brand challenges

Panera's Squeeze: Menu May Be Too Big, But Not for Starbucks

Posted by Dale Buss on October 23, 2013 08:04 PM

Panera may be getting caught in a strange sort of pincers: It now offers too many menu items for its staff to serve efficiently. But its biggest new competition may be coming from Starbucks that wants to emulate Panera by greatly expanding its own menu.

For now, the bigger problem for the St. Louis-based chain is what to do about comparable-store sales that rose by only 1.7 percent during the third quarter, short of the company's expectations. Overall revenues grew by 8 percent, but CEO Ron Shaich predicted flattened sales in the fourth quarter.

Shaich identified the comp-sales problem in part as stemming from "operational friction, including capacity and throughput constraints." Translation: Panera outlets tend to have either too many menu items, or they're too complex, or there aren't enough staffers to handle the demands of preparing the food as well as the customer flow. Or all of the above.Continue reading...

brand challenges

Coach Stretches Itself Thin with Brand Extensions as Sales Continue to Fall

Posted by Barry Silverstein on October 23, 2013 04:41 PM

The brand graveyard is littered with those that have lost their way, primarily because they try to change who they are and what they stand for. As any brand marketer knows, it is exceedingly difficult to change the perception of an established brand.

Coach is a good example of that difficulty. Once renowned for its leather goods, the luxury brand has made a concerted effort this year to reinvent itself as a lifestyle brand with broader appeal beyond its signature wallets and handbags. The company has introduced an array of products, including footwear, women's apparel, jewelry, sunglasses, and watches. In an attempt to gain the attention of men, Coach even brought to market a luxury baseball glove with accompanying bat in July. (The bat has since been discontinued.) That gambit, at least, seems to be paying off, as sales of men's accessories—bags, driving gloves, and even alligator-wrapped flasks—have increased by 25 percent, according to Bloomberg Businessweek

Unfortunately, the men's line has been about the only bright spot for the company. North America same-store sales dropped nearly 7 percent in the three months to September 28, and the company said to expect a similar skid through the end of the fiscal year, which closes in June 2014. Ironically, Coach continues to move its discounted handbags at its outlet stores, which account for 60 percent of North American sales (double the sales from seven years ago), according to Quartz. Of course, that simply reinforces the fact that Coach is really a one-product brand.Continue reading...

brand challenges

As Its Woes Pile Up, It's Worth Asking: Has McDonald's Jumped the Shark?

Posted by Dale Buss on October 17, 2013 01:58 PM

Is it possible that McDonald's finally has jumped the shark? Its faltering performance has put the iconic chain in the crosshairs of securities analysts and investors lately, and even some of its own franchisees, as well as the predictable coterie of nutrition critics and low-wage-worker advocates.

"I think McDonald's has reached its apex,"said a franchisee in a new Janney Capital Markets survey of 29 McDonald's franchisees. Is he right?

Clearly the world's leading fast-feeder has been struggling for a couple of years under the leadership of CEO Don Thompson, who succeeded a very good run by the initially underestimated former CEO Jim Skinner. Same-store sales in the US and some other markets are barely staying above year-ago comparisons. And while new menu items proliferate, most of them have been for only a "limited time—such as the new Southwest Chicken Premium McWrap—and they tend to slow service.Continue reading...

brand challenges

In a Rare Public Plea, BlackBerry Assures Consumers It's Not Dead... Yet

Posted by Mark J. Miller on October 14, 2013 06:39 PM

For more than a year, consumers and analysts alike have been ready to kick dirt onto BlackBerry’s grave. The mobile company has unsuccessfully tried to launch a comeback over the last two years as it watched its smartphone market share be pulled right out from under it by the likes of Apple and Samsung, leaving the Canadian company with nearly nothing but sub-par handsets and unworthy operating systems.

After coming to terms with the fate of its consumer mobile business, BlackBerry announced that it would take up a renewed focus of its B2B business, supplying global companies with mobile phones and software—but that's if they even want them. And then, after weeks of sale rumors, the company announced that it accepted a bid from Fairfax Financial to be bought for $4.7 billion, but now, even that deal is facing challenges. 

