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While in my home town, Detroit, for a high school reunion a couple weeks ago, I took a trip down to my undergrad alma mater, Wayne State University, to visit the new Mike Ilitch School of Business Building which was dedicated about a month ago.  I was impressed by the building and by its location which was about a mile from campus and right next to the new Little Caesar’s Arena, home of the Detroit Red Wings (which Ilitch owned) as well as the Pistons NBA team.    I was impressed by the new arena as well as nearby Comerica Park (home of the Tigers, which is also owned by the late Ilitch’s family).  My first impression was “Wow, that’s a lot of pizzas to build these mammoth, modern facilities!  Indeed, it is and it’s particularly amazing given the competitiveness of the pizza industry in the US.

1. Little Caesar’s is one of the top national chains, competing with Pizza Hut, Domino’s, Papa John’s, Jets, California Pizza Kitchen and local Detroit favorite Buddy’s for a share of the pizza market. Little Caesar’s established itself years ago by marketing the fact that not only are its pizzas really delicious but that you get two pizza pizzas every time you order one at the same prices Don’t forget the take and bake stores as well which includes Papa Murphy, Straw Hat, and the Sam’s and Costco Warehouse stores).  Of course, we all have our favorite local independent pizza places which help make up the over 62 million pizzerias who spread mozzarella and pepperoni in every corner of the US (and the world for that matter).    So, what make one pizza shop succeed in such a competitive market place? Sure, there are the multitude of coupons that flood our newspapers, mailboxes and on-line every day.  And there are the thousands of delivery cars and vans that deliver hot pies to our front doors (and don’t forget Uber and Lyft as well).  However, I believe it’s branding that continues the growth of this popular staple to our diet.
2. I recall my first pizza job when I was in grad school at Pizza Hut which was a regional player at the time.  The key to Pizza Hut’s brand was its special sauce which was confidentially delivered to each hut weekly.  We made all the rest of the pie like any other but when we added the herbs and spices to the sauce, the brand took on its uniqueness. Since then, Pizza Hut strengthened its brand with innovative offerings like personal pans, stuffed crust, pan pizzas and unique toppings and amenities.
3. Domino’s built it brand on delivery—hot and fresh—within 30 minutes- and has developed systems to insure it still gets there hot whether you order delivery or pick up at their state-of-art system stores.
4. Papa John’s went even further with its “Better ingredients, better pizza” by building on its owner as an icon (although that’s been tarnished lately).
5. California Pizza Kitchen built on the trend of gourmet and artisan pizzas in mall-based locations and full service restaurants as well as packaging their pizzas to be sold in food stores and chains nationwide

6. Jet’s built on its Detroit roots by offer a square pan with a crispy crust just like Motown Buddy’s (which was included in my reunionvisit as well).

And, I could go on about why 94% of Americans eat pizza regularly at one place or another for a total 5 Billion pies annually.  But, let’s just consider that it’s one industry that can attribute its success to BRANDING and watching all of the commercials and ads, there’s no question that marketing is as an important ingredient as the cheese, sauce, crust, and toppings.  And it just can’t be me-too messages.  Since I am paying homage to Mike Ilitch and Little Caesars, my favorite pizza commercial of all time was run in the Super Bowl (by the way the Sunday when more pizzas are consumed than any other day of the week) several years ago when the company announced its delivery system.  They didn’t just announce they too will deliver, but they made a convincing message about how well they trained their delivery person’s.

Take a look by clicking on this Super Sunday spot link:

https://youtu.be/HBdi0q6TXbw

Not only did this make the case for delivery but also helped brand the quality of the service and pizza cooks as well.  A strong message to compete with the mom and pop pizza shop around the corner.

And it takes a lot of branding in the independent pizzerias too.  Their brand is built by the family, the chef (like in the new Coke commercials about pizza), and the servers who usually have been there as long as the ovens that bake the pizza.

