Fast Food for Night Owls

Denny's has a new campaign to attract young adults with late-night/early-morning switch in music and menu. WSJ reports that so far, nightowl traffic is up 5% but the chain's overall sales are flat or slightly down.

McDonald's late-night hours are driving traffic into its European restaurants . . . and as the image here shows, KFC has a special late-night menu in its "The Colonel's Gone Nocturnal" program.

Courting young adults should mean lots of social media activity. I know KFC has a big MySpace presence, and it's also on Facebook and Twitter. McDonald's San Diego restaurants tweet here, and it has other Twitter accounts for Brazil, NW Ohio, and greater Cincinnati. YouTube is filled with commercials and tributes (flattering and not so flattering) for all the fast-food brands. Enough said.

Who could miss Burger King's quirky campaigns aiming for the young adult segment? They've helped BK vs. Wendy's but not, so far, helped it catch up to archrival McD's. Burger King has been doing interesting things with social media, of course. Remember its "Delete 10 Facebook Friends, Get a Free Whopper" campaign from just 6 months ago? Very popular, and got BK a lot of publicity and WOM. Maybe it was too offbeat for mainstream tastes, but pitched just right for the late-night crowd.

Energy Drinks and Targeting

Now that Rockstar energy drinks will be distributed by Pepsi instead of Coca-Cola, I guess all the vending machines that sell it (like this one in Massachusetts) will be pulled or get new front panels.

Did you know that Rockstar is #3 in volume within the energy drink market, according to Beverage Digest? Red Bull is, surprisingly, #2 and Monster, which Coca-Cola will be distributing, is #1.

New entry in energy category: Shots like 5-Hour Energy, a drink in 2 oz. mini-bottles that gives the same "jolt" as a big can of energy drink. Adults are the company's target market, according to the creative director of 5-Hour Energy's parent company, who says this about the competition:

"If you look at the canned energy drink array out there, if you look at the names, if you look at the graphics on the cans, it’s obvious who they have in mind for this —- teenage boys. I have teenage boys at home, and they’re the last people on Earth who need more energy.”

Looking at the Rockstar vending machine, it does appear that the target is younger people. Is it glamorous to get a shot of energy from drinking Rockstar? Still, the location of this vending machine might suggest that the target is anyone who wants to stay awake while driving on the turnpike. I'll stick to non-energy drinks, thank you.

Remember RFID?

Only a few years ago, Wal-Mart was pushing RFID on its suppliers as a way to track merchandise from source to distribution center to stock room to selling floor. Today, new-generation RFID tags are helping Wal-Mart, Walgreens, and others trigger restocking efforts and coordinate displays with timing of advertising flights. RFID is even being used to track surgical sponges in hospital operating rooms to ensure that patients don't go home with extras sewn inside.

To find out more about RFID and its latest uses in retailing and beyond, I periodically click over to RFID Journal. That's where I learned that RFID technology is helping track King Tut's treasures as they trek around the museum world in various exhibitions. Interesting vision of high-tech helping King Tut.

Overloading Podcasts with Ads

I recently started listening to a podcast from the 30-yr-old Sears Radio Theater, which was an ambitious but short-lived attempt to recapture the golden days of radio. Sponsored by Sears, the five-day-a-week series featured big stars hosting big stories of adventure, love, etc.

Here's a link to the episode I wanted to hear, titled "Then There Were None." However, as you'll discover if you click to listen, the episode is larded with two kinds of commercials.

First come the Old Time Radio Network ads for Brookstone, etc. When those are finally over, the original radio intro starts. Sears wanted to get its money's worth and as the sole sponsor, it sprinkled ads throughout. Not just one or two ads at the start, but lots of ads at regular intervals. Sadly, I never finished the podcast because of all the commercial interruptions. Life is just too short and there are too many other podcasts waiting to be explored.

Podcasters, please keep your ads short and to the point. NPR's podcasts are a good example because they weave in the name of the sponsor without hitting listeners over the head again and again. Why risk annoying listeners? A gentle reminder goes much further than heavy-handed hard sell.

