BrandWatch by Michel Gutsatz

P & G's Sustainable Development Strategy

There are currently two very different strategies pursued by multi-brand groups in the U.S. in their drive towards sustainable development:

• A "sustainable brand” strategy: Clorox and S.C. Johnson have both chosen to create a "green" cleaning range. Both groups have regrouped all their "green" cleaning products under a single label - Green Works and Nature's Source respectively, with remarkable success. Clorox extended this strategy to beauty by acquiring Burt's Bees. This is a classic brand portfolio strategy: Aware that consumer preferences have been evolving towards eco-friendly products, a "green" label is added to the existing portfolio. This niche strategy is a direct response to the development of green private labels that distributors have been creating, but which targets the most fervent "green" consumers.
• A "transversal" strategy: The approach chosen by P & G is totally different, targeting all mainstream consumers. Advocating a long-term vision for sustainable development, the group decided to gradually reinforce the "green" dimension of most of its flagship brands. It created "Tide Coldwater", an “Ultra Downy" softener, using 35% less plastic for each container, developed rechargeable batteries at Duracell... There is no "green" label as such at Procter.

In fact, this "product clean up" approach is one that many brands worldwide have been implementing. However, Procter added two unique features, thus converting it into an innovative strategy:

Abercrombie & Fitch: Zero Points in Japan

A few weeks ago I proposed an objective analysis of the Abercrombie & Fitch business model, where I contended that it is a pure marketing concept, and that progress cannot be based on a constant race against time.
Before its soon-to-be opened stores in Europe, it opened an 11-storey store in Tokyo last December. The Japanese fans of the brand (those who had purchased its products in the U.S.) contributed to make the opening a success but .... but the press immediately ripped it apart. They underscored 2 reasons to predict a dull future for Abercrombie:

• Its price positioning: at a time when the Japanese evince profound changes in their attitudes towards luxury and where the brands that are doing well are Uniqlo, Forever21 or H & M – i.e. brands that make moderate prices a real sales argument, Abercrombie & Fitch has chosen to offer its products at prices that are double those in the USA! This is making a fundamental error where Japanese consumers are concerned; they have become much more sophisticated and are no longer prepared to overpay any product.
• Its cultural positioning: the brand has chosen an approach based on American codes - which happen to conflict with most Japanese cultural codes - The choice of a non-Japanese sales staff, a noisy ambiance considered as inappropriate by the Japanese, the choice of English to address the customer(s), shirtless male vendors, the use of perfume in a confined space, the lack of light that prevents one from judging the colour or quality of the product... a whole series of issues that were alluded to which show that the brand has deliberately chosen to replicate the codes that made it successful in the U.S. at the risk of alienating a significant number of its potential customers in Japan.

Time will tell whether this is a wise choice or if the brand will, like others before it, close shop and retreat to markets more in line with its values.

La Perla: Back to Essentials

2001: 184 million € / 2004: 163 million € / 2005: 210 million € / 2006: 186 million € / 2007: 184 million € / 2008: 175 million € / 2009: € 155 million

The decline in the turnover of La Perla is eloquent. The luxury lingerie brand, created in 1954 by Ada Masotti has seen its sales stagnate since 2000 and then decline sharply in the last two years. However one may look at it, the crisis has taken its toll on this superb brand for several years: 2004 and 2005 already saw losses and layoffs. Finally, in 2007, the brand was acquired by the JH Partners foundation and Alain Prost was appointed the new CEO in 2008.
What ever happened? Three events which led to this situation occurred during the last 10 years:

1. The brand extended to the ready-to-wear market in 2002: Like Mandarina Duck, Bally or Wolford, La Perla believed it should develop in fashion ... because it was a luxury brand. "The move to ready-to-wear was inevitable”, Alberto Masotti explained in Le Figaro. “La Perla has all the prerequisites to offer its customers a complete wardrobe and we continue to work in this direction”. This move was compounded by a dilution of its image: La Perla was an Italian lingerie brand, which talked about the Italian woman, in a style that conveyed sophistication and comfort. But it became just another fashion brand among others where products ‘in fashion’ represented 90% of those proposed! Even the composition of the collection drifted away from the classics, standards, the top-class, and the brand lost its savoir-faire.
2. A multiplication of collections at the expense of visibility. There were about a dozen: Black Label, Limited Edition, Bridal, Anna Club, Aquasuit, Joelle, La Perla Studio, Malizia, Glamour, Occhi Verdi, Nero Perla, and others. This could only cause confusion in the mind of the client.
3. Placing itself in the very high price range

