Category Archives: Business

PepsiCo has been trying to rebrand the Pepsi, Gatorade, Tropicana and Mountain Dew products. How's it going? Try this: "It represents perhaps the largest and most cavalier destruction of brand value we will ever see," says Grant McCracken, in his excellent analysis of what's gone wrong.

Peter Arnell, the Pepsi man assigned to the Tropicana orange juice rebrand, described his job thusly:

The objective was very, very clearly laid out.  We needed to rejuvenate, reengineer, rethink, reparticipate in popular culture. 

Here's McCracken:

But let's look at what Peter Arnell…thinks this means.  His first act of office, apparently, was to embark upon what BusinessWeek calls a "five-week world tour of trendy design houses."

This is where he went searching for culture?  In design houses?  Dude.

Classic. Spending time in design houses instead of spending time with your customers.

Tropicana rolled out a new design for its orange juice container — the old design on the left, the new design on the right. Consumers were furious and sales plunged 20%. It's since been pulled from the shelves.

McCracken goes on to playfully mock the hip design types who think reparticipating in popular culture means just being "cool" and for ignoring the emotional needs of the 99% of the population who do not wear black thick rimmed artist glassses:

If you want to "reparticipate" in popular culture, well, you have your work cut out for you.  Going to design houses, that's a good idea…. And then, well, really, why not get out of the design houses into the lives and the homes and the kitchens of the other Americans?

The problem is simple.  When Arnell thinks design, he thinks cool.  When we ask him to redesign a Tropicana package, he's going to bless it with notions of cool now circulating in his own and other design houses. 

The trouble is that culture is only marginally about cool.  Cool may be the most active, the most talked about, the most flattering part of culture, but it is also a relatively small and evanescent part of culture.  Let's call it 20%. 

When you are told to put the brand in touch with popular culture, touring design houses won't do it.  Really, what you want to do, Peter, is talk to the owner-operators of this culture, Americans…living by the millions…out there…

Peter, here's the thing.  It's not about you.  It's not what you think is hip and happening.  It's not about cool.  It's not about New York City or design houses or startling images of the future, or breathtaking mastery of the design vocabulary, or breakthroughs that reinvent the brand.

It's about Americans at their breakfast table.

Bottom Line: For entrepreneurs everywhere, it's about the customer. It's about the customer. It's about the customer. Tropicana "branding experts" were wandering the halls of hip design houses instead of sitting at the breakfast table with Americans who at the moment are hurting for cash and craving stability and familiarity.

Two years ago I wrote a post titled Are you an ambitious person who isn't big on goals? where I proposed that 80% of ambitious people are goal-oriented and 20% of ambitious people are not. See the very intelligent comments to the post.

I'm in the 20%. I have few specific long term goals. I have no idea where I'll be in 10 years.

I'm not opposed to making long term goals and occasionally I do so, but I think there's an underexplored danger to them. When you hyper-focus on a long term goal or plan you become blind to new and random opportunities which may come up as you get older and acquire new experiences and as the world changes.

In a recent article in the Boston Globe titled Why Setting Goals Can Backfire Drake Bennett discusses this downside. He also notes the psychology research around people losing intrinsic motivation or enthusiasm for tasks when the tasks are tied to goals carrying a reward. (E.g. Earn a $100 bonus if you achieve the goal of boosting sales by 5%.)

Overall I support goal setting in many situations. But the "importance of goal setting" is like "never give up – persistence is everything": a widely-accepted business maxim that is more complicated than it appears and entails risks and traps if you're not careful.

(hat tip Tyler Cowen for link)

 

In this helpful slideshow of body positions and movements, a former FBI counterintelligence agent discusses what you can learn about someone's feelings / thoughts by how observing their body language.

The most interesting nugget's at the end: the best indicator of mood is what we are doing with our feet. If we move or kick our feet upwards, we're feeling good. Same with our thumbs or other gestures which defy gravity such as pointing our thumbs up in in our hands.

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Speaking of communication, here's the one secret necessary to resolve argument and conflict: ask a single clarifying question about what another person's view is about. That's it!

21 million Americans eat at a full service restaurant every day, so I suspect some of these observations on the dining out experience will resonate:

# After I gave my order to my waiter, he said, "Good choice, you're going to love it." Ill-advised, right? Satisfaction with an experience depends significantly on our expectations going into it, and by telling me I'm going to love the food before I've tried it, I have very high expectations. However, with food I believe there's more of a self-fulfilling prophecy dynamic, and our enjoyment of food isn't even mostly dependent on the quality of the food itself. For this reason I think the waiter's statement works.