Toyota's 10 Million Car Problem

Toyota has the capacity to crank out 10 million cars a year, even if the global recession has slowed demand. Its Prius is the big winner in hybrids and could lead the way toward an extensive fleet of eco-friendly Toyotas. But Prius sales are a fairly small percentage of Toyota's global sales at this point.

Looking at the road ahead, China could be Toyota's best hope for making the most of its production capacity. According to Forbes, that country's consumers may soon be buying 20 million cars a year. And Akio Toyoda, the new CEO, knows the market well because he's managed some of Toyota's Chinese operations.

Toyota is going to produce its new Crown luxury sedan in China for the local market. It's also stepping up dealership activity in China. All told, the China market moves 11 million new cars every year--no wonder Toyota is steering in this direction.

Cannibalize Yourself

Quick--before a competitor comes along to eat your lunch, be the first to cannibalize your own products. If customers are going to move on in search of the new new thing, be sure it's your new thing.

That's the philosophy of successful marketers like Gillette and Apple. Reading "5 Reasons Gillette Is the Best a Brand Can Get" reminded me of this important principle. Gillette brings out improved razors every few years and then communicates the benefits of the new model over and over again to drive buyers to the new. Take a look at the Gillette Fusion Power Phenom page, featuring all the flavors of Fusion. Naturally the new product is priced higher than the old product--and buyers need to buy new blades for years and years, a steady source of revenue that stretches to the horizon and beyond.

Consumer packaged goods and high-tech products have entirely different lifecycles, yet the cannibalization principle is the same. Apple has prospered launching new, improved iPods in quick succession, prompting many current customers to trade up to the latest models. The company is relentless in its cannibalization of its own products, beating competitors to the punch time after time. And Apple beats back competition with its App Store secret weapon, another steady source of revenue that stretches to the horizon and beyond.

In Poland, Tesco introduced a range of "Discounter" products at lower prices to cannibalize its own grocery merchandise as competitors such as Aldi and Lidl were drawing interest from bargain-hunting consumers. The message to shoppers was: "No reason to go to discounters."

So go ahead and cannibalize before your competitor eats your lunch. Just be sure you know your customers well enough to introduce something with extra value they can't resist and can't get anywhere else.

Wanna Buy a Vending Machine?

Who knew? Costco's latest e-mail promotion features business goods and services, including . . . vending machines. Not just one or two, but 15 different varieties. A basic 3-container gumball machine is $149.99 but the big snack and drink machine is a whopping $4,499.99. Snacks and drinks are extra, of course.

Costco isn't the only place to buy vending machines online. There's Vending Machines Unlimited, which has $139.00 double-container gumball machines all the way up hefty refrigerated bottle vending machines for $4,995.00. Visa or MasterCard accepted here, unlike Costco's cash or debit card or Amex card policy. Lots of other places are also selling or leasing machines.

And don't forget to look for the Energy Star label, which the EPA and DEA say will save up to $150 per year on a vending machine's energy costs.

Seriously, vending machines are increasingly sophisticated, from the kind that FreshDirect uses for its 4-minute meal entrees to the stylish ones that dispense perfume and cosmetics in malls and department stores. Vending machines going high tech--good idea.

Private Label Is Booming

Brandweek reports that Amazon is expanding its private label offerings. Its newest: Tom Douglas by Pinzon, brand of kitchen utensils from the celeb chef (see above). This isn't one of those generic private label excursions--it's more like Target's deals with designers, an attractive combination of style and value.

Best Buy is also adding private label goods, to help with market share and (of course) to boost profit margins. Its brands include Insignia, Dynex, Geek Squad, Init, and Rocketfish.

In short, it's no surprise that private label is booming. People are trading down, period. Even after the economy finally recovers, buyers are not going to go back to manufacturers' brands in every category. At least some of the new buying patterns will become long-term habits. In some circles, frugality is the new status symbol, which is just fine for private label manufacturers and retailers.

According to a survey just released by the Private Label Manufacturers' Association and GfK Custom Research:

• 91% of respondents plan to keep buying store brand products after the recession ends;
• 8% said they will stop buying these products once the economy rebounds;
• 90% of respondents said private label items are as good as, or better than, national brand products.