The new team has decided to return to the basics of the brand by implementing a new strategy:

• By constructing it around 3 collections (La Perla / Villa Toscana / La Perla Studio), that represents 85% of sales, together with Nero Perla, the high-end range of the brand;
• By lowering prices by 25% - and a distinct graduation of the 3 collections;
• Reducing the “trendy” collection by half;
• Manufacturing some of the collections in Asia.

After having experienced a similar situation at Bally and having made a strategic analysis of Mandarina Duck in 2008, it is quite evident to me that a brand must never lose sight of its essentials - and especially those that represent its value in the eye of the customer.

USA: Retailers Promote Local Products

In recent months, several U.S. distribution chains in the U.S. have become aware that consumers are increasingly looking for products that are guaranteed of local origin. Several converging reasons have led to this:

• Some see it as a means of defending regional employment;
• Others see it as a guarantee of authenticity (taste, traditional recipes, handcrafted, products that respect the cycle of the seasons...)
• While others see it as a means of reducing the carbon footprint of the product.

It is for these consumers - called "locavores" – that several initiatives have been taken recently:

1.   Weis Markets, a chain of 154 supermarkets on the East Coast, launched a campaign entitled: "Local and Proud of It”. Wishing to promote the almost 10,000 tonnes of products purchased from 150 regional producers, the brand highlights the fact that 20% of its fresh produce is purchased locally.
   
2. Spartan Stores, a group of 99 supermarkets in the Midwest, promotes 2400 fresh and grocery products produced in Michigan by 42 local suppliers (including Yoplait and Kellogg): "Michigan's Best". The retailer maintains that 10% of the products it sells are produced locally – as against 20% of their private label products.
   
3. The most interesting initiative comes from Meijer which has recently repositioned its premium private label, Meijer Gold, with the slogan "Unique Foods from Unique Places". It is built around 3 main themes: "produced locally" / "family recipes" / "local specialties". Here we find the themes already employed by French private labels such as “Nos Régions ont du Talent” ("Our regions have Talent") from Leclerc or "Reflets de France" (“Reflections of France”) from Carrefour. However Meijer innovates by highlighting producers who are either local or "family owned" - like Whole Foods Market already does.

Thus a growing number of retailers seek to equip themselves with new key factors for success – other than the price factor. Highlighting the origin of their products and the links it creates with the regional production network, in my view, is a way to progress in the future.

Brands & Kidexpo "Could do Better"!

A very special exhibition for children is held every year in Paris since 2007: Kidexpo. Kidexpo is a source of ideas and solutions in all matters related to the bringing-up of children. It is therefore aimed primarily at parents, teachers, childcare professionals ... and at children themselves. 60,000 children attend it along with 30,000 parents ... I was interested in this exhibition because I saw in it a wonderful means of communication and education on topics as sensitive as those of nutrition or organics. But the numbers are (unfortunately) very revealing: Out of the 191 exhibitors (2009) there were in all and for all 7 food brands (Ferrero / Cereal Bio / Coca Cola / D'Aucy / Bel / Orangina Schweppes / Yoplait), and not a single distributor! Some even used the exhibition as just a platform to launch new products (like distributing free samples....).
I think that brands and retailers still have an "archaic" conception concerning communication with regard to children. The reason is twofold:

1. They have not yet understood that they have an important educational role to play: the parents expect institutional and industrial brands and retailers to lead the way and guide them in the basics - how to eat well, how to respect the environment, how to encourage accountable behaviour ... but they are looking for approaches that are enjoyable, new, innovative...
2. They find it difficult to accept the non-commercial: Consumers today expect a relationship that is not immediately targeted sales or marketing. They seek advice and experience. A brand like Apple has understood this perfectly (see my post of 29 June 2008): it is by being strong in the non-commercial aspects that its sales have grown.

