MarketTrip - VitaminWater Creates Loyalty, Community...and Now Suspicion

There's something fishy going on at Glaceau...at least as far as its VitaminWater product lineup goes. Consumers are starting to talk about it and some folks are getting pretty upset.

It seems, at least people are speculating, that Glaceau has been messing around with the formula for "Revive" - its popular Fruit Punch flavor. It looks a little funny (less deep red/purple) and it tastes a little different too...

It's just a hunch...based on people's observations and recollections of taste but VitaminWater devotees tend to know their water well so they're probably on to something. So what's the deal if it's true?

We can only speculate (the company hasn't made any announcements) but speculate we shall...

In the past 12 months, the VitaminWater offering has grown from 6 or so flavors to a veritable rainbow spectrum of 16 flavors/colors. New flavors/colors include "Defense" (Cran-Apple) in burgundy, "Endurance" (Peach-Mango) in...well, peach and "Charge" (Lemon-Lime) in a greenish-yellow hue. This brand expansion has highlighted, from a marketing perspective, just how tied to color the VitaminWater flavors are. Flavor colors key to label colors...yellow to yellow, pink to pink, etc...(except for Lemonade which has a blue label).

But it's in the purple shades that the lineup has grown most conspicuously...there are now three purple flavors (the original "Revive," "Formula 50"- grape, and "XXX" - Acai-blueberry-pomegranate).

I'm speculating that it got to be a bit too crowded in the purples for the marketing folks when they realized that really all that differentiated "Revive" and "XXX" visually was the label on the bottle (XXX got a black label). Their solution (perhaps) was to lighten "Revive" so that it more neatly fills the middle ground between "Formula 50" (pale purple) and "XXX"... Perhaps this change in hue had a subtle effect on taste.

Ok. So it was a marketing decision...only problem is that people noticed and most questioned in my totally unscientific poll don't really like the result. They used words like "betrayed" and "wronged" to describe their feelings... Now, this isn't on the same level as Coca-Cola's New Coke fiasco*...more like the Old Becky/New Becky switcheroo on Rosanne or Dick York in place of Dick Sargent on Bewitched. It's unsettling and largely inexplicable but something people know they'll get used to and then not think much about moving forward.

People will get over it and VitaminWater likely won't really lose any drinkers...but since it involves something as choice-critical as flavor which in the beverage biz is the very heart of consumer loyalty (much more so than giveaways or points programs), if true, it seems like a really risky move on Glaceaus' part.

*or brilliant move. Some view Coke's switch as a well conceived marketing ploy. I don't buy it...

MarketTrip: Perpetual Product Optimism

I have a 2 year old iPod. I have a 6 month old Motorola Razr. I have a 27 inch flat screen CRTV. All work flawlessly, look good, totally fit my lifestyle and are paid for. And yet I want to replace all three.

As such, I habitually read the Sunday circulars from Best Buy, Circuit City, CompUSA...grabbing them first as I sip my coffee. As a new dad with precious little "me time," I know that this is unwise. I should spend my quiet time with World News, Living/Arts, Ideas or even the Magazine...but I don't, I can't.

Frustrated, a bit ashamed and eager for an answer that indemnified me of my own behavior, I came up with the following:

Humans are, I believe, more optimistic than pessimistic, which makes us really truly want to believe that this product is exponentially better than that product. Combine that mindset with mankind's innate belief in compounding betterment and you've got what I call "perpetual product optimism" (d. unending assumption that newer gadget = better gadget). It's "assumed obsolescence" and it's the yang to the yin of "planned obsolescence"...the human nature flip side to corporate retail strategy (and it's the 93 octane that fuels our economy).

It's what causes me (and my brethren*) to incessantly read the Sunday circulars, wander around Best Buy for hours and plot our next technology purchase over the course of many, many months.

So, using the classic "it's human nature" argument, mission accomplished. I'd successfully applied this new consumer psychological concept - perpetual product optimism - to my life and simultaneously a) eradicated my feelings of guilt associated with coveting gadgets I know I don't need and b) excused my newspaper reading habits.

And in doing so, I've aptly demonstrated another impressive aspect of human nature - the power of rationalization!

* men aren't alone, women demonstrate similar behavior with handbags and shoes.

