Look Who's At War: McDonald's vs. Starbucks and Banks vs. All of Us

A couple days ago, you may have noticed that McDonald's has declared war on Starbucks.

Here's a quote from one of the stories. "The coffee war is on, and the spoils are big: 57 percent of American adults drink coffee every day. And as CBS News correspondent Seth Doane reports, McDonald's is taking aim at Starbucks and making its biggest menu addition in three decades. Cappuccinos, blended coffees and pastries are traditionally Starbucks' ground. But, now, McDonald's wants a shot at the espresso market, too. Famous for the Big Mac, the fast food chain has brewed up a plan to add high-end coffees and bottled beverages to their menu. By doing so, they hope also to add a billion dollars to their bottom line."

If I were doing a positioning map, I wouldn't have Starbucks and McDonald's anywhere near one another. Would you? So this strikes me as a very interesting and curious move. Does McDonald's really think that a lot of Starbucks customers are going to be easily persuaded to abandon their daily Starbucks fix and visit a McDonald's instead? I'm sure that the wizards at McDonald's have researched this up the ying yang, but it seems to me that the in-store experience at Starbucks is a big part of the whole Starbucks attraction. In no way does McDonald's come close to matching this experience. Maybe McDonald's is going to focus on all those people who are drive-thru customers of Starbucks. Since they never get out of their car, they don't get the whole Starbucks experience and might be more easily swayed to drive thru at the nearby McDonald's instead. This battle will be interesting to watch, but my money is on Starbucks to weather this storm.

Earlier today, there was another marketing war that got some publicity.

Here's a quote on that battle. "Banks Have Declared War – On You. Changes are coming fast to the credit card world, and you can expect your bank to raise rates, slash credit limits, add fees and cut rewards. Consumers, brace yourselves, MSN Money's Liz Pulliam Weston says." Now here's a battle that makes even less sense. The banking industry is generating tremendous negative publicity on itself by actions that are obviously being taken with no regard for their marketing impact. Banks are quickly becoming a universally recognized "business bad guy" in America. I have blogged on this subject in the past and I remain flabbergasted at the marketing ignorance being demonstrated by our banks. Their disregard for their own customers and their willingness to alienate them is stupendously short-sighted.

There is going to be a huge opportunity for one of them to wake up and really differentiate themselves from the banking pack by doing the most basic and simplest thing in marketing.....siding with their own consumers - duh.

Sports Marketing - Objective Investment or Fantasy Fulfilled?

I'm a sports nut. I love to watch and I love to play, so I'm one of those people who gets exposed quite often to how companies use sports to market themselves. When I ran Coca-Cola's U.S. marketing, we were deeply engaged in sports marketing of all sorts - from The Olympics to NASCAR to the NFL/NBA/NHL to MLB to World Cup Soccer. So I know something about this.

If you market sports equipment or sports related clothing, it would be awfully dumb if you didn't associate your brand with your sport. Nike markets using sports. Under Armor uses sports. So does Gatorade. Duh.

It's more interesting to look at the companies that aren't directly related to sports and consider why they are using sports to market themselves and is this smart business. In some cases, it is. In other cases, you've got a CEO who loves a sport (say golf or tennis or NASCAR for instance) and who makes more of a personal decision to invest marketing money in a sport they happen to love. It's certainly a nice executive perk to be treated like a big shot at some major sports event while entertaining company or customer VIPs. But is it really justifiable from a marketing ROI standpoint?

It is rare to find a non-sports company investing in sports marketing if the top executives aren't big fans. I'll bet if you took a survey of all the companies that buy naming rights to major sporting events, 95% of them have top executives who are gigantic fans of that sport. They can use their company's money to buy an association that allows them to fulfill a dream.

The biggest sports investments of all are the deals to acquire the naming rights to a new stadium. These are $100 million deals and more, depending on the stadium. Is this EVER a smart investment? I think not. Remember Enron Field? Enron spent a fortune on that deal. Was that the best place for them to invest that money? Of course not. But those jail bird top Enron executives sure got their egos stroked whenever they went to games.

When times were rosy, companies could get away with doing these deals. Today, it looks ridiculous to invest money this way. Jerry Jones wants HUGE money for the naming rights to the new Cowboys Stadium. In this economy, it isn't going to happen. Jerry is going to bide his time. The new stadium will simply be Cowboys Stadium...for now. Visions of a stupendous naming rights deal are still dancing in Jerry's head. He's just waiting for the economy to turn around. Some company with a CEO who's a lifetime Dallas Cowboys fan will eventually get suckered into a deal.

