Like water into wine, Pabst Blue Ribbon went seriously upscale for its product launch in China, demonstrating the power of positioning. Though the dynamic of consumers’ definitions of who you are and how you relate to competitors is always a factor, opportunities arise for brands to make that definition and claim that mental space for themselves. The jury’s still out since this story’s only a couple weeks old, but I’m anxious to know how this works out for PBR.
A brief history of Pabst Blue Ribbon in America from my perspective:
born in the late 1800’s in the upper midwest
a blue collar beer for most of my lifetime
sales peak in 1977 then fall off dramatically
enjoying a resurgence among urban hipsters who can’t resist the great taste of irony
overall a decent brand for its overlord, Miller Brewing
As if from water into wine, PBR goes luxury for China launch.
A brief introduction of Pabst Blue Ribbon in China:
now called “Blue Ribbon 1844” (reference to Pabst founding date)
now a luxury brand, a “world famous spirit”
now sells for $44 per bottle (720-ml bottle, more detailed brew)
Pabst launches "Blue Ribbon 1844" in China
What a clever way to take advantage of a huge, new market – completely re-position the brand for introduction to an audience largely ignorant of PBR’s unpretentious past.
As noted above, this isn’t simply a repackaging of the same product. The March 5 edition of Modern Brewery Age describes the person and process nicely. They hired Alan Kornhauser, of Jos. Huber, Anchor Brewing, Portland Brewing, August Schell and others, to work in China six months of the year. “We just produced China’s first real specialty beer, an all-malt, reddish brown strong (15.7 plato) ale, dry hopped with Cascade (38 IBU) and aged in new uncharred American whiskey barrels,” MBA quotes him. They’re only selling Blue Ribbon 1844 in China.
So they’ve re-positioned the Pabst Blue Ribbon brand in an honest and meaningful way. That’s even better than clever.
What a great ad. What a great message. What a great brand.
I loved where Toyota was with this:
The automotive branding textbook example is “Volvo = Safety.”
A runner up: “Toyota = Reliability.”
Once the darling of the automotive world for its efficient production, fantastic sales and extreme reliability, however, Toyota‘s taken quite a hit over the past year.
Result: a hard tack away from reliability toward …
Wow! That’s a ton of “safety.” A quick count has them at seven mentions per :30 spot – nearly one time every four seconds!
On the upside: message is loud and clear, yet casual and clean. Also, safety is not wholly separate from reliability; I consider the two concepts quite compatible. It’s also timely and topical, if not a little bold given the state of all things Toyota.
On the downside: if you’re a Toyota owner (which I’ve never been), you may not buy the message – especially if the recalls have been particularly inconvenient. This “safety” onslaught (I’ve seen several full-page print ads to match these spots) is not even fresh on the heels of the safety and reliability problems – it’s amid them. I feel strongly, though, that something often enough repeated comes to be believed (for better and for worse).
I feel like this direction could really work … but they’re already giving up on it.
“They’re Already Giving Up” Exhibit A:
In short: “smart, young go-getter gets a helping hand from a good corporate citizen.” Two notes: “Erica” does say the word “reliable” and it’s the same voice as the safety campaign.
The “safety” sell, though, seems to have expired. They must have research that suggests their problems with perceived safety and reliability are over – or that those perception/imaging problems were never too deep.
If not, I’m considering Toyota lost in the wilderness.
Disclaimer: Toyota is obviously a highly sophisticated marketer. My observations are based strictly in mainstream television and magazine messages. I expect fully that they’ve got many targeted, niche campaigns striking exactly where needed that are beyond my view.
Any company can compensate its employees any way it sees fit
I don’t begrudge a person for using what’s made available to him or her
A publicly held company should be held accountable by its stockholders
I have no stake in this company
Now to the story:
Michael Jeffries, A&F chief executive since the 90’s, received a $4,000,000 payment in exchange for limiting his “personal use of the corporate jet.” He’s now limited to just $200,000 of personal use per year.
That’s limiting? OK, what did “unlimited” look like?
From 2006-2008, “he booked an average of about $850,000 a year worth of personal travel time on the corporate jet.” In 2008 alone, he racked up $1,100,000 of use.
Let’s break that down in a hypothetical scenario:
Let’s use $1,000,000 as the annual use – it’s not too far off the 3-year average, it’s under the 2008 total and it’s easily divisible.
Let’s say he uses the jet every single weekend of the year … except for six.
