Sears Holdings Reports $56 Million Loss

The parent company of Sears, Roebuck & Co. and Kmart reported a $56 million loss for the quarter ended May 3 on Thursday May 29, 2008. Natalie Zmuda at Ad Age says,

"During the quarter, sales at Sears' domestic stores open at least a year slumped 9.8%, while same-store sales dropped 7.1% at Kmart. Same-store sales declined across most of its major categories domestically, including the apparel, home appliance and lawn and garden segments. The company said weakness at its stores reflects the impact of rising gas and food prices on its consumers, as well as the weak housing market."

Overall, I agree with Zmuda's assessment. However, there are a few things that Sears can do to improve its sales during a slow economy. For starters, it needs to focus on improving employee moral and the customer experience at some locations.

I took a part-time job at a local Sears automotive center last summer but found employee moral to be rather low. Employee moral was lower than I expected, especially compared to other retailers that I've worked for.

Sears needs to focus on improving the customer experience. Very rarely due I encounter a Sears employee full of knowledge and helpfulness. Again, I think focusing on employee moral may help improve the customer experience.

These are just a few of my opinions. Obviously, my expereiences with Sears pertain largely to locations in Southwest Ohio. Nonetheless, a $56 million loss indicates that my experiences may have contributed to Sears' poor quarterly results. Hopefully Sears will get things turned around.

A key problem for Sears is that it doesn't position itself from competition. Is it a low-cost leader? No, that would go to Wal-Mart. Does Sears offer the highest quality products? Sears may offer the highest quality products, but it doesn't relay that via its marketing campaigns. I think of JC Penney's, Macy*s and Nordstrom when it comes to offering quality products. Does Sears offer the best service? Again, it may offer great service, but Saks Fifth Avenue and Nordstrom are more known for their outstanding service.

Sears offers great products (e.g. Craftsman tools and Diehard batteries) but needs to find its market niche and exploit it. Hopefully it will.

Coors Speeding Competitors

Advertising Age reports that Coors' four largest brands are all growing quicker than competitors. However, Budweiser is receiving the most online buzz within the blogosphere as a result of its Super Bowl advertising.



I'm not sure if Coors partakes in any social media activities, however, it may want to rethink its strategy. Improving its presence will only help strengthen its position. Additionally, it can use CGM (Consumer Generated Media) to help bolster its partnership with the NFL as Coors is the official sponsor. Unfortunately, many consumers may not be aware especially with Budweiser garnering so much buzz around the Super Bowl.

Coke Looks to Bring Home the Gold Medal

Coke is set to launch an Olympic blitz campaign according to Ad Age. The campaign includes Multilingual Containers, Athlete Vignettes, Online Contests, Music Project.

Have Your Realized Twitter's Potential?

Here are a "free" few tools I've come across to help find what you're looking for on Twitter.

http://www.tweetscan.com/ - Tweetscan allows users to search for Twitter results via queries. This is a great way to follow topics of interest.

http://www.twist.flaptor.com/ - Twist.flaptor.com allows users to see Trends in Twitter.

http://www.xefer.com/twitter - Allows users to follow follow tweets (people using Twitter).

Feel free to ping me if you have any questions regarding these tools.

Marketing During a Recession

Advertising Age posted an article regarding consumers' spending habits during a down economy. The author, Eric Spahr, encourages brands to continue to do several things, as the economy heads into a recession. Those things include the following:

1. Observe consumers' behavior
2. Understand the new competitive set
3. Find out emotions behind consumers' behaviors
4. Continue to build brand equity

Consumers will make decisions about which brands they will remain loyal to. Some consumers may give up their Starbucks coffee every morning while others may forgo using their summer vacations. Given this, the current state of the economy will mean that marketers will have to do a better job rewarding loyal consumers.

A recession should not be viewed as a inconvenience or a roadblock in a marketers way. Good marketers will seize the opportunity to be creative and find new ways to reach out to consumers. Now is the time for marketers to find creative ways to reach out to consumers (e.g. social media) and build consumer loyalty.

Online Consumers Speak Negatively about the Economy

I've been monitoring online buzz about the economy over the past few months and I've found some interesting results. I will start of by showing a trend of economy discussion online from October 1, 2007 through March 31, 2008.

Economy Discussion Trend














Discussion about the economy is trending upwards. Recent spikes in buzz are largely caused by consumers discussing bank mergers and their opinions of the economy. Below is a key highlighting several call-outs on the trend line.

