Browsed by
Author: Giles Lury

Lessons from past crises – looking for opportunities, I’ll drink to that

Lessons from past crises – looking for opportunities, I’ll drink to that

E &J

This week’s story is about a family owned business that is now the leading provider of Californian wines – E & J Gallo. The story is about how the brand followed a simple but effective strategy at the end of the Great Depression (and the end of Prohibition) and then drove further growth after WWII.

While Californian wines really rose to international prominence in the 1970s and 80s, the history of wine in the region goes back much further. Californian wines had been successful in international competitions as far back as the early 1900s. The double whammy of Prohibition, which was introduced in January 1920, coupled with the Great Depression (which also started in 1929), meant the once thriving industry went into a steep, almost terminal decline. Vines were uprooted across thousands of acres and cash crops such as apples and walnuts were planted in their stead.

When Prohibition was repealed on December 5, 1933, only 160 of California’s original 700 wineries were intact, and taxation and legislation had decimated domestic wine consumption.

It is at this point that Ernest and Julio Gallo, then aged 24 and 23 years enter our story. Both their parents had recently died, and they needed a plan. They decided to enter the wine business.

They applied for and obtained a winery license. They bought winemaking equipment on credit and leased a small Modesto warehouse for $60 a month. Some sources say that despite having worked in their father’s small vineyard when younger, they got their technical education from two pre-Prohibition wine pamphlets from the Modesto Public Library.

Perhaps even more important was that the brothers recognized that while the Great Depression was ending, money was still tight for most people. They agreed on a marketing strategy that not only reflected this but aimed to take advantage of it. They decided that they would made acceptable wine and sell it at a low price. Their aim was to build volume and gain share.

They then visited local growers, offering them a share of the profits in return for the use of their grapes.

In December 1933, Ernest had made his first sale of 6,000 gallons of wine to Pacific Wine Company, a Chicago distributor. Profit in the first year was $34,000, a sum that was immediately plowed back into the business.

E Gallo

The business grew, but it wasn’t until WWII that Ernest identified an opportunity to drive the business further faster. It was an insight that would make him renowned throughout the industry.

At the time wine was relegated to a position behind beer and hard liquor. It wasn’t the focus and priority for the people in the liquor salesforces.

At a time of uncertainty, Ernst followed his intuition and introduced the novel concept of salespeople who exclusively sold wine. He recruited a team of zealous salespeople to push Gallo products and get them high visibility on the liquor store shelves. It would prove to be a highly successful idea which was soon widely imitated by the other wine makers.

logo

Gallo had always followed a strategy of expanding into new markets only when existing markets were ‘conquered’. The new salesforce accelerated the growth and the brand was soon available nationwide. Nowadays Gallo wine and its numerous brands are available all around the world. Its portfolio runs from more economical brands to super-premium.

 

What are the implications, if any, for brands now?

Today our economy has fallen in recession, a depression that many analysts are saying could be deeper than the Great Depression. It seems highly likely that value-for-money, economic offerings will do well. (The earlier lesson of the original Mini is another example of tailoring your offer down). What can you do in this sector of the market by broadening your portfolio and changing the focus of your marketing efforts?

The second implication is to try and use the time now to look for opportunities, to try and take a fresh look at your market and address some of the issues and barriers to growth – and if and when you do find new ideas, I’ll raise a glass of Gallo wine to you.

 

Lessons from the past – Alternative uses and novel selling strategies

Lessons from the past – Alternative uses and novel selling strategies

nurses

It is more than 100 years since the end of World War One, and it is now hard to imagine the true scale and horror of death and injuries, though recent films like 1917 have gone way in bringing it to life (and death) for a younger generation.

It was another period in history when so many relied on the heroic actions of medical staff: doctors, nurses and ancillaries. Like the current Covid-19 crisis it was also a time of shortages for doctors and nurses. In particular, during the heaviest periods of fighting, soldiers were getting wounded in such large numbers that the medics often ran out of bandages.

Also like now companies and brands stepped up and did their bit. Kimberly-Clark was one of them. It offered the army a new product of theirs, Cellucotton, a highly absorbent fluffy paper wadding product that could be used for filters in gas masks, stuffing for emergency jackets but more importantly for pads and bandages.

By a strange co-incidence the technology for it had been found during a visit to Germany by two Kimberley-Clark executives, Ernst Mahler and company president J.C. Kimberley.

Kimberly-Clark committed to selling Cellucotton to the War Department and Red Cross at cost, taking no profit whatsoever.

