February 11, 2010

37) PepsiCo

危 wēi  danger

The Superbowl is nearly as famous for its commercial breaks as for the game itself.  In fact, the commercials are more memorable than the game for many viewers – a study by ad agency Venables, Bell & Partners showed that 66% of viewers remember their favorite advertiser from the 2009 Superbowl and only 39% recall which team won.  However, this exposure comes at a hefty price, rates for Superbowl commercials run far above any other TV event because the game draws around 95 million viewers in the US alone.  30-second spots run close to $3m and the game typically includes 50 to 60 spots.  PepsiCo has advertised its cola during every Superbowl for over 20 years but it has become more and more difficult (and expensive) to stand out from the field.

机 jī opportunity

Instead of running the risk of being an also-ran, PepsiCo announced in December that it wouldn’t be advertising its cola during the Superbowl this year, instead it unveiled a $20m fund in which it is looking for people, businesses, and non-profits with ideas that will have a positive impact on US communities.  Anyone can submit and rate ideas and each month those rated highest receive grants of between $5k and $250k.  Moving away from the norm seems to have worked, in a recent survey by Nielsen, Pepsi’s ‘Refresh Everything’ campaign accounted for more than 21% of the media coverage and online buzz around Superbowl advertising.  Given that PepsiCo usually spends in the region of $30m on Superbowl advertising breaking away from the norm seems to have paid off.

How About…

  • Deliberately moving away from marketing channels used by your competitors?
  • Allocating marketing budget toward campaigns for positive social impact?

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February 2, 2010

34) Mars

Mars Logo

危 wēi  danger

In 2000, Dan Michael, then R&D director for Mars‘ M&Ms brand, and his team had the idea to make customizable M&Ms printed with a word of the customer’s choosing.  The team had experimented and found a way of printing the text but when they took the idea to senior management it was met with some concern, mainly because no marketing plan or consumer feedback existed.  They may have also feared that allowing Michael and his team to pursue the opportunity would distract them from business as usual and the proposed direct sales approach might alienate Mars’ largest retailers.

机 jī opportunity

Unperturbed, Michael’s team of 12 entered the innovation into a recently launched Mars initiative called Pioneer Week.  The concept won and the team received a modest budget with specific targets attached – building a production line within 90 days and marketing the innovation to all of Mars’ 60,000 employees (bypassing many of Mars’ conventional procedures which would have slowed the process at best).  The potential became self-evident – the team received orders for 800 pounds of custom-printed white M&Ms on the first day (the only option offered initially).  The team also solicited feedback as to why purchases had been made and used the trial to experiment with pricing.  The initiative was subsequently rolled out through a small link on the M&Ms public website (with no additional marketing) with continued success (and learning by the team).  In 2006 the trial was formally launched as Mars Direct and it is estimated that shortly thereafter ‘sales surpassed $10m and continued to accelerate’.

How about…

  • Allowing teams to initially develop ideas in Skunkworks (a small group of people given a high degree of autonomy and unhampered by bureaucracy)?
  • Inviting teams to initially market a simple version of new products and services to your own employees or your partners’ employees to assess interest and learn?
  • Adopting a ‘discovery-driven’ approach to investigating new business ideas, minimizing investment and maximizing learning?

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Source: BusinessWeek article here

January 26, 2010

32) Kegg Farms

keggfarms_logo_1

危 wēi  danger

Delhi-based chicken producer, Kegg Farms was founded by Vinod Kapur in 1967.  Kapur had realised that the Indian poultry sector lagged behind western markets in its adoption of genetic breeding, accordingly he began breeding birds specifically for the Indian urban market.    The company’s chicken was particularly successful due to its resilience and egg productivity.  However, the company’s solid economics were threatened in 1990 when industrial and foreign trade policies were liberalized, enabling foreign competitors to enter the market for the first time – would Kegg Farms be able to compete with the better-financed global firms?

机 jī opportunity

Kapur rightly predicted that the foreign entrants would focus on the attractive urban markets and switched his focus to the rural market – a tougher proposition because of the harsher environment and lack of infrastructure.  He overcame these challenges by breeding a new bird, the ‘Kuroiler’ which was faster growing, laid eggs more frequently and was capable of scavenging for its food.  He also catalysed the creation of a completely new supply chain by empowering entrepreneurs to take on the required roles – Keg Farms now supplies to 1,500 entrepreneur-owned ‘mother units’ across India which in turn supply to villages through vendors on cycles.  Finally, rural villagers, frequently women, supplement their income by selling eggs or the birds for meat (a liquid asset for when they require money urgently). As of November 2006, Kegg Farms was supplying chicks to about 4 million poor villagers, generating incomes for 700,000 households.

how about…

  • Scenario-planning for potential legislation changes?
  • Where no economic supply chain exists, catalysing the growth of your own through entrepreneurship?

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