POSTSCRIPT:

Thinking about this a bit more...

From a marketing perspective, that this mindset exists in the modern marketplace should come as no surprise. And yet desire based on PPO is something that any marketer would be hard-pressed to manufacture for a given product. Consumer desire is elusive…and you can’t force people to want something.

In fact, there’s ample (although not conclusive) evidence of an inverse relationship between corporate hype and consumer interest. Palm’s Folio is one of the most recent examples. Classically hyped technology offerings that failed to captivate consumers include WebTV, the DiVX movie rental service, Apple’s Newton, email appliances, Iridium…etc.

So what then? How can marketers leverage PPO? How can they position their product as the antidote to consumers “assumed obsolescence?” Most likely they can’t. “This is better than that” arguments don’t really gain much traction in the marketplace these days…consumers have learned to mistrust corporate lines when it comes to technology.

Really, the best approach seems to be to ignore (or avoid addressing directly) the competition or even your prior products and to make your play either on an emotional level (like Apple with iPod) or on straight features/benefits (like Blackberry). With fickle, web-savvy consumers, you really have to hope your product development team got it right and hope that consumers assign the kind of value to what you’re selling that will make your launch a success!

Connected to the Sound - Indy "Finds"

The sound is an ode to the influences of Ledbelly, Robert Johnson and Howlin' Wolf. The visual is that of 20-something Redbull guzzling skaters. The sound and the visual don't equate (which makes them all the cooler) but the music is transcendent and they just plain ROCK. The Black Keys are my signature indy "find." I stumbled across them several years ago I can't remember how...and they're my "dude, have you ever heard The Black Keys? No - you've got to listen." If you haven't heard of them, you can take a listen on their site at http://theblackkeys.com/. And if you ever get the opportunity to see them live, just go.

This blog gives me another outlet from which to spread the good word about these guys. Every guy needs a "find" that he can proselytize. Why? Ok - on the surface, it's a bit of a 'merit badge' - it helps you feel like you're a participant, not just a listener, it gives you cred...and it makes for good conversation over beers. But more so, having an indy find and sharing it, in a way I think, connects you to REAL music...the kind that isn't manufactured to appeal to the bell in the bell curve, sanitized for radio, or optimized for the audiophile - you're a proponent of the little act with the BIG sound. And that's something entirely different from the BIG act with the little sound.

In this era of consumer research, mega-producers and world-wide electronic distribution, it's easy to forget that music is a base form of human experession and is intended to elicit strong emotions and connect people. Listeners don't equate fans...and indy bands (and music as a whole) need participants like us!

MarketTrip - Coffee Wars: Caffeine Clash or Java Joke?

Is this for real or is the notion of a brewing premium coffee brouhaha brought on by the Golden Arches about as credible as Iraq's WMD?

Disclaimer: I'm not a coffee snob. For me, it's not who's logo is on the cup but rather who can be counted on to deliver a credible cup of regular joe day in day out. And I'm willing to pay a premium if need be because a lousy cup of coffee is no cup of coffee at all!

McDonald's is now featuring a "premium roast coffee" which McD's executives assert will help the fast food chain recapture coffee drinkers "lost" to coffee-focused competitors like Starbucks and Dunkin' Donuts and other smaller regional players. The assertion goes that customers, having the option of getting a quality cupa joe at one of the chain's thousands of conveniently located domestic outlets and at a lower price than their current cup, will come in (or "back" by McD's rationale) by the sack full. But is this a credible claim and does D&D and Starbucks have anything to fear for real?

To answer this, we must consider not the coffee provider's strategy NOR the quality (e.g., taste) but how the need a coffee fulfills and the value the drinker associates with the fulfillment of that need influences where they choose to buy their coffee. Need and value are arguably the two most influential motivations for any purchase decision for reasons that should be obvious so I won't elaborate here.

Without over thinking this (as is the tendency for marketers and analysts alike), we need to climb into people's caffeinated heads!

What's at issue here is simply the question of the significance of cost and convenience factors as they apply to and influence people's coffee purchase behavior.

In essence, we are vetting the notion that a cup of coffee (suspending disbelief for few minutes about differences in taste) is a commodity like...say gasoline...something that's pretty much the same everywhere you can get it. And in doing so, we're trying to answer for whether money and time are factors significant enough (or factors at all) that would cause people to ditch their current coffee buying habits.