When Armistice day arrived and the war was finally over, Kimberly-Clark found it had partially filled orders for 750,000 lbs (over 340 tonnes) of Cellucotton and in another altruistic act Kimberly-Clark allowed these orders to be cancelled without penalty.

It left the company with a huge surplus.  Worse still, the Army also had a large surplus of Cellucotton – and they began selling it to civilian hospitals at a ridiculously low price, instantaneously killing the market for Kimberley-Clark.

The better news for Kimberley-Clark, and perhaps one small contributing factor to their generosity, was that word had got back to them about an alternative use for Cellucotton.  Not long after its first arrival at the battlefields that a completely unexpected use was found for some of the bandages.

The female nurses and the nuns tending the wounded started using it for their “Lady Days” (as periods were referred to then), it was after all five times as absorbent as cotton and so was much better and more hygienic than the pieces of rags which they had been using previously

Kimberley-Clark decided to try and market them to women as feminine hygiene pads. They were rechristened Cellunaps (cellucotton – napkins) and positioned to retailers as the first disposable sanitary napkin.

Kimberley-Clark however had to find their way over another barrier. Retailers, though seeing the potential, were worried about public sensitivity and many women were not happy to ask the mostly male assistants for them at the counters.

Sales did not go well.

Kimberley Clark decided on a new approach.

kotexad1

They changed the name to KOTEX, a meaningless word merger of c[K]Otton-like TEXture that would hopefully not reveal anything in a crowded drugstore. The second and perhaps crucial change was the introduction of counter displays so that women could buy their Kotex without talking to the clerk. At the time this was not something that every retailer immediately agreed to, but as results were soon to show it solved the problem of a product people didn’t want to really talk about, and definitely didn’t want to ask a member of the opposite sex for.

As counter and shelf displays grew so did the sales and the brand.

What are the implications, if any for brands?

At the moment when there are still shortages of so many medical essentials it is difficult to make any concrete predictions but it maybe that marketers will need their ingenuity to re-purpose hand sanitizers, PPE and even ventilators. Alternatively they may want to explore any opportunities that arise for future utilisation of their new capabilities to move into different sectors.

For example, a number of the large automotive companies  who could probably use some long-term diversification strategies might want to look at Medtech opportunities, and Dyson is another obvious candidate to do this as The James Dyson Foundation has already made significant investments to support the advancement of medical research, as well as regular donations to medical research charities.

Footnote : As Kotex sales began to grow, letters started to pour in to the company, mostly favourable but many were from women who wanted to know more about their bodies and the menstrual process. As a result Kimberly-Clark built its Education Division and began mailing out information packs, including a pamphlet called “Marjorie May’s 12th Birthday” which was initially banned in some states for being too sexually explicit.

Later they were to work with the Disney Company to create a movie called “The Story of Menstruation” which would be shown in schools and was seen by over 70 million schoolchildren – a most unlikely most-watched movie from the Disney catalogue.

Thinking, small, fast and new – Lessons form crises past

Thinking, small, fast and new – Lessons form crises past

mini

History tells us that a British constitutional crisis can be an inspiration. No, I’m not talking about Brexit but the Suez crisis.

On 29 October 1956, Israel invaded the Egyptian Sinai and began what is known as the Suez Crisis, or the Second Arab-Israeli War. The Israelis were soon joined by the British and the French. The aims for the three allied countries were to regain control of the Suez Canal and to remove Egyptian President Gamal Abdel Nasser, who had recently nationalized the canal.

As the fighting started, an international crisis developed and after a short period, a combination of political pressure and financial threats from the US, the Soviet Union and the United Nations led to a withdrawal by the three invaders.

The episode humiliated the UK and France and strengthened Nasser. The British Prime Minister, Anthony Eden, resigned.

Another side effect of the crisis had been a reduction in the supply of petrol to the UK, which in turn had led to the Government introducing petrol rationing.

It was this rationing that was the spur, the inspiration that drove the rapid development of the car we know today as the Mini.

Alexander Issigonis was a former racing driver who became a successful engineer and designer. He had worked for Humber, Austin and Morris Motors Ltd when in 1955 he was recruited by British Motor Corporation’s chairman Sir Leonard Lord, to design a new range of three cars. The XC (experimental car) code names assigned for the new cars were XC/9001, for a large comfortable car, XC/9002, for a medium-sized family car, and XC/9003, for a small-town car.

During 1956 Issigonis had concentrated on the larger two cars, going as far as producing several prototypes.