Fortunately, others have grasped the opportunity that such a show represents. France Info organizes programs where children act as journalists: Encouraged by real journalists who train them, the children learn to create a programme, and leave with a CD on which it has been registered.

As for the CNIEL (a professional organization on milk), it has admitted that the art of cooking is not transmitted from most mothers to their children and, often, only the grandparents still possess culinary skills. They therefore organized "Cooking Workshops" where grandparents teach their grandchildren how to cook. They discover taste, how ingredients work ... and become keepers of a tradition.
How is it that distributors who wish to be pioneers in matters of nutrition or sustainable development do not invest in this exhibition? How is it that organic brands do not deploy a whole arsenal to teach children about taste? Though they must be careful: They should show imagination and creativity … and turn it into a real strategy!

The Hôtel des Thermes in Saint-Malo, a Story with a Happy Ending

by Virginie Michelet

But which certainly started badly. Arriving at the TGV train station at Saint-Malo on a Monday at lunchtime (train = travel = mild fatigue + lunchtime = hunger = bad mood probable), there was no one to greet us despite the letter assuring us otherwise. A quick phone call to reception (find a telephone, brave the drizzle), "The driver is on his way". Another wait. Long. Call again, "Ah, I was there but I saw no one". "Where?" "At the taxi stand!" - "But we do not know the station, Sir!" "Oh, I will come and fetch you then". This kind of miscommunication can go on for a long time. I am both surprised - I had already stayed in this hotel before and I loved it - and furious - this time I came with my friend, to whom I had sung the praises of the hotel. Unfortunately it continues: No "Good-day!" from the driver. At the reception, the same attitude: I explain the problem and the receptionist just nods, looking at me with glazed eyes. I admit: it really gets on my nerves, and I let him know. The glazed eyes turn to beady. "And the room? We begin the cure in one hour and we need to change" - "Uh, I'll do my best to get it ready", says the Kafka look-alike. "We are here for a 'Sea and Fitness' treatment programme. I wonder if we're going to enjoy it!", I protest, loud enough to be heard by those around us. Exit the receptionist, in the direction of the restaurant. I plan to go and seek an explanation from the hotel management immediately. A little further away, at the bar, I nonchalantly ask the barmaid whether the owners have changed since the last time I came here five years ago. Nay. It is the same family in charge. Weird, my last visit left me with such good memories. After a quick and not particularly friendly, meal, I apologize profusely to my darling who, princely, just gives me a sorry smile.

Finally, we get to the room. For once - I am a bit difficult, you guessed it! – there is nothing wrong, our lodging is perfect. It is time to go for the first sessions. Circulatory shower, tonic pool, underwater cascades and manual bathing (a pure delight) follow one after the other. Really? It is odd, my resolve to talk the management is less firm. The dinner hour arrives. We had asked for a diet menu for I know that the dishes are carefully prepared and delicious. Why heap on the pounds when you can lose them with the same pleasure? A hostess takes charge of us, we are pampered, and seated at a table that suits us perfectly, served the appropriate menu that is clearly explained to us. And it is totally enjoyable. The next day, a new salvo of treatments, one more relaxing than the other. In the afternoon, I completely forget to complain to management and we gulp in the sea air all along the beach to the famous ramparts of Saint Malo, with a song of Hugues Aufray on our lips ...

And after? The relaxation then sets in, the service is attentive, the treatments well executed, a judicious use of time, the piano of the bar is exactly like a piano bar should be, herbal teas that are original and delicious. We succumb to the good-natured atmosphere, with breakfasts as varied as they are hearty (I swear, we had to made an effort to be reasonable), then healthful cooking lessons taught by two chefs: the salty Patrice Dugué, and the sweet Pascal Pochon, who, together with the dietician, have decided to keep us fit AND in good spirits. In short, what was this glitch at our arrival? Sleeping, drinking the two bottles of Plancoët (a delicious mineral water from Brittany) that are graciously offered in our room, walking, having fun striding against the current in the water circuit, we read our books, enjoy the little chocolate laid on the pillow every night, we learn that there are no fewer than forty people in the kitchen and twenty-five in the bakery, with a bakery and chocolate factory on the premises, warming to the smiles and greetings of the staff we encounter. We loosen up, laugh, enjoy life, and remember that the last vacation was long ago, and we should perhaps take one more often.