Nonetheless, some big-brand fans will remain loyal no matter what, and some will still make a show of buying certain brands when others can see the purchase or when the purchase has particular meaning (given as a gift, for instance). Next year at this time, let's see how many people really keep buying those store brands and how well the big brands are doing.

CDC Builds Informed Buzz

Widgets, blogs, Twitter, eCards, mobile updates, YouTube videos, Facebook and MySpace pages--all hip social media tools and all being used by the Centers for Disease Control and Prevention. It's smart marketing to use 21st century technology to build informed buzz about health-related issues.

Informed buzz is the key. The CDC wants to correct misinformation, provide facts, and encourage healthful attitudes and habits. WOM is a good way to support official notices in mainstream media and spread the word informally, person to person.

I'm not sure how I'd react to receiving a "Wash 'em" hand-washing eCard, but as H1N1 flu spreads around the world, I'm interested in finding out the latest. Apparently some 8,700 people feel the same--that's how many are following the CDC's flu Twitter updates.

Our tax dollars at work! Building informed buzz makes sense, especially when our health is at stake.

Update: Nextgov reports that a number of US agencies have agreements with Flickr, YouTube, Facebook, Vimeo, etc. "We're looking at taking information wherever citizens go to get information," a GSA official tells Nextgov. Smart, indeed.

Up and Down for Six Flags

Six Flags just filed for bankruptcy, citing heavy debt. Its corporate site explains, in great detail, why Six Flags made this decision and what it means.

All of its theme parks remain open . . . and attendance is actually up, thanks to lower admission fees, new attractions, and increased interest from bargain-hunting families seeking staycation fun.

The president of Six Flags Discovery Kingdom in Vallejo, CA says: "We are not cutting anything. If anything, with our increasing attendance, we're actually going to be looking at improved spending to bring on more team members and support to provide service to our guests."

Will the bankruptcy news act as a brand reminder, drawing people to return to their favorite park? Will it encourage visitors to look for discounts and go to Six Flags more often because they view it as more affordable? Will it bring more media attention and reinforce the family-friendly atmosphere that Six Flags needs to project? Or will it discourage people who fear their season passes will be a waste of money because of the bankruptcy filing?

Scribd and E-Book Pricing

Scribd has an interesting approach to pricing e-books. The owner of the content (author or publisher, depending on the book) can choose to set the price, which must be $1 or more. The owner gets 80% of the revenue, which is more than would be received from a traditional etailer or retailer.

There is another way to price books on the site, according to Scribd's support desk: "The second option is Scribd's Automatic Pricing, which uses Scribd pricing algorithm to determine the best price of your document based on similar content and market signifiers."

Hmmm. I take this to mean that the price will change based on what competing books sell for and how demand ebbs and flows.

Simon & Schuster has agreed to sell 5,000 of its books as downloads through Scribd, according to yesterday's NYT. The last time the NYT did an article about Scribd was a month ago, when Brad Stone pointed out that the company is attracting interest because authors and publishers are concerned about the enormous and growing power of Amazon and Google.

Can Scribd get the mass it needs to be a serious contender? The Simon & Schuster deal is a good start. Competition is good for consumers, publishers, authors, and all.

Give Something Back

Give Something Back sounds like a nonprofit but it's actually a highly successful office supply business in California that donates profits to charity. Founders Sean Marx and Mike Hannigan got the idea from the Newman's Own model and today sell some 40,000 office products (including 6,000 green items) from distribution centers and a slick yet friendly web site. Its main competitors are Staples and Office Depot.

Sustainability is more than a slogan--it's a business way of life for GSB. The company takes back cardboard boxes from customers and recycles them; it also picks up other waste and sells it to recyclers.

The money raised from selling merchandise goes to support dozens and dozens of nonprofits, everything from Home Start Inc. and Habitat for Humanity to San Francisco Food Bank and Senior Center of Elk Grove. Since 1991, when the company was founded, it has donated nearly $4 million to good causes. Think of it: Green and giving something back.

