Our own Brad White has been selected as one of three Conference Chairs for the 2011 PDMA Annual International Conference.

This year’s conference is being held in Phoenix, AZ from October 29-November 2, 2011. Stay tuned for details.

In 1971, Las Vegas businessman Michael Oliver arrived at the Minerva Reefs in the Pacific Ocean, with barges of sand in tow. Oliver’s vision? A new nation, built on an artificial island, with “no taxation, welfare, subsidies, or any form of economic interventionism.”

After Oliver had filled the Minerva reefs with enough sand to bring the level of his new island above the waterline, the Republic of Minerva issued a declaration of independence in January 1972. They immediately sent letters to neighboring countries and even created their own currency, the 35 Minerva Dollar coin.

Unfortunately, the Republic of Minerva’s official currency wasn’t enough to convince Minerva’s neighbors of the nation’s legitimacy. The Tongan government sent an armed expedition in June to claim the Minerva reefs as their own. And on June 21, 1972, the Minervan flag was hauled down.

Modern attempts at new nation building have met similar fates. In April 1950, the small mining town of Rough and Ready in California seceded from the Union. Like the Republic of Minerva, the inhabitants of Rough and Ready were hoping for smaller government – specifically they wanted to avoid a recent tax on any new mining claims and the prohibition of alcohol in Nevada County, where Rough and Ready was situated.

Rough and Ready’s short-sighted secession was rescinded by its own voters less than three months later, when they realized they were no longer entitled to celebrate US independence.

Along the same lines, the Republic of Rose Island was founded by Italian engineer Giorgio Rosa in 1967. Similar to the Republic of Minerva, Rose Island was build on an artificial island – 400 square meters, supported by nine pylons, in the Adriatic Sea. Rosa, the self-declared President, built a restaurant, bar, nightclub, souvenir shop and a post office. He also issued a number of postage stamps, some displaying the currency of the Republic of Rosa, the “Mill.” However, no coins or banknotes were ever known to be produced. The Italian government soon landed on the artificial island and took control, right before the Navy used explosives to destroy the island.

So what do all of these new nations have in common? Failure. Complete and absolute failure. Regardless of their motives behind starting a new nation, they failed to account for all of the steps required and the potential responses from existing nations. An over-investment in the visible symbols of a nation – things such as flags, currency, and postage stamps – may have distracted the leadership from what was truly important. While no one can argue that currency and postage stamps aren’t necessary, one could make a strong argument that an extremely vulnerable new nation might have more important things they could have been doing behind the scenes. Things like diplomacy, gaining recognition from governing authorities, and building infrastructure. These are not as visible as a postage stamp, but they lay the foundation for successful nation-building.

In the same way, companies that jump straight to the visible symbols of marketing without investing time and energy behind the scenes do themselves a disservice. Yes, ultimately an advertisement or a Twitter account or a press release is what the public sees. But the decisions behind the symbols are the true drivers of success. Things like segmenting and targeting a market, developing a positioning statement, developing a pricing strategy, and defining a brand architecture.

The real takeaway from the failure of these three “nations” is that strategy matters. Whether you are an established Fortune 500 company or a new start-up, you will benefit greatly from sound marketing strategy.

Image sources: tbd1 and jimmywayne

Over the past few decades the balance of power within retailing has shifted from the manufacturer to the retailer. The rise of Walmart and Target along with consolidation within the grocery and drug channels has significantly consolidated the US retail market. The practice of category management among retailers was a direct outcome this consolidation. Prior to category management, retailers most scarce resource – shelves - was often the battleground between competing brands and products with little or no gain for the retailer. For example, an advertising or price promotion of Crest could result in 10% increase in sales for Crest, a 10% decrease in sales for Colgate and no net gain for Walmart. There were also diminishing returns in price negotiations with manufacturers and a realization that profit growth for the retailer was linked to growth of the entire category.

This led to the modern practice of category management. All related or substitutable products in the portfolio are grouped together into a “Category.”  Each category is run like a mini-business, managed by both the retailer and suppliers, with its own joint P&L targets. The relationship between manufacturer and retailer becomes more collaborative and open where suppliers are expected to propose initiatives that add to the total category sales and the satisfaction of the shopper.

Over the last decade, major consumer goods organizations have reoriented their Marketing, R&D, Innovation and Sales processes to align with the retailer category management approach. This shift was in response to the increasing power of retailers but also a realization that contributing to category growth led to better performance than the historical zero-sum competitive battlefields on the shelves. Simply put, in the modern retail environment, category growth creates more ROI for both retailers and suppliers while, at the same time, enhancing consumer value.