# Restaurant etiquette dictates that you are not supposed to use your hands to break off a piece of bread and put the other half back in the basket. Also, no one wants to be seen as selfish by taking the last piece of bread or the last appetizer. My advice: take the initiative. Break the bread in half (even with your hands) and offer it to the other person. Offer the last bit of appetizer to your partner, and if he declines, eat it. Many a good piece of bread and appetizer have been left in the center of the table due to excessive deference or fear of perceived selfishness. (For better or worse I'm not blessed with such selflessness — I crush bread baskets, especially if there's olive oil nearby.)

# Why do waiters ask if you want to see the desert menu? This requires two "Yes" affirmations from the patron to place an order. Just give the desert menu and make the person say "No" to desert after seeing the description of chocolate cake.

# I have laughter control issues when eating at a high end restaurant where the waiter offers a range of meaningless adjectives to describe the food. The cheese is subtly fruity. The fish is prepared with a punchy tang to give it just a bit of Alaskan kick.

# The next time you eat at a restaurant with a friend who's been there before and chose the place, ask him, "What do you recommend?" I guarantee you the response will be, "Oh, everything's good here." Really? Have you tried everything on the menu?!

# If I were a restaurant manager I would spend 30 minutes with each of my waiters explaining the research around how to maximize tips from patrons. For example, leaving a mint with the bill or drawing a smiley face on the bill have been shown to increase tip. Research also suggests that the tip amount is only marginally connected with the actual quality of wait service. Bottom line is that many waiters miss out on easy psychological hacks that would increase their tips.

# Does disclosing your newness to a job help or hurt you? "It's my first day." Is this is a smart thing to say? Declared preemptively, no. If the waiter happens to mess up the order, then it might be a good explanatory device to win sympathy. But before anything happens, it's irrelevant and might even offend (I've been assigned the new waiter — I must not look like a high roller). Elsewhere in the world of sales, regardless of whether an error is committed, be wary of disclosing your newness. I was recently helping a salesperson on his pitch and in response to a question for which he didn't know the answer he said, "Sorry, it's my first week, I'll get back to you." Again — the prospect feels like he's been assigned the junior rep.

Since we're on the topic, here are Tyler Cowen's tips for ordering in a restaurant:

• At fancy and expensive restaurants, order the item that sounds least appetizing and the dish you're least likely to want to order. An item won't be on the menu unless there is a good reason for its presence. If it sounds bad, it probably tastes especially good. Most popular-sounding items can be just slightly below the menu's average quality. Beware roast chicken. Too many people like roast chicken, so it will be on the menu, but it doesn't hit the highest peaks of taste. The flip side: when cooking at home, be wary of trying something new.
• When at a restaurant, ask a waiter, "What is best?" Don't ask, "What should I get?"
• Tips for ethnic restaurants: appetizers are often better than main courses; avoid desserts at ethnic restaurants in America.
• Eat unhealthy food outside the home. Restaurants know how to make good unhealthy food. At home, eat healthy. And don't take recipes too seriously.

Mike Masnick has a terrific, brief post up about the economics of free and the scarce and infinite components of a company's offering. It's a thought provoking framework to think about scenarios such as "All music is legally free for consumers by 2015 — how do the artists make money?" Here's how Mike thinks a recording company should think about the economics of their business:

1. Redefine the market based on the benefits you're providing rather than the specific product you're selling. If you're a musician, for example, you're not just selling a specific song — you're selling the experience of musical enjoyment.

2. Break the benefits down into scarce and infinite components. An infinite good is something that costs nothing to give away to someone else. E.g., the music itself. Scarce goods are everything else — concerts, backstage passes, people's time and attention.

3. Set the infinite components free, syndicate them, make them easy to get — all to increase the value of the scarce components. When people can easily listen to your songs, they're more likely to get interested in your concerts or merchandise.

4. Charge for the scarce components that are tied to infinite components. E.g., charge for the concerts and t-shirts, access to the band becomes more valuable.

Most record labels stumble on Step 1: redefining their offering in broader terms. Same with newspaper companies. Most have a hard time thinking about themselves as news companies instead of newspaper companies.

Speaking of which, Marc Andreessen says the "game is completely over" when it comes to newspapers and that the New York Times should turn off the printing press tomorrow. I assume he would also say record companies should stop manufacturing CDs and distribute music exclusively online.

(thanks Jon Bischke for pointing me to this article)