades to share knowledge on quality candy making, point-of-purchase tips and retailing. For consumers our public tours are important environments for key messaging. When 700,000 visitors a year leave our facilities, they know it takes 7 to 21 days to make a Jelly Belly bean, a surprising fact to many.

Q: From a PR perspective, what factors are key drivers of consumer demand for Jelly Belly candy?

A: We hope it is love at first bite. When those of us who work for the company mention Jelly Belly, a common thing happens. People will smile and tell us what their favorite flavor is, and/or which one they don’t like. Sometimes they suggest a flavor they would like us to try, or one they wish we would ditch. We are dedicated to the largest variety of flavors in the world, and each is developed to deliver a unique taste. We play on the natural curiosity about “what will they think of next.”

Jelly Belly is not your average bag of beans. It is our mission to make the highest quality confection and maintain the highest quality standards in our business practices. That translates to stellar customer service and timely response to consumers.  We believe every interaction is an opportunity to make a new fan, even if they start out being upset. We are charged with a simple philosophy: “if there’s an issue or a problem, don’t just fix the problem, but make it better than before the issue arose.”

Q: Jelly Belly has “hung its hat” on its palate pleasing variety of natural flavors.  What is Jelly Belly’s approach to building brand loyalty in instances where consumers have not, or are not immediately able to sample the product?

A: The company is committed to active media outreach, responsiveness and high value media relations. From this office, we issue news on everything new, and not only Jelly Belly beans. Recently we launched a mellocreme candy called Peas & Carrots that brought us excellent coverage. At the very least, media want to try something new, whether they report on it or not each time.

The advent of tours opened whole new vistas for travel media outlets, which are excellent environments for telling our story in a full and interesting way. I also believe in collaborating with others who have a mutual interest and can carry our message further. That may take the form of building good relations with trade associations, working with PR teams assigned to trade shows, and supporting creative retailers with their own local media efforts. I agree with President Reagan when he said, “There’s no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”

Q: How did the connection between President Reagan and Jelly Belly come about? How did Jelly Belly maximize this stellar endorsement?

A: Our company began shipping mini jelly beans to Governor Reagan, around 1967 when he was in Sacramento. We learned from a colleague in the candy business that he was trying to give up pipe smoking and was eating the Jelly Belly beans we made. The company was very small then, and never attempted to seek an “endorsement” or to advertise the connection. Insiders in Sacramento knew about the Jelly Belly beans and the Governor sent a letter of thanks to the company saying he could hardly start a meeting without passing around the Jelly Belly beans.

It wasn’t until Ronald Reagan’s second attempt at the presidential race that the media noticed he was eating our Jelly Belly beans on the campaign trail. The San Jose Mercury News broke the story that those jelly beans came from a small Bay Area manufacturer, and the next thing Herm Rowland, our owner, knew was that Ronald Reagan won the election and was headed for his first inauguration. Suddenly the media wanted to know more about our company. The story went wildfire through the media with virtually every major outlet, including international media, reporting on the president and his affinity for Jelly Belly beans. The company made exclusive White House jars for the president to give as gifts.

While Herm Rowland agreed to comment on the news stories, the company did not advertise or promote the connection with the White House. The media coverage did more for the brand than any of those efforts would have done, and President Reagan’s personal charm and diplomacy were apparently extended through his gifts of Jelly Belly beans.

When I wrote my first press release for the company about three years into the Reagan presidency, I was told you can’t mention the president or the White House.  That was an interesting challenge. The company’s primary goal was to be respectful of the Office of the President, which sounds quaint in today’s world. The secondary goal was for consumers to love Jelly Belly beans for their good taste, not because they were a novelty preferred by a famous person. Another quaint notion that has stood the test of time, is that we now make more than fifteen times the number of Jelly Belly beans that were consumed during the early years of the Reagan administration.

By the reelection campaign for his second term we commissioned a portrait of the president made from thousands of Jelly Belly beans and that portrait went on display at our tour center in California in 1989. Again we did not advertise it, but allowed word of mouth to take a natural course. Some years later we donated a similar Jelly Belly portrait to the Reagan Library where it hangs today.