We interviewed innovation and marketing professionals at Georgia-Pacific, Kraft, The Home Depot, Unilever, Colgate-Palmolive, Hasbro and General Mills to better understand the advantages for a manufacturer to reorient from the historical brand-centric approach to a category-centric approach. Each had a unique perspective but several common themes emerged:

•    Consumer Insight Capability. Developing a deep understanding of consumer needs across an entire category can lead to a portfolio of offerings targeted to the needs of diverse user segments, occasions and needs. For example, Georgia-Pacific manages both Quilted Northern and Angel Soft bath tissue brands. Rather than being cannibalistic, a broader understanding of consumer needs within the category has led to a portfolio targeted to specific needs.

•    R&D Capability. An investment into a category approach, with a broader, more robust understanding of the fundamental science behind the category and the emerging technologies that can meet consumers’ needs, leads to more effective R&D investment. For example, Colgate’s investment into understanding teeth and gum biology led to a pipeline of industry leading oral care products that closed the share gap with Crest.

•    Assets and Equities Development. Category-focused consumer insight and R&D also lead to a more robust development and management of brand equities as well as improved technology and the patents to create a sustainable advantage from that technology. Brand equity, as an asset, can be leveraged to create growth with a category. General-Mills recently introduced its Simple brand of cookie mix and has already built enough equity around the brand to leverage it to drive growth of multiple brands across the entire baking category.

•    Innovation and New Product Development. Capabilities and assets are only advantages if they translate to viable and sustainable growth. P&G has become an innovation leader by truly understanding consumer needs within the category, investing in R&D to develop (and patent) products and developing strong brands with appeal across categories. Swiffer is an example of a successful innovation that could only have been the product of a category approach to insights, R&D and asset development. P&G had several cleaning brands but it was a broader category insight and R&D capability that led to the development of an entirely new cleaning system – one that none of P&G’s individual brands would have developed independently. Within ten years of launch, Swiffer is likely to become P&G’s next billion-dollar brand.

•    Growth. Ultimately, the primary rationale for a category strategy is growth. Innovation and new product development lead to organic growth but a category is a defined space with a profit pool and set of consumer needs that can be satisfied through acquisitions as well. Mattel, the world’s largest toy maker, acquired American Girl as part of a broader strategy to dominate the doll category. Rather than building the equity of its Barbie brand or developing a new brand in the category, Mattel acquired the successful brand and made it immensely more valuable by folding it into Mattel’s existing distribution system.

A category approach is more holistic than a brand-centric approach.  It does not assume that a brand is well positioned.  It identifies a space – a potential profit pool and an area of consumer needs - and then develops innovations that meet both the internal financial hurdles and the consumer needs.

Innovating in categories does not constrain the organization to thinking narrowly about a brand’s equities, targets or distribution. Category innovation allows the company to find the best brands (internally or externally) and to build, buy or partner to deliver on consumers’ needs. A brand-centric focus leads to more line extensions and increasing brand affinity to drive sales. A category focus can broaden the thinking to developing new breakthrough products, capabilities or sub markets to grow share within the category, or grow the category itself.

In the end, marketing and sales must deliver on customers’ needs and, in the modern retailer environment, retailers are demanding an approach that aligns with their category management philosophy. So a category approach is increasingly a mandate rather than a choice. But it is a mandate within which manufacturers can develop the consumer insights capabilities, R&D capabilities, brand equity and IP assets to create organic growth by leveraging existing brand equities and/or new product development across the entire category. It can also lead to brand-adjacent acquisition to capture a greater share of the category.

The modern retail environment has shifted power from manufacturers and suppliers to retailers but this shift offers significant opportunities for growth by focusing on the consumer needs across entire categories and partnering with retailers to deliver brands and products to serve those needs.

Image source: SpringsBargains

Our Senses are How We Experience the World

In a normal lifespan you will experience almost 24 million images of the world around you. There are about 100 touch receptors in each of your fingertips. If your nose is at its best, you can tell the difference between 4,000 and 10,000 smells, and 75% of your emotions are generated through what you smell.

Despite the power of all of our senses to perceive the world around us, almost 83% of all commercial communication appeals only to one sense – our eyes. Today, this is not enough. If brands want to develop a deeper, more emotional connection with consumers, it will be important to simulate the senses, and as many of them as possible.  This is a concept referred to as Sensory Branding, as part of a broader shift in brand communication efforts to engage through Experiential Marketing.