When I worked in the Glendale, AZ, Pizza Hut decades ago, I was worried that I would lose my love of pizza when I made and served hundreds each week.  However, when I walked in and smelled the oregano in the sauce and crusts baking, the craving was only enhanced.  I’m sure many pizza lovers who still eat in or pick up have that same sensory delight, but the it’s the branding that gets us to come in time after time for the pies we crave.

SHARE OF PIZZA CHAIN MARKETSL $25 BILLION+ ANNUALLY):

Pizza Hut        15%

Domino’s        10%

Little Caesars   8%

Papa John’s      6.5%

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CRUISING—BRANDING THE WAY WE TRAVEL!

As I stood recently and gazed at the life-sized model of Noah’s Ark in (of all places) Williamston, Kentucky recently, I was amazed at the sheer size of the boat that took all those animals two-by-two according to the Book of Genesis.  It’s the same awe that I have experienced as I gazed at cruise ships at the Port of Tampa, San Diego, Miami,  and Sitka, Alaska over the years.  I just can’t imagine how those mammoth ships with 3000-5000 passengers and crew and all that food manage to stay afloat and weather the storms of the sea day after day.  More significantly, I’m still amazed at how the cruise industry—and the brands that make up the fleets—continue to grow every year despite the intense competition from planes, trains and automobiles.

According to Cruise Market Watch, cruise ships carried over 25 million passengers worldwide in 2017 (over 14 million in the U.S. alone) and will continue to grow at a rate of almost 7% to nearly 28 Million passengers by 2020.  This year the cruise lines will add another 13 ships (all bigger and with more amenities than ever) this year.  And the potential is enormous when you consider that the total number of cruisers is still only half of the visitors to Las Vegas.

Now, I’ve never been a big fan of ocean cruisers, having only taken two in my life (although the Disney Cruise could make me change my mind).  I have taken four European river cruises in the past few years and really have enjoyed that experience immensely and expect we’ll be on a few more in the future.  I like the idea of being with only 100-125 other passengers, never being more than 100 yards from shore, having excellent dinners in a first class restaurant, and being able to go ashore to see great cities easily and comfortably.

Still, I wonder why cruising is so popular when it is so easy to fly (ok air travel isn’t what it used to be) and get to your destination quickly and efficiently.  Airports are more convenient than ever.  Airlines (like Allegiant) are giving nonstop service to many secondary markets.  Airfares still have some bargains and good reward programs.  And schedules continue to grow so you usually can go when you want to where you want all year.   I believe the growth comes from the major lines like Princess, Carnival, Norwegian, Holland America etc, appealing to more travelers branding themselves as a more relaxing, less hassle, more exciting way to travel.  Princess Cruise lines a few years ago ran an award winning commercial that hit the airline travel problems right on the head.  Take a look at it by clicking on this link:

https://youtu.be/-cjPhdZBey8?list=PLdjNdhdEOrak-EoFvJxdpzNSpTWF4hoKU&t=2

There’s no doubt that air travel has its downfalls and this spot uses hyperbole to accentuate all of them and how cruising is a relaxing alternative.  I mentioned Disney who continues to expand its destinations for its cruise ship division.  Disney has managed to take the benefits of its theme park and media brands and execute them on their ships with personal service on board as well as in setting up the trip. They consistently prove that these cruises aren’t just for kids either by providing adult areas and activities that make us grandparents happy to pay for the entire family as a great excursion for every member. Princess for years has developed loyalty by not only providing a great cruise experience but also by providing their own travel company excursions at every port to make it easy and a one-stop process.  Carnival continues to appeal to younger travelers with many kids activities on board and at the ports.  And I could go on.  Cruise ports are more travel passenger friendly as well.  They have figured out how to brand themselves and build their business with loyalty perks that bring back cruisers time and time again. (we have friends who have cruised over 20-25 times).

It’s another case of understanding your customers and competitions, then developing a brand strategy that provides value and a relationship that builds market share.  I’m not sure Noah’s brand was targeted at a better alternative to a flood or seeing animals in nature or a zoo, but provide what people need and want and then marketing creatively and consistently build a growth industry.