However, at the end of 1956, following the introduction of the fuel rationing that had been brought about by the Suez Crisis, Issigonis was ordered by Lord to focus on and bring the smaller car, XC/9003, to production as quickly as possible.

As early 1957, prototypes were running, and in August 1959 the car was launched as the Morris Mini Minor and the Austin Seven. (It wouldn’t be until 1961 that it would be renamed the Austin Mini, and eight more years before the Mini became a marque in its own right.

mini design 2

 

Issigonis and his team were incredibly innovative with their design, introducing a space-saving transverse engine front-wheel drive layout, which allowed 80% of the area of the car’s floorpan to be used for passengers and luggage, so helping give the car its compact size and good fuel efficiency. It was an approach that would influence a generation of car makers.

The car was an immediate and huge success and went onto become an icon of 1960s British popular culture, not least for a starring role in the 1969 film, ‘The Italian Job’.

This same speed, ingenuity and innovative thinking, the repurposing and redirecting of energies are things we are seeing at the moment in how companies respond to help the Government and the people in the midst of tis COVID crisis.

In the longer-term organizations, brands and marketers need to think how they harness these attributes to develop new products and services for a world recovering from a pandemic and facing a recession.

We need ideas that will help give employment to people made redundant or furloughed, to make profits to help repay the national debt and rebuild pension funds, not just line the pockets of the very rich.

It will however be in a big challenge as nobody really knows how the world will change and the innovations will need to take account of the needs of that other crisis – climate change.

 

 

HOW FIRE & ICE SHOWED THAT WOMEN ARE MORE THAN ‘ALL THINGS NICE’

HOW FIRE & ICE SHOWED THAT WOMEN ARE MORE THAN ‘ALL THINGS NICE’

Fire & Ice

I have written a story about Charles Revson before. It was entitled “The insightful bastard” which is explained by his self-proclamation that, “I built this business by being a bastard. I run it by being a bastard. I’ll always be a bastard, and don’t you ever try to change me” and his famous explanation of focusing on emotional benefits because “in the factory we make cosmetics; (but) in the drugstore we sell hope”.

Digging into his and the Revlon* brand’s history, there are numerous other stories but two in particular caught my eye, especially as I think they have relevance for future thinking brands in these difficult times .

The first reflects the insightfulness of Revson.

In 1933, as the Great Depression was ending, Revlon introduced colour-coordinated nail polish and lipstick.

While this might have seemed like an inopportune moment to launch a vanity business and his competitors at first called the colours ‘trashy’, Charles’ insight of the needs of women at the time was to convert into business success.

He instinctively understood that after a period where women had worn drab colors, recycling rather than buying new fashions, they wanted to feel feminine and ‘pretty’ again and so there would be a market for relatively inexpensive glamour. (“Relatively” because Revlon’s products were sold at a premium compared with traditional brands, many of which were only available in pale and transparent colours).

Their first products were nail varnishes, but the brand moved to what Charles called “Matching Lips & Tips”, introducing lipsticks to complement each of their nail-enamel shades. The idea is said to have come to him when he noticed a woman in a restaurant whose lips and nail polish didn’t match. He also realised that if women used the different shades to suit different outfits, moods, and occasions, it would expand the market…and it did.

The second story features not just Charles but Kay Daly who was a copywriter and vice-president at Norman, Craig & Kummel, the advertising agency. She would later join Revlon as Creative Director.

Together they created a concept that many believe revolutionised cosmetic advertising. They believed that there’s a little bit of bad in every good woman and. as Daly would say. every woman deserved “a little immoral support.”

That immoral support was a new shade – Fire and Ice – which they launched in the autumn of 1952.

The campaign to launch the shade featured a  two-page spread, on one side it featured model Dorian Leigh in a silver-sequinned dress and wrapped in a red cape, and on the other it featured a questionnaire with a series of questions that tried to figure out if you were either naughty or nice; fire or ice.

Questions included “Do you blush when you find yourself flirting,” or “Would you streak your hair with platinum without consulting your husband,” and if you answered yes to eight out of the 15 questions, then you were ready for the lipstick.

The aim of course was to show there was a little bit of bad in every woman, even if she was a church-going suburban wife.

The ad was a sensation; nine thousand window displays were devoted to it, every newspaper and magazine wrote about it, and every radio announcer made reference to it.

Fire and Ice quickly became Revlon’s top shade

 And the moral is people don’t always tell you want they want and need but that doesn’t mean they don’t really want it. How can you identify the things people want even when they don’t tell you?