Sensory Marketing More Important Than Ever

•    It is increasingly difficult to connect with consumers. There is a paradigm shift happening in the 21st century. Technical advantages are fleeting, anything can be duplicated and there are endless choices for consumers. Armed with endless sources of information and choices, consumers are fickle, flee from the mainstream and see through the persuasion techniques of traditional marketing.
•    Marketing must engage the most powerful part of the mind. Roughly 90% of consumer buying behavior is subconscious. Buying is not a rational decision, but is instead an emotional decision that arises from within the subconscious brain. In fact, unconscious decisions guide conscious decisions - our brains automatically make buying decisions, sometimes within fractions of a second. This unconscious part of the human mind is capable of producing very powerful and beneficial experiences over and above those expected from the technical merits of a product.
•    Traditional marketing and product efforts are not enough. In this new economy, many brands are experiencing diminishing returns on traditional ad spending and improvements to products and services.  As branding becomes increasingly important to differentiate, marketers will need to employ new forms of communication to be successful.

Sensory Branding – An Evolving Practice

Sensory Branding is a form of branding that relies on the use of sensory stimuli to develop a more relevant, compelling and memorable customer experience, and engage with consumers on an emotional level. However, sensory branding is not a new concept. Many successful brands have worked to engage the senses. Consider Kellogg’s use of sound in Rice Krispies’ signature “Snap, Crackle and Pop”, Crayola’s trademarked and differentiating scent of its crayons, and the tactile experience at an Apple store where interaction with the products is strongly encouraged.

However, in today’s world, focusing on just one of the human senses is not enough. When experiencing the world around us, the human brain does not process stimuli through one sense. Remember some of your favorite experiences or memories.  What senses did this experience engage? I love going to college football games, but the thrill of my experience is not just about the action I see on the field.  It’s the roar of the crowd on a good play, the smell of hot dogs and popcorn, the taste of warm hot chocolate, and the camaraderie of high fiving with my neighbors when our team scores. All of these sensory elements create such strong memories that every time I smell popcorn or drink hot chocolate, I immediately think “college football” and feel a tinge of excitement inside.  Today, successful brands are engaging several of the senses to create the ultimate brand experience. Singapore Airlines has successfully differentiated its brand through a multi-sensory experience by carefully designing the fragrance, flight attendant look and behavior, interior setting and foods and services, to blend together to reflect the brand image.

Is Your Brand Communicating Effectively to the Senses?

When thinking about developing your future brand marketing strategy, consider the following:
•    Which senses are you using to engage consumers in your brand today?
•    How well are you using sensory stimuli to convey your target brand experience and image?
•    How can you better leverage multiple senses across different consumer touch points to communicate and differentiate your brand?

(r)evolution can help you successfully create the right sensory branding strategy through five key steps:

1.    Determine the most important elements of the brand image, experience and positioning you want to convey
2.    Map out key points of customer’s experience with your brand
3.    Identify a blend of potential sensory stimuli that best convey the brand along key touch points
4.    Validate through consumer research
5.    Create a sensory stimuli roadmap to activate through your marketing strategy and communication

Sources:  Millward Brown Study. Lindstrom, Martin. BRAND sense. New York, New York: Simon& Schuster, 2005. Walker, Rob. Buying In: The Secret Dialogue Between What We Buy and Who We Are. New York, New York: Random House, 2008. Zaltman, Gerald. How Customers Think: Essential Insights Into The Mind of the Market. Boston, Massachusetts: Harvard Business School Press, 2003. Brandchannel.com. Image from paul.malon.

For over 1300 years fishermen in China, Japan, and other places around the world have traded in their nets and poles in favor of birds.  That’s right, birds.

The ancient technique of Cormorant Fishing puts the skills of these glossy black avians to good use and over the years has provided fishermen with food for their families and a means to make a living, not to mention offering a unique and compelling tourist attraction.

While visiting Guilin Province in China a few years ago, I had the opportunity to take a trip down the Li River, surrounded by the towering limestone Karst landscape, and watch a demonstration of this intriguing fishing method.

Each fisherman fishes with his own small set of trained Cormorant birds, who are something akin to pets and are passed down from generation to generation.  Every night at dusk the fishermen load their birds onto a flat-bottomed boat and float down the river. The birds jump into the water and get to work, catching the fish that are attracted to the boat’s light. Each bird is fitted with a small collar, which prevents the birds from swallowing any fish that they catch whole.  Over the course of a few hours the fishermen pull the birds back to the boat one-by-one, slipping the fish out of their mouths and returning the birds to the water.  When enough fish have been caught, all of the collars are removed and the birds are allowed to eat their fill.