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BRANDING REFLECTS THE MARKET STATUS!

During my 15 years as head of marketing for Eckerd Drugs, we constantly monitored what our competition was doing to gain market share.  Not just other drug stores, but discount stores, food chains, and direct mail

sources needed to be watched to be sure we could keep our market share growing and our top-of-mind awareness at its peak.  Of course, there is always one direct competitor a store watches more closely than others and for us, it was Walgreens.  While they were in more states and markets than Eckerd, and (at that time) we had the top share in almost all markets, they were the most like us and often were right across the street vying for the same customers.

During the ‘80’s, I never was that concerned that Walgreen’s would beat us in advertising.  While they were aggressive with weekly promotions and multi-media budgets, their ads were pretty mundane and repetitive, and they never scored highly in the ad research that we conducted.  However, where they excelled was in their expenditure to develop the digital systems that would provide them with more timely sales and inventory data than we could only hope to imagine.   This insured that they would have the right items in the right stores in the right quantities.  As we learned in our own strategic research, this would be a dramatic competitive advantage as they matched Eckerd store for store and their market share reflected it was working.  As Walgreen’s grew and Eckerd dissolved, this capability also enabled them to communicate more effectively and more directly with their customers on an ongoing basis and that has paid great dividends in building loyalty and increased sales per store and per customer.

Add to this technology an aggressive growth plan with new stores and acquisitions, and it’s not surprising that Walgreen’s is a major factor in the total US economy.  So much so, that las week the company replaced General Electric as one of the benchmark Dow Jones

Industrials companies.  However, it is more than just significant revenue growth.  Walgreen’s has built its brand on an understanding of what has happened to the US economy and to the country’s consumer buying habits.We are becoming a service-oriented country and with the increased demand for health care products, it has served as a perfect storm for Walgreen’s to grow its market share despite even more competition than ever before.

General Electric is no slouch, but the company that Jack Welch built, I believe has been more focused on organizational systems and structure than it has on understanding where the customer growth is really coming from.   Yes, they are still a factor in consumer appliances and related products, but their major focus on everything from jet engines to media networks to railroad locomotives has made it less representative of what is impacting our economy and the American consumer.

It’s critical to anticipate customer trends well in advance—as Walgreen’s did in the early ‘80s by committing to technology—in order to be ready to respond not only in marketing but in having the infrastructure and logistics to be able to meet the changing needs.  Only then, can a company improve and build its relationships with its customers and remain relevant with it marketing messages and its offerings.  The successful companies today (and tomorrow) are the ones who realize that their brand is not just a marketing slogan or new name, but rather it is the relationship with a customer who sees value in doing business with them now and in the future.

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BREAKING UP A GREAT BRAND!

It was reported this week that Eddie Lampert, CEO of Sears Holdings, was pushing to have his separate company purchase the Kenmore and Sear Home Improvement brands/businesses from his troubled retail operation.  This is yet another step in the demise of what was once one of the premier brands in American business and certainly one of the legendary brands in the retail industry.  The beat continues to go on.  Sears and its other struggling retailer have been on a slippery slope ever since Lampert bought the companies several years ago.  The only news from the stores has been how many are closing in our markets on a regular basis.  It’s long been known that the only value the company has are its real estate holdings.  Customers have long forgotten them as a viable option for their shopping dollars and certainly as a place to shop (period).

What is really sad is that the company, in addition to having two of the strongest retail brands for decades and millions of loyal customers, also had some of the strongest product brands in the country.  Kenmore set the standard for home appliances and when I was at Circuit City a couple decades ago, it was the number one choice for homeowners in appliances and also at the top of mind awareness for most appliance categories.  The quality of the brand still is one of the best according to Consumer Reports (thanks to Whirlpool’s manufacturing expertise) and it has expanded distribution beyond its parent company’s stores.  However, the lack of branding has certainly taken its toll in the past few years.

