TribalWorks

I found it quite interesting that PepsiCo, which has been hit by the rising US dollars and lagging sales will refocus its spending from alternative drinks back to carbonated soft drinks (CSD).

PepsiCo announced Friday that it would renew its focus on carbonated soft drinks with a marketing campaign to be launched in 2009. That would be a reversal of its strategy to move away from soda and toward more expensive alternatives, such as sparkling juice, energy drinks and ready-to-drink teas.

Mr. Goodman said the company had been planning the campaign over the last several months as a response to the consistent declines in sales volume in the U.S.

I find this interesting because for years now PepsiCo has invested heavily in ‘Better For You’ products and promoting their Smart Spot initiative. 

The main reason for this shift seems to be economics.

“We’re looking at re-engaging consumers, keeping the ones we have and making sure we’re getting additional consumers into the fold,” Mr. Goodman said, adding that a lot of carbonated soft drinks “are very affordable.”

I am not sure exactly how they will allocate their money.  But from a consumer perspective, they will see more TV spots, in-store promotions and sponsorships on the less healthy CSD. Though this move may provide some short term benefits, this could potentially undo years of work trying to change the image of PepsiCo as a supplier of healthier products.

Yum Brands Inc. announced that it will posting nutritional information on menu boards in its corporate owned stores.  Yum Brands owns the KFC, Taco Bell, Long John Silver’s, Pizza Hut and A&W All-American Food brands.  According to company spokesman Jonathan Blum:

“We believe this is the right leadership role…to be providing more information so consumers can make better-informed purchase decisions about the food they eat,”

 This move gained some praise:

Michael Jacobson, executive director of the Center for Science in the Public Interest, called it a groundbreaking announcement that is “fabulous news for health-conscious consumers.”

However, from a consumer standpoint, I think Yum Brands only stands to lose.  As you can see from KFC’s menu, there is not too much one would consider light.  Not only that, but I don’t think this fact is surprising at all to anyone.

Where is the benefit to Yum’s shareholders?  It is highly unlikely that the health focused population will begin to view any Yum Brand restaurant as a healthy alternative and thus frequent them more often.

The people who go to these restaurants are typically those who know that the food served isn’t the most healthy.  As I blogged earlier in my New York Fries post, there is an overemphasis on being healthy, when a good segment of the population wants to have something unhealthy once and a while. 

By seemingly caving to the healthy living trend, Yum Brands may alienate its existing tribe.  Seeing the calorie count next to the menu may make patrons feel guilty, forcing them to feed their chicken drumstick vices elsewhere.

According to this company blog, British Airways launched Metrotwin, a social networking site, in July 2008.  As of yet, they are still in the beta phase.

The concept of Metrotwin is as follows:

The online community provides expert recommendations on the best restaurants bars, shops, neighbourhoods and other places in both cities.

In addition, it helps users navigate the vast amount of internet information about the two cities and find the best content quickly.

It enables members to review, rate, save, create profiles, suggest ‘twins’, follow other members’ recommendations and make their own maps and lists.

The network also provides Amazon.com-style personalised recommendations based on user behaviour, and gives every place a score out of 100, which changes dynamically, based on user behaviour.

There are several issues I have with this: 

• I am not quite sure who they are targeting.  Will the membership base consist of (note: as of their Sept 13th blog post, they were planning on sending 4,000 invites out):
  • People who travel the NY-London route frequently?
  • Residents of NY/London who don’t fly often but know their restaurants and bars well?
  • Business travellers?  Tourists?
• What is the connecting thread between the people who will form this community?
  • The love of travel?
  • The love of good food? 
  • A sense of adventure to try new things?
• How much better is this site than other sources with the same information?
  • Network of friends
  • Restaurant guides
  • City guides
  • Other social networking sites

I still fail to see the value proposition in this venture - I think this is more a case of ‘Social networking is cool!  We need a social networking site!’ rather than a well thought out strategic decision.  But perhaps in a few weeks/months when the site is fully operational, I may have a different opinion.

New York Fries, which I learned today is Canadian and has no locations in the US, has launched a new campaign targeting women

The new effort from Toronto-based New York Fries charts a novel course for fast food, targeting women ages 25 to 49 via ads in magazines like Chatelaine, Hello!, Flare, Canadian Living, People, Style at Home and Canadian House & Home.

The campaign, dubbed “Real Fries in a Fake World,” aims to establish the authenticity of New York Fries ingredients. In the creative, produced by Toronto-based Zig - New York Fries’ AOR for five years - real potatoes are portrayed among fake goodies.

The commonly held view is that women are becoming more health cautious so it is certainly very gutsy for them to be actively targeting women.  Although, I have a feeling that this may actually work and be a successful campaign.

