Tag Archives: Strategic management

October 17, 2014 · 8:37 am

Everything Is A Special

Foodie Friday Fun this week begins with a chalkboard.  I went out for dinner last night and the place I went was small.  After having been seated, one might expect the server to produce a menu.  He didn’t.  Instead he pointed to a chalkboard hanging on wall next to the open kitchen.  “Tonight’s menu is there” he said.  There were no specials – everything was a special.

The menu was small.  A few different types of crostini, two different types of pasta, a fish, a lamb dish, a beef dish, a duck dish and dessert.  Only three.  Everything was based on the ingredients available locally that day.  Having researched the place prior to going, I’d seen an assortment of previous menus.  One or two of the dishes popped up several times but the menus really varied from day-to-day.  They reflected the philosophy of the owners: fresh seasonal ingredients prepared simply.  Which of course got me thinking.

Many businesses try to be all things to all people.  They produce products in response to a competitor’s success.  Brand and line extensions are one way to leverage all of the brand equity we’ve built up.  The reality is that if the “larger menu” isn’t done as well as the array of choices that built that equity in the first place, we end up diluting what we’ve built up in the consumer’s mind.

The local ingredients had another advantage – much lower costs since they weren’t being shipped from around the world.  The prices at this place were reasonable.  They didn’t serve wine or liquor although you could bring your own (and they didn’t charge corkage!).  Again, maintaining a wine list was a distraction for them.  No inventory can go bad when you don’t have any.

I think this place’s philosophy is a good one for businesses to emulate.  Do a few things well.  Make everything special.  Make your products with the best “ingredients” you can find, where they be the people who provide your services or the materials from which your products are made.  Quality over quantity?  Maybe, although I think quantity comes from quality.  What do you think?

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October 15, 2014 · 8:27 am

Brand Actions And Words

I’ve mentioned in this space before that brands have a lot less – if any – control over how they are perceived by consumers due to the rise of connectivity among those very same consumers.  That contention is supported by some research from The Society For New Communications Research which conducted a study on the topic of Social Media and Societal Good.  Main conclusion?

The reputation of a company is no longer defined by what they “report” or what they “say” they stand for. Instead, they are increasingly defined by the shared opinions and experiences of socially-connected consumers.

You can read the study here.  It’s interesting although not particularly surprising.  While the vast majority of people still rank the quality of products and services are the most important reason behind how they form impressions about a brand, some other traditional factors are ranked way down the list in importance.  Only 43% say that a company’s ads are either mildly or very important in forming impressions while  76% cite family and friends that way.  While many brands are obsessive about their social media presence, only 28% of consumers use that to form impressions.  Interestingly, since 78% mention the customer care program as important, perhaps the social media emphasis needs to be more about caring and less about sharing.

So while word of mouth matters, so too does how a company behaves in the world as a whole.  We don’t yet seem to be at a place where consumers research a company’s social and societal impact before doing business.  However, when a company’s behavior comes to their attention – maybe through a news story, maybe through a friend – news of the negative societal impact of a company has impact and more so with women than with men:

When quality and price are largely equal in a purchase decision, nearly three in five people report a moderate to strong positive impact on likelihood to purchase when they discover information on the positive societal impact of a company. 61% report a moderate to strong negative impact on likelihood to purchase when hearing news on the negative societal impact of a company.

So let’s behave, people.  We are what we do, not what we say we are or will do.  Our customers are paying attention.  Are you?

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October 13, 2014 · 10:43 am

Shaving The Cord

You might have heard something over the weekend about a glitch in the Nielsen ratings system that affected the estimated audiences all the way back to March.  While that is kind of problematic for the TV industry, it was other Nielsen data that presents much more of a long-term problem.  As Cynopsis reported:

The top 40 cable channels have lost more than 3 percent of their distribution over the last four years, according to a Wall Street Journal analysis of Nielsen ratings data. How to account for the decline, which exceeds the loss of subscribers? Pay-TV customers are signing up for less expensive bundles with fewer channels, says the WSJ. “What we are seeing is some cord cutting and some cord shaving,” Nielsen global president Stephen Hasker told the paper. “Consumer time and attention is shifting.”

You can read the Wall Street Journal article by clicking through.  As someone who spent a long time in the TV business I understand why channels are bundled.  Way back when, the market was far less fragmented and the business model evolved where there really weren’t tiers other than the true premium channels of HBO and local sports networks.  Today, even the “major networks” of ABC, CBS, Fox, and NBC attract audience ratings in the low single digits even for top programs.  Yes, DVR viewing can boost some of their audiences as much as 80% but think about it.  What’s the difference between watching “Gotham” via Hulu (the internet) or on your DVR (the cable bundle)?  Other than being able to skip the commercials on a DVR, not much.  In fact, one could argue that advertisers would prefer that consumers watch in the non-skippable internet interface.

The real point is that how consumers come to content has changed and yet the people who are the middlemen in offering the content – the cable companies – haven’t moved off a business model that evolved in the 1980s.  As the  Journal sates:

Data points are piling up to show “cord shaving” is for real. At least two pay-TV providers say about 10% of gross TV subscriber additions are customers who are taking a slimmed-down bundle—in contrast to the bigger ones with hundreds of channels that can cost upward of $100 a month.

So the choice for the providers, as it is for all of us in our businesses,  is to change or to shrink.  They can’t just keep raising prices.  At some point that makes the problem even worse as consumers pay more for channels they don’t watch.  What’s your solution?

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