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Friday
Mar092007

Mom My Ride

We spent a little time this week with our friends at Optiem talking about viral marketing, specifically how video fits into the mix. As I was reviewing some other online marketing stuff this evening, I came across this post on the Mplans Blog. It's about a parody of the MTV program, Pimp My Ride. The original is not exactly my kind of show, but this version is hysterical. While it doesn't exactly make me want to run out and buy some Zima, it definitely the smartest Zima spot I've ever seen.

Tuesday
Mar062007

Gurus Chime in on Starbucks

AdAge had a story yesterday with snippits of advice for Starbucks following memogate. Lots of good points here, but these strike me as being more right:

Larry Wu, VP-consumer strategist food and beverage, Iconoculture (A former director of research and development for Starbucks) -- "It used to be about great service, knowledgeable expertise and love of coffee. Now it's about love of profit, margin and growth." Starbucks "should pull back on the food and make coffee the core again."

Seth Godin, author of "Small is the New Big" -- He said the bigger question is: "Should Starbucks be willing to take a short-term stock and market-share hit in order to return to its authenticity?" When it comes to brands, "shareholders, in the long run, are always wrong," he said, adding: "In order to be big, they have to give up stuff."

And my absolute favorite:

David Aaker, VP of Prophet and professor of marketing at University of California at Berkeley's Haas School of Business --  "This is a portfolio problem. Once you get into supermarkets, it's not easy to pull back." But he said it's possible. "One option would be to create a sub-brand for an upscale Starbucks." It's an idea much like the Hallmark Gold Crown concept, where the chain could create an experience around the original Starbucks for customers who want that level of service vs. the grab-and-go business the company has developed.

This last statement is virtually the same point I made in my post: "I think the biggest issue is that they have gone from 1,000 to 13,000 stores in 10 years. Widespread availability, by definition, leads to reduced uniqueness and reduced uniqueness amounts to commoditization." It's almost to the point that mass equals commiditization these days. Feel free to disagree.

Monday
Mar052007

Disney on Broadway Sweepstakes

Step2 just started another sweepstakes in conjunction with Wondertime magazine. Wondertime is a great new parenting magazine owned by Disney. If you're not related to me, you can enter for a chance to win an all-expense paid trip for four to New York City to see two Broadway shows. We provided the runner-up prizes.

Sunday
Mar042007

Jack's Latest Quote

"It was like a bomb going off in the toilet water."

He's seven. You figure it out. Psychotic.

Sunday
Mar042007

The Million Dollar Kid

This weekend's Wall Street Journal includes a piece about how much people spend on their children. They only focus on those in the top third income bracket, so as one would expect, there is some pretty shocking stuff here. The USDA estimates that the total cost to raise a child born in 2005 to these top earners is $279,450. I was unable to find any data this recent on the USDA web site, but there is some corroborative information on MSN Money. The WSJ says that the richest of the rich, so-called "Platinum" parents, spend up to $1.6 million to raise a child. Yikes!


Some of the extreme spending examples are incredible: $800 strollers, $1,000 birthday parties, etc. Other tidbits:

  • Half of American teenagers own an MP3 player, and they each spend an average of $361 annually on iTunes downloads
  • One in ten children now attends a private school
  • The average domestic one-week vacation costs $1,830, and the average trip to Disney World is over $5,000 (uh... I think we'll skip that, thank you)
  • Nearly two out of three teenagers has a cell phone
  • Average cost of a 4-week summer camp is $3,000

After fifteen years in the toy industry, I am no longer surprised at the lengths to which some parents will go to give their children a "complete" experience or a competitive "edge." I've encountered my share of these parents over the years. In some cases I believe it actually reaches the point of child worship. Remarkably, though, most of the kids who don't have all these "advantages" seem to turn out just fine or better than the ones who "have it all."

To the immediate north of us is a very wealthy community, and just to our south is one that is decidedly middle class. Our city has people who would fit comfortably in either of these towns and a lot of people in between. Economically, we're a pretty heterogeneous community.

As I look at my kids' friends and get to know their parents, things generally seem pretty well balanced here. There are overactive over achievers and couch potato underachievers, and there seem to be some at each end of the economic spectrum of our community.