Key Events Creating Buzz:
A. 10/29/07 - Merrill Lynch reports $7.9 billion write-down.
Merrill Lynch’s CEO, Stan O’Neal and Citi’s CEO, Charles Prince resign.
B. 12/6/07 – Consumers discuss President Bush’s mortgage plan.
C. 1/7/08: Bears Stearns’ CEO James Cayne resigns
D. 1/13/2008 – Consumers discuss the BoA Countrywide merger.
E. 1/21/2008 - 1/22/08: U.S. Federal Reserve announces surprise 0.75% rate cut; DJIA loses 400 points as global markets name the day, “Black Monday.”
F. JP Morgan buys Bear Stearns for $2 a share

Additionally, I have been tracking sentiment among consumers talking about the economy online in two month intervals since October 2007. More consumers have a mixed / negative outlook on the economy from December 1 – March 31, 2008 compared to the October 1 – November 30, 2007. An increase in negative buzz results from consumers expressing their concerns about the U.S. economy potentially going into a recession from December 1 through January 31, 2008. However, negative buzz February 1 through March 31, 2008 emanates from consumers discussing potential fraud and ethics violations associated with the subprime debacle.














Listed below are a few sample verbatim to support my most recent findings. Consumers speculating about whether fraud played a role in the subprime meltdown express their discontent online.

“[Big News: Subprime Lenders Get Big Accounting Break At Sec]… I thinks that's important news, or exists there another thread on it. FFS, they will just be allowed to hide it all. “
Housepricecrash.co.uk, 2008-02-01


“Blaming all this on the gov is a good start, Grizz. But it seems all the congress wants to do his slap down the lenders, even though they were the ones who encouraged this practice. The left wanted low income folks; ie people who can't afford a house to have a really really big one. They caused the problem, now all they want to to is fleece the mortgage companies and responsible borrowers for doing want was expected from them. Blaming all this on Bush is inaccurate, but typical. I do not blame it ALL on the government, because crooks and con men will always find a way. Your weak attempt to whitewash this administration in particular and the general anti-regulation enforcement tilt of Republicans in general just doesn't wash. Government regulations exist because of those who would take advantage of people in just about any situation, whether it be the food on your table, drugs in your medicine cabinet, or a virtually incomprehensive mortgage instrument. Point of fact, the regulators, if they existed at all, were asleep at the switch on the sub-prime mess and the bankers were no less culpable with their bottomless greed”
Democracyforums.com, 2008-02-27


“I'm would never vote for McCain, I would rather write-in a vote for Minny Mouse (which is what I am leaning towards at this point). But I still have a hard time accepting that me, the tax payer, has to be part of the solution that was the sub-prime mortgage scandal. The companies that profited off of these actions should be the ones to bail the people out. Why do I have to be the one to fix others financial mistakes ? Next thing you know we will have to bail out folks who take super high interest credit cards because they did not read the small print. People should have some sort of responsibility for their actions and should not be bailed out by the rest of us who are able to make smarter decisions when it comes to our finances.”
Forums.nasioc.com, 2008-03-10


-------------------------------------------------------------------------------------
Notes:
1. Buzz volume is depicted as a percentage of 433,173,653 total messages by day occurring between October 1, 2007 and March 31, 2008
2. Information about “Black Monday” 2008 can be found at http://en.wikipedia.org/wiki/Black_Monday_(January_2008)
3. Given time constraints (e.g. work, life in general), I was only able to sample a 100 random messages about the economy per time frame. Therefore, I would not consider these findings to be statistically significant, but more directional.

Marketers Buying Ads for Packaged Goods

Advertising Age reports package-goods marketers still spending big on media. At least some things never change!

I'm LinkedIn, Are you?

I recently joined LinkedIn. You can see my profile at http://www.linkedin.com/pub/7/bb1/752. Also, please let me know if you are a member of LinkedIn. I am interested in learning about other peoples' experiences using LinkedIn.

Remembering Pepsi

Advertising Age reports on Pepsi's new marketing campaign to promote recycling. It is called, "Have we met before."

"Our goal is to reenergize consumers about recycling," said Nicole Bradley, a Pepsi spokeswoman. "We've learned that most people will recycle when they remember, so we thought the 'Have we met before?' program [would be] a great way to remind people about the positive impact of recycling."

Overall, I think this campaign is a great idea. However, I'm skeptical whether consumers will notice initially. The print looks rather small on the side of the can. Additionally, any call outs below a Pepsi-related product (e.g. Pepsi can) in a traditional advertisement may be overlooked.

Personally, I would recommend Pepsi to set up a special website like they did with their MLB (Major League Baseball) sponsorship. Pepsi listed a website on the side of each can which directed consumers to www.pepsiclutch.mlb.com via a tie in with MLB. However, the print was very small as I just recently noticed to website on the side of the can. Hopefully, Pepsi will take a similar approach with its new campaign to encourage recycling.

Pepsi could list interesting information regarding recycling and packaging information on such a dedicated website. It would be a great resource for consumers interested in finding out information about Pepsi's stance on environmental issues.

Google Maps Features YouTube

Google maps are starting to incorporate YouTube. This should make search for places more interesting. I wonder what will video will show up if I look-up my local dentists.


