Tweaking Twitter

Twitter's web presence didn't always look as it does today. Using the Internet Archive site (one of my faves), I browsed Twitter's past.

At the beginning of 2006, the site was rudimentary and to-the-point, with the now-famous blue background and (c) Twitter. Landing-page copy began this way: "Twitter is for staying in touch and keeping up with friends no matter where you are or what you are doing."

At the end of 2006, the site looked a bit more recognizable, still text-heavy, and its copyright was shown as (c) 2006 Obvious.

In mid-2007, the site is awash in Twitter blue with round thingies, and at this point it asks the familiar question, "What are you doing?"

For a bit more about Twitter's past, I found this interview with Dom Sagolla. And of course what would we do without Wikipedia's take on Twitter's past?

BTW, according to the Internet Archive, the twitter URL was owned by dotist, a "web business development partner," in 2002. In 2004, the URL seemed to be parked and waiting to be scooped up. . .as it was. What a scoop.

KISS KIT

Two words for marketers today: KISS KIT.

Keep it simple, stupid--Keep it transparent. Transparency builds trust--it's that simple.

Lack of transparency landed Sears Holdings in hot water with the FTC. It just settled an FTC complaint that it hadn't disclosed the extent of the web tracking its "My SHC Community" software would monitor. Users received $10 to download and keep the tracking software in place for a minimum of a month, part of a Sears marketing research study. However, unless they read the entire lengthy agreement, they couldn't know how much of their browsing habits would be tracked. "The complaint charges that Sears' failure to adequately disclose the scope of the tracking software's data collection was deceptive," said the FTC statement.

Lots of sites have lots of monitoring going on in the background, and even heavy users may not be fully aware of the implications. According to a study released this week by grad students at UC Berkeley School of Information: "Popular blogging sites were among the most active trackers, the students found. Blogspot, for example, had 100 "bugs" — or tracking beacons — on its site, and Typepad had 75." As you read this blog, you may very well have a tracking beacon trained on you.

Then there's the terms of service dilemma. You always read the entire TOS disclosure before you visit a site, right? Yet today's TOS may not apply tomorrow. Don't want to re-read the disclosure every time you use a site? The Electronic Frontier Foundation can help. It's checking hour by hour to see whether popular sites such as Amazon, eBay, Google, and Facebook, hour by hour, are changing their terms of service. You can see the results on its Terms-of-Service Tracker site.

Remember: KISS KIT.

Still Learning from Webvan's Failure

Exactly 10 years ago, Webvan opened its virtual doors as a U.S. online grocery shopping site. Alas, it was not long for this world. "After burning its way through more than $1.2 billion in two years after its high-profile launch, the company declared bankruptcy in July this year," said an insightful Knowledge at Wharton article in late 2001.

Today, online grocery shopping is not only alive but doing quite well in many countries. Webvan's spectacular failure didn't deter other competitors from finding new ways to profit from online grocery retailing. Convenience counts, reliability counts, selection counts.

Peapod (image above), owned by the people who operate Stop & Shop and other U.S. supermarket chains, has a solid customer base and revenues are up, despite the down economy. One reason for its success is brand recognition--it was one of the pioneers of the industry and has never stopped promoting itself. Even friends who prefer going in person to select that perfect package of strawberries or a ripe tomato from Stop & Shop sometimes shop for staples on Peapod's easy-to-navigate site.

Independent groceries are competing by offering online shopping but not delivery. This works for some shoppers and at least allows the independents to offer some online convenience--and avoid some of the logistical nightmares that tied Webvan up in expensive knots.

In the UK, Tesco's online grocery service, one of the first and certainly the largest in the region, remains an important part of the supermarket's business model. However, Ocado (which fulfills orders with foods from Tesco competitor Waitrose) is especially hot these days, with by far the highest customer satisfaction scores in a recent survey. Apparently customers like Ocado's accuracy, selection, prices, quality, and friendly service. Ocado has the magic touch that Webvan lacked.

Still, past performance is no guarantee of future results. Or, as another cliche notes, success is never final. In the end, Ocado and Peapod and their competitors have to win customers one order at a time, day after day after day, and keep them happy (or make things right) every time.