The day of departure arrives. “Did you not say you wanted to talk to the director?" “Who? I? I said that?"  A little smile from my friend, with the question, "When are we coming back?" warms my heart.
We will never know what happened that Monday noon. Why, amid so much consistency and authenticity, we encountered such a snag. And to tell you the truth, we don’t particularly care!

(Thanks to Alphonse B. Seny for the photo!)

© Virginie Michelet
[email protected]

Brands and Social Media: Two Examples to Ponder

DuPont - the American chemical group - has just launched a rather innovative social networking campaign that is a great success on the Internet. The objective of the brand was to make the company more appealing to young professionals by showing the company and its business in a positive light. The choice of a viral marketing campaign with a video of 3 minutes was obvious. But the theme chosen is very interesting: elevate science.  That is how the "Science Stories" were born: One sees how the products developed by DuPont can benefit everyone. "Protecting the Protectors: Fire-fighters" shows how fabric can protect fire-fighters when there is a fire, and another, using footage from its archives, shows the same fabrics save Mario Andretti when he had a spectacular car accident; how a vest in Kevlar can withstand bullet impacts and protect the police (with stunning slow-motion shots to show the impact of the bullet); and still another on protection during tempests (they can be viewed on the DuPont website) ...


Estée Lauder has chosen to renounce the usual U.S. practice of "a gift with a purchase" and free makeup done by make-up artists. The brand wanted to strengthen its ties with its customers (and reach younger customers) by offering a service that the latter could use for their network profiles. It therefore offers them a complete make-up session (carried out in their corners in department stores) AND a photograph of the result (by a photographer) ... a photo (where there is also the Estée Lauder logo) to post on Facebook or elsewhere ... (thank you AdAge for the photo of the journalist!). The journalist said: "The whole experience was a lot more glamorous than my previous experience with the brand". The brand is thereby attaining a younger target.

In both cases the brands offer true value to their customers / consumers:

• A BtoB brand speaks directly to consumers / citizens and tells them about the positive role played by fabrics in their lives (the "Kevlar Inside" version from DuPont...)
• A beauty brand offers a real service (have we not often grinned at the poor-quality photos that one sees on social network sites?) by embellishing its clients and capturing a fleeting moment forever ...

Private Brands in Beauty Make "Natural" the Key Element of Their Success

In the Natural Beauty Summit Report just published (available here if you should wish to buy it), we rely on the work of Kline presented at the Summit last November to show how distributors take over the "natural" argument to develop their private labels. We recently saw two new examples:

• Casino (France) has launched a "Douche Gourmande" collection based both on pleasure and "naturalness": we have here an example of products "inspired by nature" where the "ingredients" are prominently displayed on the packaging. Shampoos and shower products containing lemon, figs, ... and "gourmet" fragrances such as "crème brûlée", red berry tarts, etc ... A collection that is typically "me too" which merely replicates the codes of national brands such as Ushuaia, Palmolive Naturals or Timoty (thank you nosclientsdemain for the photo!)
• Much more interesting is the new Kroger private brand (USA): Mirra. From the outset Kroger claims that the brand "is not a national brand knock off". The assertion is clear: "Part nature. Part science". We find here the positioning recommended by Risc during the NBSE: target consumers wishing to take advantage of the benefits of nature AND of science.
  
  
  

 
The dissimilarity between the two private brands is instructive for two reasons:

• Kroger intends to build a true transversal brand (as it groups together makeup, hygiene and skin care) which keeps pace with current consumer expectations.
• The modernity of the brand identity is also clear at Kroger. Where Casino offers us the nth brand inspired by nature (which therefore will not be distinguishable from the national brands, except in price), Kroger plans to build a real brand – as far as the image and the attention paid to volumes.

Which one would you like to see in your bathroom?