Dollar General goes after higher earners – Nashville Business Journal


Dollar General goes after higher earners – Nashville Business Journal.

Targeting those making $75,000 a year and who want consumables…

The question is, will this be a brilliant move to expand market share or will it lead to a diluting of Dollar General’s brand by moving away from its core mission of selling cheap goods to super-discount shoppers?

via Dollar General goes after higher earners – Nashville Business Journal.

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Mountain Dew: From hillbillies to hip-hop


Here’s a fascinating read from Business Week about Mountain Dew.

PepsiCo understandably wants to create a thirst for its Mountain Dew brand in a greater market. The sugary drink has roots in the hillbilly culture of the Southeast and moonshine liquor, which was nicknamed Mountain Dew. Now, PepsiCo has enlisted hip-hop artist Lil Wayne and street skateboarder Paul Rodriguez to entice potential customers age 18 to 24 to pop the top on their product.

I won’t go into the whole story here, since you can read it on Business Week’s site, but this is a smart move for several reasons. Why not try to broaden your product’s appeal? The target age audience is increasingly diverse and is often located in urban areas outside the Southeast. Coca-Cola’s Sprite and Fanta have gained market share in that age bracket.

I love Mountain Dew and Sprite both, but in a nod to PepsiCo’s brilliant marketing move, I’ll choose a Mountain Dew the next time I need a refreshing drink, and I’ll think of hillbillies and hip-hop while I do so.

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Finding the right bookshelf for the Nook


What will the Nook’s future be?

Barnes & Noble’s Nook e-readers face fierce competition from the Kindle and iPad. B&N has tripled its advertising since 2009, adding to the huge development costs of the Nook, The Wall Street Journal reports. B&N’s EBITDA (earnings before interest, taxes, depreciation and amortization) have fallen to $163 million in the year ending April 2011 from $281 million the previous year.

One of the leaders of a minority shareholder firm recently said competing with Amazon and Apple is a “big-boy game” and that B&N may need partners to play that game. B&N, meanwhile, said it is seeking partners for overseas ventures.

The Wall Street Journal reports that the bookseller could possibly either sell a minority stake in the Nook line, setting up a separate management team, or sell the Nook brand outright.

I believe it would be short-sighted to sell the Nook brand outright. Barnes & Noble could very effectively use its brick and mortar stores – the ones that survive in the years ahead – to promote the Nook e-reader and its accessories. Bookstore customers are good candidates to buy e-readers. And Barnes & Noble and Nook can be co-promoted together if the corporation continues to own both brands. You lose that cohesiveness if Nook gets sold; even if a tech behemoth like Microsoft or Google buys the Nook, the new owner has lost that connection to a traditional bookstore and its customers.

Is Apple all that?


This report by Douglas A. McIntyre with 24/7 Wall St makes a case for Apple (AAPL) as the second-most valuable corporation in America, after Exxon Mobil, in terms of market value.

Apple posted record revenue of $20.34 billion in the third quarter of 2009. Revenue was up 66 percent from the same quarter a year ago. The total value of Exxon Mobil’s shares creates a market cap of $362 billion, while Apple’s is $284 billion. That’s ahead of such giants as Wal-Mart, the world’s largest retailer.

McIntyre cites analysts, who point to Apple’s rapid growth, which he says is unmatched by any other major American corporation. With hot-selling iPhones, iPads and Mac computers, the analysts may be right.

 

But I can’t help thinking of the changing taste of consumers. Exxon deals with oil, perhaps the world’s most valuable commodity, while Wal-Mart of course sells such a large diversity of products and has a reputation of selling for less. Apple has done well to move beyond simply selling computers. Yes, Apple’s products are fashionable. But they are only into one segment of the economy: consumer electronics. Changing consumer preferences or bad publicity (such as the iPhone antenna problem) or the eventual loss of magnate Steve Jobs could upset the Apple cart. So I would urge caution when looking at Apple as an investment. What goes up can — and often will — go down.

 

Observations on brands in social media


I have only a few minutes to talk about this interesting read on social media and branding on Fast Company, so here are some observations:

Dunkin’ Donuts: People trust other real people and connect with them more than they do to talking animals or celebrities. And unless you’re trying to set up your brand as the Rolex of your industry (the superior product differentiation strategy), it may not make sense to say how superior your product is – show people, don’t tell them.

Clinique: I agree with the observation on Clinique’s “how-to” videos being more socially relevant than Axe’s frat-house humor. There’s a good reason “how-to” books are consistently big sellers: Consumers are looking for useful information on “how to” do many things. Take a look at your product or service and ask yourself what sort of “how-to” tutorial you can offer to build value to your audience.

Gimmicks: There may be a time and a place for gimmicks, but they just are not effective in the long-term. Find creative ways to play up the unique features of your product – fresh, never-frozen burger patties are a great selling point for a burger chain because of the taste and quality factors (ask Five Guys Burgers and Fries execs why their burgers outperformed McDonald’s and other, larger chains in a recent survey).

Finally, the article makes a good point. Social networking isn’t for everyone (Gillette’s campaign on shaving the “nether region” sends chills down my spine). Just because you can do something, doesn’t mean you should.

The brilliance of pink rope


My girlfriend’s car was rear-ended the other day. She and the other driver were alright, fortunately. But, her car’s bumper was twisted out of place, which prevents the trunk from closing.

We went to Lowe’s Home Improvement to buy rope so I could tie down the trunk until the insurance companies work things out and send her car to the body shop. While I knew, intellectually, that home improvement stores had taken a number of steps some time back to market to female consumers, this visit was my first personal experience with the phenomenon. Lowe’s and its competitors began offering workshops for women-only as well as retooling their inventories to include such items as tools with extra cushioning on the grips.

Not to mention carrying rope in more colors than just white or brown. I was about to walk off with the white rope when my girlfriend grabbed the pink product. I take my hat off to the manufacturer of the bright pink product for taking advantage of product differentiation so successfully.

Lowe’s has also become a master at planning product placement to move more inventory, according to BaselineMag.com. The “planograms,” or data-driven shelf plans, influence where is item is placed on shelves. The plan is created through the use of analytical software to determine which products make the most profit and what location gets the best results.  Major suppliers have access to Lowe’s store layouts. Baseline cites a retail expert who credits planograms with helping Lowe’s target women through attention to atmosphere and aesthetics.

It’s working so far with my girlfriend. …

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