Let’s say over those six other weekends, he’s actually on four longer vacations.
So: 50 trips total.
That’s $20,000 per trip.
Wow.
Honestly, I’ve never shopped for personal or chartered use of a jet. I will say that $20,000 per trip seems a bit high. Also, my proposed annual schedule of every weekend, plus four longer vacations is a pretty aggressive recreational schedule for the CEO of a company with $3.5B in annual sales; it seems like Jeffries might be more busy than my hypothetical scenario suggests.
In short: he loves to fly – on what must be a luxurious corporate jet – for personal use – a lot.
A&F CEO Michael Jeffries loves to fly ... and it shows!
Brief background:
Abercrombie & Fitch has more than 350 stores, most of them in the US (3 in Canada and 1 each in London, Milan and Tokyo). You might recognize A&F as the clothing store in the mall in which the male models don’t wear any shirts, the female models are half naked and none of them are minorities. They also own the Hollister, RUEHL and Gilly Hicks brands and operate more than 1,100 total stores. They also sell direct by web. They sell apparel primarily targeted to people under 30.
The A&F brand has been alive since the 60’s and today is rooted in “East Coast traditions and Ivy League heritage” and taps into the “essence of privilege and casual luxury” (seriously, you have to read their self-description in the open of their latest annual report). It’s been owned by The Limited since 1988. Here’s a look at their 10-year stock performance:
Jeffries has presided over a very nice growth story. If you want to call $1M/yr in personal use of the corporate jet excessive, at least acknowledge that his use peaked during years in which his company was performing.
Today, however, times are tough. Here’s a brand approach to their problems from Brandchannel. Here’s an image and financial approach to the situation from MSNBC’s “The Big Money.”
Naturally, then, they’re looking to reduce costs – hence the $4M buyout of Jeffries’ unlimited personal flying privileges.
Questions:
Would a CEO who really cares about the fate of his company accept a $4,000,000 buyout in exchange for dropping his personal use of the corporate jet down to $200,ooo/year? Why would he not of his own volition simply agree to a cut back?
When you identify unlimited personal flying as a costly sinkhole for your ailing company, do you take your observation to the legal department to start structuring a deal or do you take it straight to the CEO?
Does your in-house legal team put this deal together or do you hire it out? Do A&F and Jeffries have separate representatives in the negotiation? Was it contentious (as in “No way! $3M is insufficient compensation for limiting my client’s personal use of the corporate jet. That’s less than the value of his next 3 years of personal use of the corporate jet.” | “OK, how about $4M?” | “Deal!”)? What were the total legal fees incurred?
What would you make of this whole thing as a stockholder? Would there be any way a stockholder would even know about such extensive personal use of the jet?
Bottom Line:
This isn’t some populist rant about CEO’s running out of control. As mentioned off the top, I find the whole scenario perfectly acceptable, though fascinating in its outrageousness. I also find it a little offensive from a potential shareholder’s standpoint.
A couple weeks back, one of my Facebook friends posted a story about two class-action proceedings against Yelp. Today, I saw the latest from Inc. – “Yelp’s Legal Troubles Mount” – about a third lawsuit. I was immediately moved to write this.
First: Yelp is an online customer review site. As the trademarked tagline under the logo says: “Real People. Real Reviews.” Dry cleaners. Restaurants. Schools. Whatever. Yelp offers real insights about all kinds of operations in all kinds of towns all across the country (their site says they’re in the UK now, too).
The basic allegations are of extortion and fraud. The charge: Yelp reps threaten to highlight negative reviews, bury positive reviews, manipulate awards, etc. if you refuse their offers of a couple/few hundred dollars a month of advertising services. Yelp threatens to make your business look bad, presumably still in customers’ own words. Allegedly.
These allegations are coming from a couple dozen businesses of different kinds in different cities.
What matters: trust. There’s nothing more important than trust, especially if you’re Yelp.
A quick review and analysis of Yelp’s tagline:
They trademarked it, so they must care about it
The word “Real” constitutes 50% of it
The opposite of “Real” is “Fake”
They obviously want to distinguish their reviews as credible
Credibility in online reviews is often in question
Why would a company that depends on credibility, authenticity and “real” allow business practices to be sufficiently institutionalized in their culture to find themselves in this position? If customers have any sense at all that the reviews are dishonest in any way, their entire purpose for using the service evaporates.