 

Footnote: *There are two stories as to why the brand is Revlon and not Revson. The first is that he felt the ‘l’ softened it. The second was that there were three original partners in the business Charles, his brother, Joseph, and a chemist, Charles Lachman and, while they considered Revlac, it didn’t feel right. They decided to go with Revlon, the ‘l’  representing Lachman.

Top 10 books to read

Top 10 books to read

Delighted that Iconic Innovations (the Indian edition of Inspiring Innovation) has been chosen as one of top 10 books of the year for entrepreneurs on yourstory.com by Madanmohan Rao

Books of the year

 

“Inspiring – and amusing – stories of pathbreaking innovators over the centuries are shared in this book. Each innovation is profiled in just two or three pages, but what they lack in depth, they make up for in breadth and variety. Innovators get ideas from the problems they themselves face, spot trends in a range of industries, or build on earlier innovations. This has to be followed up with customer engagement, market development, and branding”

iconic innovation

Read more at: https://yourstory.com/2019/12/top-10-books-2019-entrepreneurs-innovation-startups

The Nordic connection – the 10th century Danish king and modern technology

The Nordic connection – the 10th century Danish king and modern technology

harald bluetoooth

What is the connection between a 10th Century Danish king and modern technology?

The answer starts in 20th, not the 10th Century. In 1996, three companies were ll looking to create the industry standard for a short-range radio link that could be used to connect a range of appliances.

As none were making the necessary breakthrough, the different teams started to explore the possibility of working together, and some meetings were arranged for the three companies to talk to some target customers at the same time. It soon became apparent that while they were now in the same room together, they were to paraphrase the old George Bernard Shaw quote, three companies separated by a common language. Intel would talk “Biz-RF,” Ericsson “MC-Link” and Nokia “Low Power-RF.”

This clearly didn’t help their pitch and often caused confusion. It was obvious that they needed to have and use a single name.

In December, the companies decided to create a Special Interest Group (SIG). They met in Lund, Sweden at the Ericsson plant to thrash out the final details of the open IP (intellectual property) policy which would allow them to take the best elements of each other’s approaches and put them all together.

Jim Kardach

When they turned to the discussion of the name, Jim Kardach of Intel suggested that the SIG should adopt the codename ‘Bluetooth’, until the soon to be formed marketing group would be given the task of coming up with the final name.

Kardach had chosen Bluetooth as it was the name of a 10th Century Danish king who was famous for uniting Scandinavia. The Intel engineer thought there were obvious parallels with the technology they were developing which aimed to unite the PC and cellular industries with a short-range wireless link.

Asked about where he got the inspiration from, Kardach explained that he traces it back to an earlier business trip where he and Sven Mathesson of Ericsson were presenting their technology proposal to a potential customer; Sven was pitching it as MC-Link, and Kardach pitching it as Biz-RF.

Their respective pitches were both soundly rejected. The pair set off on a pub crawl through wintery downtown Toronto.

They got talking about history and it turned out that Mathesson had just read this ‘Longships’ by Frans G. Bengtsson. In the book a couple of Danish warriors travel the world looking for adventure, and the king during the time when it was set was Harald Bluetooth.

By coincidence Kardach had recently ordered ‘The Vikings’ by Gwyn Jones. Arriving home, it was there waiting for him. He opened it and started to thumb through the pages, whereupon he saw a picture of a large runic stone, which depicted the chivalry of none other than Harald Bluetooth.

Jim runes

Kardach first thought was that it would be a good name for Nokia’s program. He even went as far as creating an image of the Runic stone where Harald held a cellphone in one hand and a notebook in the other and with the words; ‘Harald united Denmark and Norway – Harald thinks that mobile PC’s and cellular phones should seamlessly communicate.’

Presented now to this wider group, the future SIG, the name was adopted, though everyone expected it be replaced when the marketing group was formed.

This duly happened and Simon Ellis (Intel) and Anders Edlund (now with Bluetooth SIG) were appointed as joint leaders. They started working on official “names.”

As with many naming projects it would take considerable time to decide on a final recommendation and a number of alternatives would be considered along the way, not all of them real contenders. “Flirt” with its tagline “getting close, but not touching” made a long-list but went no further.

In February the final SIG contracts were being drawn up for all parties to sign but there was still no agreed name. The working name “Bluetooth” was inserted.

The official launch date was May and so the marketing group had until then to find a new name.

It came down to two top contenders – RadioWire (an Intel proposal) and PAN (for Personal Area Networking, an IBM proposal). In April the board met and voted on the name.