When President Reagan passed away we were amazed to see average Americans spontaneously leaving bags of Jelly Belly beans at memorial sites. Several major news outlets called wanting to know how we intended to capitalize on this, and we were appalled. Very quickly we managed to get our message across that our respect for the person, his legacy, his family and his memory meant we would not be issuing a special package or promote our brand in this way. The decision not to claim an endorsement on the basis of the connection to the president allowed us to side step what could have been very negative and crass coverage in the media.

This year, some forty-five years later, we have placed the first advertisement honoring the Reagan Centennial Celebration and Reagan Foundation. The company sponsored the kick off to the Centennial year with the entry of a float in the 2011 Rose Parade, which was awarded the National Trophy by the Tournament of Roses. Throughout this Centennial year we expect to give away a half million Jelly Belly samples with information attached about the life of the president. If there’s a lesson for all of us in this, it’s that good taste and style are eternal.

The Next 25 Years (If We Do It Right, Now)

Kathy CrippsWe introduce our next guest blogger of our monthly series on the 25th of every month, in celebration of our 25th anniversary this year, Kathy Cripps, President, Council of Public Relations Firms.

Kathy Cripps is president of the Council of Public Relations Firms, the U. S. employer-based trade association. Kathy worked with multinational public relations firms and had her own firm for many years; she and the Council are strong advocates for PR firms and the value they bring to clients around the globe.

In two days (October 27) Marc Pritchard, Global Marketing & Brand Building Officer for Procter & Gamble, will speak at the Council’s Critical Issues Forum. The room will be filled with PR agency executives, their staffs and their clients from many different industries. We are thrilled Marc will address the group because when P&G speaks, people listen. Marketers and their public relations firms care what P&G has to say.

There’s a larger significance here as well. Public Relations is important to organizations like P&G.  I’m referring to the strategic relevance of our industry to organizations, whether in relation to reputation management, employee communications, crisis mitigation, marketing or public affairs. While the continued economic uncertainty has led to slower-than-hoped-for industry growth, public relations is more relevant and integrated than ever.

As the president of the Council of Public Relations Firms, the U.S. trade association for PR agencies, I have the opportunity to speak with firms around the country about what keeps them up at night, and what excites them about the future.  I know public relations is a hard business;  running a firm provides its own set of unique challenges, from servicing clients to managing and motivating talent.  It’s great to see firms like Pollack and others celebrate significant milestones.

The Council of PR Firms’ Q3 Quick Survey (of member firms) revealed some interesting statistics as firms and clients move into 2011 planning mode.  When asked what new business trends firms believe will be most important in 2011,  our members cited “more requests for digital and social media expertise” most often (80%), followed by “more competitive pitches” (57%) “a shift away from traditional media relations toward online influencers”  (56%) and “integrated campaign development “( 54%).  These responses are primarily good news as they represent not only a robust business environment but the expansive platform from which PR now operates.

Twenty five years in business, represents a time to reflect on growth, change and what’s ahead.  I don’t think I need to list the many ways the public relations business has changed since 1985. Suffice to say, staying competitive is one of the biggest challenges a PR firm faces today.

Here’s what I suggest to keep a firm healthy — and moving toward the next significant milestone:

  • Don’t give away your thinking. I know, I know, competitive pitches require that you come to the table with creative ideas. Before you get into the trap, encourage the client to select a firm, or narrow the list, using the firms’ capabilities. Clients who challenge the finalist(s) to answer 2-3 strategic questions learn enough about the firm to select a partner.
  • Don’t be afraid to ask for fair compensation. This applies not only to new business, but ongoing client work. Help your staff understand why it’s more than OK to be paid for work outside the agreed upon scope, and equally important to be paid in a timely manner (you are not a bank, right?)
  • Help your staff get excited about public relations, especially working at a firm and making it a long-term career.  There are so many opportunities with the right public relations firm. With proper training and career guidance, today’s account executives can be tomorrow’s CEOs.
  • Diversify your firm. Staff differences in experience, ethnic background, gender and skills will make your firm a richer source of ideas.
  • Really listen to clients (and their competitors). Knowing your clients’ business will help you get new assignments because you will be an invaluable resource.
  • Learn to say no. If your firm doesn’t have the required expertise, invest in it, partner with a firm that does or don’t accept the work.
  • Be ethical. Following a moral compass is good business; it’s important to your clients and your employees.

As an industry we’re poised for growth – in size and responsibility.  Let’s go for it.