Associating your brand or company with a sport makes sense when the demographics are right and when the imagery of the sport is reinforcing of the imagery you want associated with your brand/company. But the approach to analyzing these deals should be no different from analyzing what TV shows to advertise on. You'd never advertise on a TV show just because you were fan of a certain actor or actress. In the same way, companies need to objectively analyze any association with any sport to make sure that it is a financially sound way to build your brand equity and create sales.

Things That Make You Go Hmmm....

The most recent ads for Las Vegas

The originals were brilliant. Adult. Sophisticated. Clever. Engaging. The ones they're doing now are awful. Silly and stupid. What went wrong? Are the same people still in charge? How does a great campaign go so bad so fast? Too bad!

Fast Company List of "The 100 Most Creative People in Business"

Two advertising agency people are listed. Has there ever been a more loud and clear warning signal for an entire industry? The agency model is in very serious trouble. This is not a business that you want your son or daughter to get into. Trust me.

FiOS TV

Just got it. Verizon has hounded me for weeks to sign up. I finally succumbed (shows you again how important it is to be persistent in your marketing). It was a good call. Beats regular cable and satellite by a mile. And it costs less! You need to check it out. Why didn't the cable companies do this first?

Star Trek Movie

OK. I'm a closet Trekkie. Have been since high school. But the PR and marketing build up to the movie's release was brilliant and then the movie lived up to the hype. Kudos to the marketing team. Of course, brilliant products are always the easiest to market. But it's also a huge danger to over promise and under deliver. They got it right with this movie.

Retro Pepsi

Real sugar instead of corn syrup. What if the world likes it better? Can they really go back to the modern version? This will be interesting to watch. Could be a brilliant move or could be a major marketing blunder. Time will tell.

Fiat and Chrysler

Did you ever think you'd see the day when Fiat ("Fix it again, Tony") would be the savior of one of America's major automobile manufacturers? Will Fiat save Chrysler or will Chrysler ruin Fiat? If Mercedes couldn't fix Chrysler, why do we think Fiat can?

Cheerios and Cholesterol

How many of you ever really believed that eating Cheerios in the morning would lower your cholesterol? I guess they forgot to tell us that it only works if you substitute the Cheerios for the cheese omelet with bacon and sausage and buttered toast that you were eating.

Microsoft and Apple

Why doesn't Microsoft make Apple versions of all their software? Do they really think this is going to hurt Apple? Microsoft is simply missing an opportunity. It's time this silly practice comes to an end.

A Simple Thing That's Been Brilliantly Marketed - M and M's

Over the past decade, the folks at Mars have done an absolutely brilliant job of transforming M and M's (this blog won't let me use an ampersand, so the brand purists our there will have to tolerate this incorrect usage) from an ordinary candy to an icon brand - as powerful as any brand in the world.

They've done it using every weapon in the modern marketing arsenal. But it's really a story of crafty and consistent marketing investment behind one truly BIG IDEA that has been brilliantly executed and extended for many many years.

Here are just some of the things they've done that have leveraged the brand shrewdly.

1. Creating the animated characters: They gave the brand personality, charm and dramatically enhanced its distinctiveness. The team that originated the characters created a BIG idea that has made billions for Mars.

2. Leveraging the characters consistently over the years. They recognized a good thing and had the good sense to "keep on keeping on" despite what has probably been dozens of different executives managing the business over the years.

3. Using the power of licensing. Once the characters had established their appeal, Mars began cleverly licensing their use to build even greater brand ubiquity.

4. Opening Retail Stores. NYC has a great one. So does Las Vegas. Check one out the next time you have a chance. The NYC store is particularly brilliant due to the tremendous digital outdoor signage that is part of it and how that signage is being used to enhance the brand and draw people into the store.

5. Marketing product news on a regular basis. New colors. New things printed on the candy. Customizable candy. A "Premium" version of the basic product. The latest is Disney characters on the candy. Fun stuff that keeps the brand interesting.

6. Using NASCAR. The M and M Racing Team helps broaden the brand's appeal even further.

7. Investing in all the basics. TV. Print. Internet. They continue to throw gasoline on the fire. Smart!

I remember the brand before it became supercharged. It has taken Mars decades, but they have done a stupendous job of transforming a simple candy into an American icon brand. Kudos to everyone involved over the years!