According to Reuters, the company has “announced massive layoffs" and now sources say that competing bids for all or parts of the company have come in from Google, Cisco Systems, SAP and even the company's founders. Morgan Stanley and UBS AG are “holding off on a switch to BlackBerry 10” and Credit Suisse Group AG isn’t going to upgrade its operating system. Also, an electronics supplier to the company, Jabil Circuit, is reportedly going to stop working with the company soon, which has “raised speculation that BlackBerry will stop making phones altogether," Bloomberg notes

But BlackBerry doesn't want to just fade into the blackness.Continue reading...

brand challenges

Guess Canadian, European Regulators Don't Share the World's Love for Nestle UPDATE

Posted by Dale Buss on October 14, 2013 05:12 PM

Nestle has been tussling with locals and environmentalists in Canada for a while over the water it draws out of the ground for its bottled products during drought conditions. But now the company has dropped its appeal of permit conditions that would restrict how much water it could draw.

Nestle Waters cited costs—to it and the Ontarian taxpayer—as its reasons for dropping the appeal, according to BeverageDaily.com. Meanwhile, the unit of Nestle Group also has been getting flack for the water it bottles in British Columbia, although the issue there seems to be the fact that the water is free to Nestle Waters.

In a statement to brandchannel, Nestle Waters Canada spokesman John Challinor said:Continue reading...

brand challenges

McDonald's Promotes Reading, Healthy Eating with Happy Meal Books—But Is It Enough?

Posted by Dale Buss on October 10, 2013 04:27 PM

McDonald's certainly can't win with some critics. Its new promotion involves giving away millions of books that will advance both children's literacy and their understanding of healthy eating. But all some people see are a cynical way to sell more fast food.

Which, of course, is what McDonald's is in business to do. It'd be tough to make a mass business, employ all those workers and pay all those taxes with a trade that offered only, say, hand-made artisan sandwiches of artichokes and avocados with a chaser of kombucha.

In lieu of toys, McDonald's US plans to distribute more than 20 million paperback books inside its Happy Meals in the US during the first half of November, a gambit which could make it the country's "largest children's book publisher for the month," as Ad Age observed.

The move is "yet another effort to appease criticis who have lambasted its Happy Meals for the food quality, the licensed toys and kid-targeted marketing," noted USA Today. The brand launched a similar effort back in the UK back in January, where it received much the same criticism.Continue reading...

brand challenges

It's About Time: Musk Comes to Defense of Model S After Viral Fire Incident

Posted by Dale Buss on October 7, 2013 07:08 PM

Not surprisingly, Elon Musk himself has jumped to the forefront of how Tesla is handling fallout from last week's fire on a roadway near Seattle that consumed a Tesla Model S. The Tesla CEO and co-founder defended the car's safety in part by asserting the accident could have been much worse if the same circumstances had embroiled a conventionally powered vehicle.

It was incumbent on Musk to do something in part because of how the share price of high-flying Tesla was whacked late last week by 10 percent by news of the fiery incident in Kent, Wash., on October 1, when metal debris that had been left on the road punctured the underside of the Model S. On Monday, the stock had recovered an additional 1 percent after rising by more than 4 percent on Friday.

"The geometry of the object," that had fallen off a semi-trailer "caused a powerful lever action as it went under the car," Musk wrote in a company statement, "punching upward and impaling the Model S with a peak force on the order of 25 tons. Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse."Continue reading...

brand challenges

It Was Just One Little Incident, but Tesla Battery Fire May Smolder for Brand

Posted by Dale Buss on October 3, 2013 02:29 PM

Fire and ice seem to be the only things that can get in Tesla's way. Viral scenes of a Tesla Model S electric car that caught fire this week in Seattle likely have nicked Tesla stock and caused widespread concern about the company's future, much as the brand's battle of histrionics with the New York Times earlier this year over the car's cold-weather performance.

Tesla has only clinically explained that the fire was caused by the "direct impact of a large metallic object to one of the 16 modules within the Model S battery pack," according to the New York Times. But it noted that the fire was "contained to a small section in the front of the vehicle." The driver reportedly escaped without harm, and emergency responders extinguished the fire eventually.

Nevertheless, this is the kind of issue that even the high-flying Tesla can't afford to let get out of hand. Lithium-ion-battery fire incidents whacked GM's Chevrolet Volt nearly two years ago and were the basis of concerns about the flight-worthiness of Boeing's Dreamliner airplane.Continue reading...

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