There's a Cost of Raising a Child Calculator on BabyCenter. It only goes back as far as birth year 1999, which is when Jack was born. Including college, it estimates that it will cost us $466,828 to raise Jack. They break the expenses down by category, it's actually somewhat believable. There are no splurge items listed.

Saturday
Mar032007

Low-Tech Toys

A post over at Stroller Derby talks about this year's hot toys from Toy Fair. While none of ours are mentioned, the refrain is right up our alley. This quote says it all:

Toys, especially the non-Bratz, non-Barbie toys, can give you a renewed sense of hope about the future...

The comments from Rachel and Liza are right on the money too. The same was true for our kids when they were toddlers.

Friday
Feb232007

The $4 Cup of Coffee is Now a Commodity

The Wall Street Journal reported today on an internal memo from Starbucks. In the memo, Starbucks chairman Howard Schultz stated, among other things:

"Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead (sic) to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand," Mr. Schultz wrote in the memo.

"Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces," he wrote.

Schultz goes on to explain that some of the efficiency and standardization initiatives that Starbucks has pursued have resulted in the loss of the company's edge. They have diluted what makes the Starbucks experience special and distinctive. Indeed those factors may contribute to commoditization. However, I think the biggest issue is that they have gone from 1,000 to 13,000 stores in 10 years. Widespread availability, by definition, leads to reduced uniqueness and reduced uniqueness amounts to commoditization.

Upon reading this I immediately thought of a Stores.org webinar I attended last December called The Future Ain't What it Used to Be. It was led by Jim Dion, a retailing consultant. Jim talked about the megatrends in retailing today including what he calls "planned scarcity." Basically, his belief is that today's consumers crave products and experiences that are not  widely available. They want to feel special, not like one of the crowd.

I don't want to get too hung up on the semantics here. Schultz may really be alluding to the fact that Starbucks growth is going to slow down because their product just isn't as good as the hype built it up to be. Consumer Reports told us last month that McDonald's, not Starbucks, has the best coffee. And Dunkin' Donuts has succeeded somewhat at creating an anti-Starbucks persona with which many consumers identify.

The folks over at McDonalds must be chuckling. Ultimately, becoming a commodity does not mean you are a failure. It just means that you have to mean something more than the intangibles that originally made you a hot company. You have to offer a better product consistently and at a good value. Nothing is more commoditized than McDonald's coffee. It also happens to be the best. If Starbucks wants to continue to grow their business while charging $4.00 for a cup of coffee, it's going to have to be better coffee and a better experience. If Schultz turns his attention to this, which he seems to be doing, then Starbucks will be fine.

Wednesday
Feb212007

Gallup Poll on Who We'd Vote For

This new Gallup poll (via Outside the Beltway) is pretty fascinating. One thing really caught my eye. Liberals are more likely to vote for candidates that meet any of the descriptions with one exception: someone 72 years of age. I wonder why that is.

Wednesday
Feb212007

Steve Jobs, Proud to Be Nonunion

I just Dugg this story from Wired that talks about Steve Jobs' position on school reform. The writer's left-wing rant holds some water, but hidden in his diatribe is his agreement that the current structure of teachers unions does not help our education system. Yes,  public schools are indeed a reflection of the socio-economic realities of their communities. Yes, Steve Jobs is right about the fact that unions hamper the ability to recruit and retain the highest-quality educators.

I don't know much about Steve Jobs' other political or economics views. Given his Silicon Valley roots, I bet he and the Wired writer are on more common ground than the article would suggest. As for me, I'm now one step closer to actually considering a Mac for my next computer.

Monday
Feb192007

Ten Times the Toys

There's an article in last Thursday's Wall Street Journal about the 2007 American International Toy Fair held last week in New York City.

It's no mystery (and no wonder) that the toy industry is in precarious shape in this country. That's not news, but a fascinating stat attributed to Eric Clark, author of a new book about the industry, grabbed my attention:

The problem for the fair, and the industry, seems to be oversaturation. In the U.S., in particular, 4% of the world's children consume more than 40% of the world's toys, according to Mr. Clark. Kids have more toys that hold their interest fleetingly at best.