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brand challenges

Crocs Hopes to Float Some Sales with Help From Furry Friend Boo

Posted by Mark J. Miller on November 14, 2013 07:47 PM

It has been some time since Crocs ruled the footwear industry. Back in 2007, the brand of rubbery footwear was valued at around $5 billion, but it has steadily fallen since, now sitting somewhere around $1.17 billion.

With sales continuing to fall and profits taking a nose dive, the brand is reportedly seeking ideas to take the publicly-traded company private, the Wall Street Journal reports. "The company's board has invited a small group of private-equity firms to present their ideas for a buyout," the paper notes, but the move by no means is a guarantee that the brand will retreat from the public markets. 

More than 200 billion of the brand's shoes have been sold in 90 countries since its inception in 2002, and if Bloomberg has anything to say about it, that may be the root of Crocs' problems. Since the fad's peak in 2007, the brand has been "hurt by competition from knockoffs as well as the decision to sell the clogs—now called Crocs Classic—everywhere, including in gas stations."Continue reading...

brand challenges

Third Model S Fire Draws Attention from Major Auto Safety Figures

Posted by Dale Buss on November 8, 2013 03:37 PM

Elon Musk, meet Clarence Ditlow. The CEO of Tesla now has to cope with the most legendary auto-safety gadfly in US history, because Ditlow doesn't like the fact that three Tesla Model S fires now have occurred in the short space of just six weeks.

So Ditlow, a former Naderite and executive director of the Center for Auto Safety, wants to see the federal government investigate why the Model S seems to have a soft underbelly. “It appears there’s inadequate shielding on the bottom of these vehicles,” Ditlow told Bloomberg. "Road debris is a known hazard to the undercarriage of vehicles.”

And if Musk doesn't wrap his exquisite brain around this problem quickly, the trio of fires could end up proving big trouble for the Tesla brand and its $70,000 Model S. On Thursday, Tesla shareholders—who already were concerned about disappointing third-quarter results from the company—knocked more than 7 percent off the company's market value.Continue reading...

brand challenges

Investors Squirm as Apple Faces Today's Realities, Tomorrow's Questions

Posted by Dale Buss on October 29, 2013 11:07 AM

Even Apple is becoming vulnerable to the things that afflict most other companies. Its profits and margins slid despite selling 33.8 million iPhones in its September quarter, and the tech icon signaled a more challenging than usual holiday selling season ahead as well as slower going in China.

Apple stock slid after CEO Tim Cook on Monday outlined what Reuters called "unremarkable quarterly numbers" that prompted some disappointed investors to cash in on the stock. Apple has slid overall by more than 10 percent in the last year as concerns have grown about everything from its current slate of new products—such as the two new iPhones and iPads—to what it might or might not have up its sleeve for the future.

The company's main products, the iPhone and iPad, have been under increasing competitive pressure from rivals including Samsung and Amazon that sell cheaper devices that run on versions of Google's widespread Android operating system, USA Today noted. Even Nokia is reporting record Lumia sales, while BlackBerry this week saw a renewed sense of hope after its free BBM messaging app netted over 20 million downloads in its first week. All of that "has Wall Street scouring Apple's quarterly results for any sign the company is dropping prices at the expense of profit margins."Continue reading...

brand challenges

Post-Recall, Chobani Touts All-Natural Greek Yogurt Quality in New Campaign

Posted by Dale Buss on October 25, 2013 05:37 PM

Chobani was reticent to issue an official recall of moldy yogurt two months ago. But it's being aggressive about launching a new advertising campaign touting the quality of its Greek yogurt as it looks to bounce back from a round of bad PR.

It's a different game for Chobani now than just a year ago. After nearly single-handedly creating the mass market for Greek-style yogurt in the US, Chobani is facing a suddenly formidable competitor in the segment in Dannon USA's Oikos brand, a plucky Yoplait that is trying to establish a foothold with its own Greek brand, and now a reputation sullied by Chobani's own initial hesitance to warn its customers about the bad product.

The company told Advertising Age that the new campaign isn't a direct response to the recall. In any event, it debuted today with a full-page ad in USA Today that reinforces the company's "manifesto" of using "100% natural ingredients,"—a point that also driven home on its website.Continue reading...

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...

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