SO we're considering "need" and "value" here... Let's look at need first. Is coffee buying (and above that, coffee drinking) reflective of more than the fulfillment of a basic need? For the kind of customers who can be counted on to visit regularly and spend freely...the ones who can make the profit needle move and the ones McDonald's is chasing, I'd postulate that it is ...that coffee isn't a hot beverage but a part of their day with powerful ritualistic associations. Their coffee is "their coffee" consciously and they're not easily swayed or that thoroughly motivated by convenience and a few more dimes in their pocket. Though we say we "need" coffee, it's still ancillary and therefore a "reward" and we choose to reward ourselves in different ways (I reward myself just for getting out of bed!). We have choices...and if we bought coffee only to satisfy a need, then yes, any brand would do and we'd buy coffee the way we buy gas.

That brings us to value (that's "value" with a lower-case "v"). Questions of value invariably relate back to money but it's much more that just dollars and cents...value determinations involve a weighing of factors most of which are not monetary in nature.

What's misguided in McDonald's strategy and the media is neglecting in it's coverage is that for consumers, McD's, D&D and Starbucks represent three very different value propositions. For that reason, coffee drinkers self-identify primarily with one chain or another because they've determined that one versus the others is best suited to fulfill their need as they perceive it.

McD's is about cheap, fast (and there's nothing wrong with that nor is it incompatible with being able to get/provide a decent cup of coffee). With the limited focus coffee-based beverages, donuts and breakfast sandwiches, D&D is really about a comfortable ritual. And Starbucks is about choice - that your coffee should be yours in every way - you should be able to have it any temperature, strength and with any adornment you'd like. Each company's value proposition is distinct enough that for their customers, they're there for what the company's joe means to them and they're not likely to be influenced by what are really nominal differences in convenience and cost.

D&D is already convenience + cost competitive and Starbucks is neither about convenience (in terms of order fulfillment) or price. In fact, it's the complete antithesis.

So are there really battle lines in the sand? Outside the bubble of a corporate headquarters or business newsroom, the answer is emphatically NO. Wars are for possession of something. The media assumes that this "battle" is for the coffee drinking consumer. It's not. There are very few coffee drinkers up for grabs. People have already chosen sides.

McDonald's believes it can change customer's minds and win them over. It can't...at least not in the significant way it's seeking to. It's raising it's bar. Not the bar.

The most likely outcome of McD's upmarket coffee move is that McDonald's customers (and employees on break!) will get the better cup of joe that everyone deserves. And that's about it. Starbucks people will continue to sip soy mocha half-cafe lattes while they surf the internet and nosh on scones. D&D folks will happily head to work with large hazelnuts and bagel sandwiches in hand. And we'll all go on our merry caffeinated way.

MarketTrip: A New Era Blows In...

"Dries hands in 10-12 seconds." The gadget I'm currently enthralled with is something that we can definitely file under "Why the heck didn't someone think of this sooner?!" The XLERATOR commercial hand drier - hands dried by the designated device hanging on the wall rather than on your jeans? BRILLIANT! I first encountered this wonder-device at my local Target store. And instantly thought to myself "I need this for my house."

The basic premise is this - lots of hot air blown with actual force onto your wet hands will dry them! Revolutionary, I realize! Apparently, manufacturers of previous devices were either a) challenged by the technological hurdles required to achieve actual drying with air OR b) they were convinced that they were protecting the public by limiting the velocity with which air was used in the act of drying! Regardless of why it took so long for someone to bring some conviction to public bathroom hand sanitation, once you've used it, you'll appreciate that a new era has arrived. Is my enthusiasm disproportionate to the achievement here? Well, how many times have you given up half way through hand drying and left the restroom with wet hands muttering under your breath?!

With this on my wall, how easy to be green...especially since the manufacture claims it uses 80% less energy than a standard (I'd say "substandard") commercial hand drier. But my hopes of bringing the revolution home were dashed by the price tag ($450 for the sleek chrome model), the rewiring required to place this in the proper location and the better judgment of knowing that this was one "toy" my wife would never understand my fascination with. So for now, it's still towels at home (unless I happen to be wearing jeans!).