PAN won, 4-1 vote, a clear majority. Planning for the launch event could now proceed.

Then a week later, an emergency meeting was called. A trademark search on the word PAN came back with the disappointing news that it was a poor candidate for a trademark. There were already thousands of companies using PAN or something very similar.

Time was running short and no trademark search had been done on the backup name, Radio Wire.

The only option was to go with Bluetooth.

Despite reservations and discussions about changing it post-launch, the name Bluetooth was very well received and immediately adopted by the press. The name stuck and is still in use today.

MORAL: Naming a new brand is never easy and with the number of brand names now registered it can be dangerous to pin all your hopes on just one option.

bluetooth logo

Footnote: The origins of the naming are incorporated into the logo. It is a ‘bind rune’, merging the Younger Futhark runic letters for H and B, Harald’s initials.

Inspiration from injustice

Inspiration from injustice

It has been a while since I have posted a new general brand story. My excuse is that I’m working on two other books of brand stories at the moment which I will tell you, dear reader, about at a later date. In the meantime I hope you enjoy this one…

 

I must have written over 150 stories about the origins of brands and have been amazed at the variety of sources of the inspiration for those brands. Some were based on someone’s passion for their hobby, some have been created out of love for someone or something, and some have been the result of the creativity needed to find a better way of doing sometimes. What surprised me, however, was how many were driven by more negative experiences, like personal problems, shame, embarrassment and even anger.

I recently attended a book launch at the Taj hotel in London and perhaps not too surprisingly started to wonder about the origins of the brand. A couple of days and some research later, I’m glad I did because I can now add prejudice to my list of brand inspirations.

JNTata

Jamsetji Nusserwanji Tata came from the Parsee community in India. He had made his fortune in the cotton trade and then branched out into other associated industries like mills, hydroelectric works and a shipping line. He then moved onto numerous other businesses areas.

One day, (no-one seems to know the exact date) towards the end of the 19th century, Jamsetji Tata decided to take a friend and colleague to have lunch at the grand Watson Hotel in the fashionable part of Bombay, or Mumbai as it is now known.

He was met with a sign that read “No Indians or dogs” and he and his friend were turned away.

Spurred on by this injustice and prejudice, he decided he would build a hotel that would be the envy of every other hotel in the city; one that would attract and allow entry to Europeans, Indians and people of all races.

Jamsetji Tata duly applied for and received the necessary permissions to build a Hotel at Apollo Bunder on the Port of Bombay. He hired two architects, Sitaram Khanderao Vaidya and D. N. Mirza, to design what would become the Taj Palace.

Unfortunately, Vaidya died before the plans were completed and the hotel built. Tata was forced to find a new architect and in a fitting coincidence chose W. A. Chambers, who had earlier designed the exclusive Watson Hotel. They in turn worked with F. W. Steven, who designed the Victoria Terminus, now known as the Chattrapati Shivaji Terminus and you can still see the influence that had on the final design of the hotel.

taj_firstharbourlandmark

With its aim to attract all people from around the world, the final design incorporates elements of many architectural styles including Indo-Saracenic, Victorian and Gothic. It has Romanesque details, Edwardian touches on the roof and windows like mashrabiya casements of Arab houses.

While the hotel was being built, Tata visited London, Dusseldorf, Berlin and Paris and handpicked the furnishing, fabrics and lighting fixtures. In Paris he attended the opening of the Eiffel Tower and was so inspired by it that he ordered 10 spun iron pillars, which still hold up the ceiling of the ballroom today.

The hotel opened on 16 December 1903.

Sadly, Jamshetji Tata was not able to enjoy the hotel, nor see its success, as he passed away in 1904.

As of 2018, Taj hotel group comprises a total of 100 hotels and hotel-resorts, with 84 across India and 16 in other countries, including Bhutan, Malaysia, Maldives, Nepal, South Africa, Sri Lanka, UAE, UK, USA and Zambia. Their doors are open to everyone, no matter what their colour, creed or nationality.

taj

MORAL: Brands can be a force for good and help address injustice. Can your brand do more than operate successfully in its marketplace?

Once upon eight times

Once upon eight times

 

story spine

Whilst many people will have been told or taught the above classic ‘Story Spine’, it is not the full story.

There are a number of variations which writers and speakers can use to great effect. I can’t claim the credit for identifying them but knowing how much they have helped me, I thought you dear reader (and writer)  might find them interesting and useful too

Read all about them here

www.sparkol.com/en/Blog/8-Classic-storytelling-techniques-for-engaging-presentations

alternative stroy structures