You can read more about this new feature at Mashable, a social networking news site.

Coke Zero Buzz Trending Downward Despite NCAA Marketing Push

Overall, online buzz about Coke Zero is trending downwards despite a strong marketing push during the 2007-08 NCAA Men's Basketball tournament. It will be interesting to see how Coca-Cola's financials look after this quarter given the huge marketing-related expenses allocated toward Coke Zero.

Coke Zero Online buzz January 1 - April 10, 2008

Twitter Without the Jargon

I came across an interesting video on YouTube demonstrating how to utilize Twitter in everyday normal life. Overall, I think the video highlights some of Twitter's strengths. However, I feel Twitter can be improved if people can go beyond simply anwering, "What are you doing?" Consumers need to be able to state what they are doing, discuss how they feel and provide opinions. For instance, someone watching a movie could Twitter, "I am watching a great movie and I highly recommend others to check it out!" Additionally, I'd like to be able to state what I plan to do in the future (both short term and long term). Twitter has all the right ingredients to become something big. However, it still has a ways to go.

Also, I think Twitter needs to find a way to allow companies to utilize its tool. As a marketer, Twitter would be a great tool to inform potential customers about new products and services being developed and/or offered. I would love to Twitter information about my companies products and services knowing thousands of followers could view them. The presidential candidate John McCain currently utilizes Twitter. I can envision a day when marketers will be able to as well.

Anyways, you can follow me at Twitter by searching for rcoyle85 at Twitter. Also, please let me know if you use Twitter now or plan to use it in the future.

FriendFolio Makes Facebook More Interesting

Check out FriendFolio. This will make Facebook more interesting.

You can read more about FriendFolio at Mashable, a social networking news site.

McDonald's Tries to Lure Fashion Crowd

Ad Age reports that McDonald's is trying to lure a couture crowd. Apparently, McDonald's feels that fashion freaks and fastfood-goers have a lot in common. They both look for great deals. McDonald's hopes to attract new crowds with discount offerings, value pricing and lighter fare menus.

Personally, I feel the idea may work in select markets (i.e. New York City, Los Angeles among other significant metropolitan areas). However, I don't think it will be easy to attract the fashion crowd in more suburban and country areas. Additionally, McDonald's should think about doing some joint marketing with brands like Macy*s, Nordstrom or Saks Fifth Avenue to reach out to the fashion crowd. Furthermore, sponsoring fashion events or shows like "What Not to Wear" may help McDonald's reach out to the couture crowd that is always looking for great products at the right prices.

Scribd Becomes the YouTube for Documents

This is an interesting post about Scribd that was featured on Mashable, a social networking news site.

Let me know what you think!

Connecting withYouth on Social Media Sites

As most marketers know, connecting with the youth of today is a daunting task. And while it seems that we were all teenagers yesterday, we just don't seem to "get it." Anyways, my lil' brother is a member of a band called Shooting for O'rian and they have done a good job marketing themselves, at least for a small band. They have only been in existence for several months now, but have more than 900 friends on Myspace. Overall, I am very impressed with how they are getting their name out. Additionally, they are able to reach out to many people in their age groups (i.e. teens and young adults). Therefore, it got me thinking. How can a small band get this but not corporate America? Well, I have been doing some thinking lately and I've compiled a list of several things that my lil' brothers band does right which corporate America does not.

1. Shooting for O'rian offers free downloads. I would almost recommend any company looking to connect with youth via a social media outlet (i.e. Livejournal, Xanga, Myspace, etc...) to offer some type of free, perhaps downloadable, content. This approach may be very effective for gaming companies such as Nintendo, Microsoft or Sony.

2. Be original. My lil' brothers band can play cover songs. For example, they played Snow Patrol's "Chasing Cars" at a recent concert, however, you won't see them put it on Myspace to simply make a name for themselves. I requested my brother to put that song on their Myspace profile for people to listen but he told me that his band wants to be known more the the music that they create themselves. The lesson learned is that anybody can re-hash the same old stuff. Be original!

3. Companies need to do a better job differentiating themselves. What is the real difference between Burger King and McDonalds? I don't know either. Now Taco Bell has clearly differentiated itself by getting consumers to "Think Outside the Bun." Additionally, co-sponsoring events such as X-games with Mountain Dew has clearly been a win-win.

4. Use social media venues to solicit user-generated content such as videos, screen shots and testimonials. Additionally, submit ideas (i.e. create polls on various topics of youth interest) in which younger consumers may be able to provide input. For example, a company could partner with Myspace to create a poll asking youthful consumers which attributes or rewards they like with a particular product or brand.

5. There are a lot of bands trying get ahead in the world. And they are using Myspace to promote themselves. Additionally, these bands are playing in small venues on over the weekends and participating in every "Battle of the Band" contest available. Companies looking to reach youth may want to look into sponsoring some of these "Battle of the Band" events. Unfortunately, I would not suggest sponsoring a band outright though, espcially since the small bands may be seen as "sellouts," thus reducing their credibility and costing a company more money in the long run.