It is too common for companies to go with the prevailing trend of the day.  The most recent popular trends companies are jumping on are ‘Being Green’ and ‘Healthy Lifestyles’.  Too often companies do not think about the people who do not fully buy into these trends - the anti-tribe.  Sure people want to be environmentally cautious, but they also don’t always want to walk half a block to pick up a jug of milk.  People want to be healthy, but they enjoy the occasional chocolate bar or cheeseburger.  This leaves a gap in the number of companies addressing a particular need or desire.  In this case, the NY Fries ads will probably be the only ones in those magazines advertsing an unhealthy snack - thus getting people’s attention.

Sure fires are not very healthy.  But so what?  Enough people tell them what to eat and how to look.  Many women may find it refreshing that NY Fries connects with their inner self who really wants a cup of fries every now and then.

Ever since Facebook decided to move to their new layout, users have been begging Facebook to shift back to the old layout or at the very least allow users the choice.  Numerous groups have started to protest this, including one purported to be encouraged by Marc Zomberg, the founder of Facebook (of course, I doubt Marc had anything to do with it.  Especially since his name is Mark Zuckerberg [Thanks Sumit for the heads-up]).

At the time of this posting, here are just a few of the Facebook groups and the member count:

• IF 10 MILLION JOIN MARC ZOMBERG WILL BRING BACK THE OLD FACEBOOK!:  971,354
• 1 000 000+ to bring back old facebook:  371,769
• I PREFER THE OLD FACEBOOK:  308,568
• Please Keep the Old Facebook.  The New Version is A Disaster:  474,965 

Those we just the ones I found with 100,000+ members.  There seem to be dozen more groups with 10-100,000 members and many more with fewer than 10,000.  Regardless, there seems to be a very strong contingent of users who are upset with Facebook’s move. 

This is a good example whereby the Facebook tribe pushes back on the company that ‘built’ it.  I breifly mentioned in yesterday’s post about how tribes sometimes turn on the companies that ‘created’ them.

It is ironic how Facebook’s own tools and purpose are now working against them.  Essentially, the created the condition for this new anti-tribe to nucleate and grow rapidly.

There is no shortage of angst many feel towards Microsoft for essentially cornering the PC market through what many perceive to be ‘not cool’ business tactics.  However, when I read this blog post that alleges that Apple rejected a mail app from being listed on their App Store, I couldn’t help but think that this was ‘not cool’.  The developer explains:

I submitted my application on July 17th. On August 29th I finally heard back from Apple:

… Your application duplicates the functionality of the built-in iPhone application Mail without providing sufficient differentiation or added functionality, which will lead to user confusion. …

This is an interesting claim since although handing email, my app is simply directly loading and showing Gmail inside of an application. How you can confuse Gmail with Mail.app I’m not sure.

Now, I do not know the whole story, I am just going by what was posted by the developer of the application.  Assuming this is true, this leads me to one of the following conclusions:

1. Apple just made up an excuse not to allow any competition to its built in iPhone app.
   • If this is the case, then Apple should take a lesson from Microsoft’s experience .  After all, many Apple product and brand lovers are people who were upset at Microsoft for forcing them to use certain applications (i.e. Internet Explorer, MS Office, etc).  If Apple thinks competition is good, then prove it.
2. Apple genuinely believes that this application is not that much different and thus, does not feel it deserves a spot in the App Store.
   • If this is the case, then Apple should remember its brand promise.  Apple seems to be all about choice.  Why else would they have dozens of different colours and styles for their products?  If this product truly is not different, then it will not sell.  But as long as the application functions the way it supposed to, Apple should let the consumer decide whether or not to buy it.

Generally, tribes are not too forgiving when companies stray too far from the perceived brand promise.  We have looked at several cases where the tribe turns on tribal leaders or even the company that ‘built’ the tribe (we’ll blog about these later).  Either way, I think the developer has a point when he says:

 If you’re going to have rules about this, enforce them across the board. The number of shitty apps in the store is off the charts and yet mine that actually works is getting blocked. 

It will be interesting to see how this turns out.

WSJ is launching a new social networking site targeted towards business executives.  This will essentially be like Facebook but less fun.  Unlike business social networking site LinkedIn which is free, this site will only be accessible to WSJ paying subscribers.

The new Journal Community is coming Tuesday as part of the site’s first major revision since 2002. There, paying subscribers create personal profile pages with their real names, job details, interests and photo, much as users can at Facebook and the professional-networking site LinkedIn.

Community members will be able to comment on individual stories, create discussion groups on specific topics and ask one another for advice on such topics as starting small businesses or finding a place to take clients during a business trip, say, in Prague.