Sears was once the place for the things you need for home improvement projects and for the service before and after installation.  That, too, has faded away as Home Depot and Loew’s continue to flourish and be the first choice in product and reliability.  The company has already sold of its Craftsman Tool Brand (to Stanley/Black & Decker) and it continues to have a strong brand loyalty but was so tarnished by Sears that the private label brands on the big two DIY stores (and Harbor Freight) that the demand has diminished.  DieHard batteries became the replacement of choice for auto batteries and flourished when Sears automotive service was a preferred choice.  Bad decisions and dishonest practices killed the business and hurt one of the top brands in the industry. I could go on, but suffice it to say that putting a financial person at the top of most retailers is (as the late guru Peter Glen used to say) the first step to failure, while putting a marketer at the helm can bring success.

Sam Walton’s successor, David Glass, used to say that a good retail leader must have a passion for the business and that passion is usually reflected in a strong brand strategy.  Sears (and Kmart) will soon disappear from the retail market place and it will be up to those who buy the brands that they created to disregard everything that the stores have done in the past few years to destroy them.  There is still hope if the new brands go back to the customer and build a relationship and loyalty that once existed.

TOYS R US FOUNDER CHARLES LAZARUS

Last week one of the retail hall of fame entrepreneurs passed away.  Charles Lazarus, who founded and built Toys R Us into one of the retail box store powerhouses died (maybe of heartbreak) just a day after the company announced that it was closing and liquidating all of its retail stores.  Most retail analysts attributed it to the growth of Walmart, Amazon and the warehouse stores. To be sure, this increased competition certainly played a factor in the company’s demise.

However, I believe that, like so many of the other retail disappearing acts of the past several years, it was really a case of having, updating, and maintaining an effective brand strategy that led to the lack of interest by so many customers over the past couple decades.  Most big box category-killers (like Toys, Circuit City, Office Depot etc.) opened up to the “wows” of customers who had never seen so much of one category in one place.  Unfortunately, as successful brands know, you have to consistently strive to improve and react to the customers in order to maintain their relevance.  Price alone only gets you on the playing field.  Selection improves on getting trial.  But becoming and maintaining a brand that people love, that’s what builds an enduring brand.

Toys R Us had lots of toys, for sure. But their price image never seemed to keep up with their inventories.  Nor did the customer service. Nor did the operational excellence as the stores became worn down and tired.  There are always new innovations in the toy market and yes, TRU always had the latest trends.  However, they never seemed to create an excitement that was present in the department stores during the holidays in their hay day.  The company built a destination store near Times Square in New York that rivaled the excitement of FAO Schwarz around the world, but never was able to translate that excitement in its hundreds of branches in the suburbs of American cities.  It’s marketing never went beyond it’s original “I don’t want to grow up. I want to be a ToysRUs kid” campaign.  Despite efforts to revive the theme over the years.  There was no enticement for parents and grandparents to come back and not much youthful excitement of the kids to convince them to go back as well.

GEOFFREY THE GIRAFFE THE BRAND’S SYMBOL

My long-time retail marketing peer and good friend, Ernie Speranza, former TRU CMO, agrees and he also indicated that the decision to establish Babies R Us as a separate chain was also a mistake. The opportunity to get parents coming in to Toys R Us locations when the kids were born and create a shopping habit as well as an awareness of toy trends and news was missed as Babies R Us did well but failed to translate as the kids grew up.  The company had the opportunity to be the destination for disposable diapers and the sales volume that meant. Instead Walmart , other discounters, and grocery and warehouse stores built loyalty with their inventories and prices.   Of course, there is also the expense savings that having one store doing more sales with less capital and labor that would have enabled Toys R Us to spend more on effective branding and marketing to maintain a higher market share.

So, as I visited my local Toys R Us last  week, I noticed the full parking lots and streams of customers who hadn’t been in the stores for quite a while.  They were there to take advantage of the 60% Off going out of business sale and one last visit to a retailer that failed to grow up with them.

Click on the link to view one of the classic Toys R Us commercial and sing along!

https://youtu.be/VJJ-ZLdrTwY