Please feel free to ask questions or leave comments regarding some of my suggestions about ways to reach young consumers. Any feedback is greatly appreciated.

Sony Bravia Paint Commercial

Below is the actual Sony Bravia Paint commercial along with some follow-up information. Personally, I think this commercial is pretty cool. Let me know what you think.

Sony Turns Back the Clock

AdAge.com writes about Sony Re-running vintage ads to promote recycling of its products. Stuart Redsun, senior VP-corporate marketing, showed mock-up TV ads at a press meeting today to emphasize that Sony is "recycling our old commercials to remind you to recycle your old electronics."

Sony is working with Waste Management's WM Recycle America on its goal to set up e-waste recycling points within 20 miles of the majority of U.S. consumers. So far they have around 100 drop-off points, and should have at least one in each state by the end of the year, a Sony spokesman said.

Sony first launched its green initiative last August, and the company said it has resulted in 1,000 tons of recycled electronic waste. Beyond the green push, Sony plans to continue with an umbrella effort, which also began last summer, that unites its products by touting their high-definition DNA (thus the campaign's name, "HDNA"). The push was the first to employ Sony's internally named "silver bullet" marketing plan.

Unfortunately, Sony is unclear of the impact that this campaign will have on its sales.

Overall, I think Sony should be congratulated for green initiatives. However, I think this idea may have more of an impact on Sony's sales if Sony takes action on three things.

First, I would allow consumers to drop off non-Sony products. I feel allowing consumers to drop off non-Sony products will help Sony reach out to consumers who are currently using other brands while encouraging them to look to Sony. Second, I would offer a discount or rebate on a comparable Sony product. For example, a customer who drops off a Sony PS2 or Xbox 360 could be given a coupon for 5% off the total price of a PS3. Third, I would work with vendors to have drop-off locations in-store. I don't know to many consumers who will drive 20+ miles to a drop-off location when fuel is $3.00+ per gallon. Setting up drop-off locations with vendors may help bring customers to stores where they hopefully purchase a Sony product.

Again, I think Sony is on the right track. I'm merely offering a few suggestions to help its green initiatives translate to sales.

These are just some of my ideas. Feel free to let me know if you have any others.

Twitter Appears on CSI

I was surprised to see Twitter featured in as a product placement on last nights episode of CSI (Crime Scene Investigation), titled "Goodbye and Good Luck."

You can find out more about the show by visiting its
website.

McSkillet Buzz Rises Due to National Sample Giveaway

Advertising Age posted an article about McDonald's giving away breakfast burritos February 26, 2008. McDonald's is planning to give away more than 2 million McSkillet burritos the today (February 28, 2008) and tomorrow as part of a national sampling event.

I was not aware, but apparently McDonalds took a similar approach offering "Free Coffee Mondays" to get consumers to taste its coffee in the past. Therefore, I wouldn't be surprised to see McDonald's take this approach moving forward. It is definitely "out of the box" thinking.

"Sampling is critical to any marketplace," said McDonald's spokeswoman Shanelle Armstrong, who said the McSkillet burrito, which launched last November, has "performed well" and that the giveaway isn't a reflection on its performance. "Ultimately we want to get our product in our customer's hands, and we're committed to doing that like never before."

In a study the chain commissioned from Kelton Research, McDonald's reports that about 48% of Americans grab breakfast on the go at least once a week. This particular finding is very interesting and I would have to say that I am probably one of those the 48% of Americans who eat breakfast on the go at least once a week. Therefore, it does make sense that McDonald's would give away McSkillet burritos, especially if it wants to increase traffic to its restaurants in the mornings.

I went and got a large French Vanilla coffee and "free" McSkillet burrito this morning. Overall, I was very pleased with the McSkillet burrito. However, I would recommend that McDonald's should introduce some alternative meat selections. Unfortunately, I'm not a huge fan of sausage. I'm much more of a bacon person myself. Nonetheless, I finished my McSkillet burrito. All I can say is, "Watch out Taco Bell!" I was very pleased with the spiciness and flavor of the burrito. Additionally, I'm glad McDonald's didn't go cheap using only green bell peppers. There were plenty of red bell pepper chunks in my McSkillet burrito.

We'll, I'm recommending everyone I know to at least give the McSkillet burrito a try. It may not be for everyone, but overall I think it is pretty good. I'd give it an "A.

Below is trend chart showing buzz for the McSkillet. As you can see, online discussion on blogs about the McSkillet burrito is really taking off as a result of being given away for free. Buzz in this chart does not include posts on message boards or Usenet groups.














Let me know if you have any questions about my experiences trying the McSkillet burrito or questions about my brief data analysis.