The Journal’s online audience has been growing fast, and nonpaying visitors make up the lion’s share. WSJ.com has 4.7 million visitors in July, nearly twice July 2007’s total of 2.4 million, according to comScore Inc. Only about 5 per cent of the site’s users are paying subscribers, the Journal said.

Starting a social networking site today is very difficult, but with a decent sized subscriber base in place, they may have a shot.  WSJ is banking on their sophisticated member base to distinguish themselves from other sites.  Furthermore, they want to ensure the high quality of conversations and discussions.

WSJ.com hopes to increase the quality of discussions by insisting that users post over their real names — as verified against billing and subscription information. Other social networks that ask for real names don’t have good ways to verify them, and news sites that allow pseudonyms have found discussions often degenerate into vicious personal attacks.

I suspect that many potential members of the WSJ site are already on LinkedIn.  Thus, it will be necessary for WSJ to create an experience that members can’t find elsewhere.  I think that WSJ is on the right track by creating a community where there is less noise and using the wight of a global media brand. 

WSJ would be wise to develop or add features that will allow the organic growth of different tribes within its subscriber base.

Best Buy put in a bid to buy online music retailer Napster.  According to the article.

Best Buy said it will pay $2.65 per share, nearly double the amount of Friday’s closing price.

Included in the deal is approximately $67-million in cash and short-term investments held by Napster, meaning the net price of the deal would be $54-million, the companies said.

The companies said the proposed acquisition includes Napster’s approximately 700,000 subscribers, its Web-based customer service and mobile capabilities.

One has to think what is the benefit to Best Buy and its shareholders.  What is so unique about Napster that it will bring about an increase in profits to Best Buy?  Are Best Buy consumers going to all of a sudden choose a Sony Walkman MP3 Player instead of an iPod because Best Buy may throw in 10 free downloads on Napster?  In a previous post we talked about how Popcuts.comuses a unique hook to get people to sign up with them and focused on building up tribes around musicians.  There is nothing truly unique about Napster - that’s why iTunes has millions of subscribers and Napster doesn’t.

Electronic Arts has scrapped the hostile take-over bid of Take Two Interactive.  Many suspected that EA’s main interest was in Take Two’s Grand Theft Auto franchise which is one of the most successful gaming series ever. 

Today’s decision to not pursue the bid is good news for fans of the NBA and NHL.  EA Sports (a division of EA) and 2K Sports (a division of Take Two) annually produce an NBA and NHL videogame title.  Previously, both companies produced versions of an NFL and MLB game.  However, EA secured an exclusive NFL license which prompted 2K Sports to secure an exclusive MLB license. 

The biggest losers of these exclusive agreements were the fans of the respective leagues and videogamers in general who witnessed a decline in the perceived quality of the exclusive titles.  Members of the gaming community were not shy at voicing their displeasure of the lack of attention developers were putting towards games.  This decline led many individuals to feel less connected with the league in general - leaving way for these fans to seek alternate forms of entertainment.  If the take-over bid took place, then there would no doubt be only one MLB and one NBA game produced annually.

Sports leagues should consider the impact exclusive agreements have on the tribe.  Long term financial success for the league means more than getting more licensing dollars now.  It means extending the lifetime value of each fan.  Signing exclusive video game contracts may not be consistent with this goal.

Leveraging its extensive install base, Apple is pushing sales of video games on its Touch and iPhone products through its online App Store.

Many industry think this will change the portable gaming market:

“They’ve done a great job of providing not only a great piece of hardware, but also a great consumer shopping experience,” said Travis Boatman, a vice-president in Electronic Arts Inc.’s mobile division. “The DS and the PSP are excellent game machines, but … where [Apple's products] really shine is their strength in the digital distribution experience for consumers.”

“They’re targeting a new demographic, which is awesome,” said Andrew Ayre, chief executive officer of Other Ocean Group Inc., the Prince Edward Island game development studio that created Super Monkey Ball for the iPhone.

“From a development standpoint, it’s very easy and straightforward to develop for and certainly the graphics and the features such as the touch screen and the accelerometer are pretty unique,” he said.

However, one line in the article strikes me as particularly interesting:

Apple’s devices will prove to be a greater threat to the PSP than the DS, since Sony’s device is marketed as a multimedia product aimed at an older demographic it shares with the iPhone and iPod Touch.

I am not sure why the author thinks this.  People who buy PSPs do so for the near PlayStation 2 quality of graphics and sound for games.  Sure the device can play music and movies but very few buy it for this purpose.  Similarly, people who buy an iPod or iPhone do so for its music, video and communications capabilities first.  This is not to say people who have iPhones and iPod Touches will not buy games, but I doubt would be PSP owners will rush out instead to get an Apple device to play games. 

In my opinion, PSP gamers form a different tribe than Apple device gamers.