And for what? A little short-term cash? I know times are tough, but why go to heavy-handed sales tactics that are bound to bite back in the end? Whatever they gained through these tactics will likely be devoured five or ten fold by newly incurred legal fees.
Even if Yelp successfully defends against the three class-action lawsuits (and no more pop up), theappearance of impropriety threatens fundamentally everything upon which the brand is built. This is a potentially mortal insult added to the injury of the time and money tied up in legal proceedings. And they brought it upon themselves.
Legal, operational, image and otherwise … Yelp needs help!
This 4-year-old’s name is Ethan Beute. He lives in Grand Rapids, Michigan. This photo of him was published to the Grand Rapids Press website earlier this year.
Coincidentally, my name is Ethan Beute and I lived in Grand Rapids, Michigan for at least 20 years of my life. I would add that he looks a little bit like I did as a child.
The day a friend of mine posted this as a link on my Facebook page, I knew I had to buy ethanbeute.com. What parent of an Ethan Beute wouldn’t want to give his or her child ownership rights to “ethanbeute.com” as a fifth birthday gift!? A stretch, I know, but I didn’t want to risk it.
With regard to my surname, my wife and I were the only “Beute” in the Chicago phone book for the 4 years we lived there. When I witnessed a child with my name living in my hometown, however, I knew that I had to claim my online real estate immediately.
I’m Ethan Beute on Facebook and LinkedIn. I’m ethanbeute on Twitter and Flickr. As a natural extension of my personal brand, ethanbeute.com is the only way to go.
Claiming a url is a simple process; my technical knowledge and skills are limited, yet I had no problem doing it. I used GoDaddy.com and paid $10/year for the rights. I set it up to redirect to this blog site.
I have no idea where all this is going – and by “all this” I mean life online in a very general sense. I do know that I need to be easily found online. This online presence is necessary if I’m to have any future in promotion, marketing, and branding.
Recommendation: consider your personal brand. As a primer, here’s a years-old article from Fast Company (1997!) from the exceptional business mind of Tom Peters (yes, that’s a link to tompeters.com).
Scene: dinner hour, family in kitchen, nice evening, front door open.
The doorbell rings and I feel obligated to answer, since the open door makes clear we’re home. Two young men – poorly-dressed, tired-looking, apprehension-inspiring – greet me.
“Hi, we’re from ADT. Do you want to keep your family safe?” It’s a good angle, but a tactless approach and sketchy presentation. They proceed to offer a free security system install with a $15/month monitoring subscription. Despite hearing the strongest brand name in home security and despite being a former ADT customer, I politely refuse the offer and send them off.
Rightfully curious about the odd encounter, my wife implores me to get a better understanding of the situation.
After they leave my neighbor’s porch following another unsuccessful pitch, I get their attention and we chat in the street.
I ask: “Let’s say I change my mind in a couple weeks and want to have that in-home consultation you described – how might I reach you?” The main guy offers to set that consultation up right now. I counter: “No, I’d prefer to have a business card or similar so I can contact you at my convenience.”
Important points: there are no ADT ballcaps, no ADT knit shirts, no ADT paperwork, no business cards of any kind! Just two guys, far from “clean cut,” with a stack of Google maps on which they circle and cross out homes as they visit clipped to a neon green clipboard that opens up and holds a couple dozen pieces of paper.
I get “Derek with ADT” and a phone number scratched out onto a torn-off piece of a Google map print out and return to my home.
Inside, I find the phone number for the local ADT business office to ask whether there’s any scheduled door-to-door sales activity in my area.
The woman who received my call confidently asserts that they “never sell door-to-door.” I alert her to the fact that they said “ADT” about a dozen times and wrote “Derek from ADT” on the torn-off piece of paper.
“Ooooh, I know,” she says, as a familiar situation becomes more clear to her. “They’re probably from one of our authorized dealers. We get complaints about them ALL the time.” She proceeds to tell me about fly-by-night scenarios in which a dealer installs a faulty system, disappears, and leaves ADT with rightfully angry customers. “Really frustrating,” she says. I could not believe what I was hearing.
The point: if you’re maintaining a network of authorized dealers, go ahead and authorize them!
Provide them with logo’d gear, because they’re using your name – and your name only – with your full permission and authorization! Provide a little training and some basic guidelines. Your company has plenty to lose by actively permitting nomadic tribes of sketchy sales people to represent you.