Apply this concept to business and the old adage, “If you can’t beat them, join them” may come to mind.   Ancient fishermen recognized that they had an unlikely competitor in the fishing business and capitalized on the expertise of these animals by joining forces with them.

Coors Brewing Company (now MillerCoors) took this concept to heart in the late 1970’s when Coors Light was first introduced in the U.S. market.  The beer became popularly known as “The Silver Bullet” due to the taller, narrower silver packaging.  Coors knew a good thing when they saw it and rather than fighting a rather violent nickname referencing firearms, they embraced it.  The Brand’s marketing references this consumer-generated nickname to this day in its Silver Bullet Train imagery and NFL Silver Tickets promotion.

As we look at our own business landscape, including our competitors, consumers and other stakeholders, what perceived weaknesses can we learn from or take advantage of?

Image sources: David Newbegin and Coors Light

(r)evolution is excited to be a sponsor of the PDMA event “Relevant Design - Design Thinking to Transform Business” on Thursday, Sept 30th.  As a sponsor for the event, we can offer you a discounted ticket price of $112.50. please use the code SPONSOR25 when you register.

We hope to see you there!

Details on Relevant Design

Why should you attend the Georgia PDMA Summit?

• National Speakers: Learn best practices from the country’s top corporations and agencies including Coca-Cola, GE Medical, IDEO, and Lippincott.
• Great Networking Opportunities: Mingle with hundreds of product development professionals from a variety of industries and backgrounds.
• Engaging Exhibits: Check out innovative companies that can help revolutionize your approach to product development.
• Expert Panel Discussion: Interactive session targeting students and recent graduates to provide insights on alternative career paths, changes in the NPD world and corporate vs. consultant organizations.

Sessions include:

• Integrating Design Thinking in a Global Business Lawrence “Murph” Murphy, GE Medical
• Coca-Cola Freestyle - The Ultimate Fountain Drink Experience Chandra Stephens-Albright, The Coca-Cola Company
• Design Thinking - Perspectives from IDEO Michael Hendrix & Clark Scheffy, IDEO
• Taking Delta Airlines “Onward and Upward” Through Experiential Design Connie Birdsall, Lippincott
• New Product Development Practitioner Insights Round Table Rick Purcell, Kimberly Clark; Sam Zaidspiner, IrriMax; Jason Bernstein, Barnes & Thornburg, LLP; Ken Westray, NP Learning; Karen Williams, GE Appliances & Lighting

Visit www.RelevantDesignAtlanta.org for additional information.

Relevant Design: Using Design Thinking to Transform Business

Date:  Thursday, September 30, 2010
Time:   11:00am to 6:00pm
Location:   The Coca-Cola Company Headquarters
Registration:   $150 (discounted to $112.50 with (r)evolution’s code: SPONSOR25)

Registration ends September 28th.  Register now.

On August 28th, (r)evolution will host its first ever Innovate-athon, a half-day event designed to provide pro bono marketing strategy and innovation consulting services to a selected non-profit organization.  This year’s benefiting organization is The Global Village School, a unique organization that helps young women whose lives have been disrupted by war and refugee camp experiences achieve their educational dreams. The (r)evolution team will facilitate the Innovate-athon, bringing together many of our talented clients, partners, and friends to tackle some of this organization’s toughest challenges. By combining our brain power and business experience, we firmly believe that together we can produce valuable and sustainable strategies that can help transform The Global Village School and the lives of the girls that attend the school.

Here at (r)evolution, we are so grateful for all that the Atlanta community has given to us, both as a company and as individuals.  We believe that it is our responsibility to give something back and, in that spirit, we have built and are executing against a holistic Corporate Social Responsibility platform.  The Innovate-athon is our first major step in a plan to contribute our time, money and resources to causes and organizations in our community that need our help.  Stay tuned for more information on our CRS platform.

More about The Global Village School

The Global Village School opened in Atlanta in August 2009 to provide teenage girls whose formal education has been interrupted by war and refugee camp experiences with an enriched, Montessori-informed education. This school’s ground-breaking curriculum provides teenagers with intensive English language training and enhanced education, with an emphasis on science, math, humanities, business, and the arts.  For more information, please visit their website.

Our own Brad White is serving on the Product Development and Management Association (PDMA) Conference Committee, helping to explore the leading edge of innovation. For a brief video overview of the PDMA Global Conference October 16-20 in Orlando, FL, click here. If you are interested in attending, you can register here with the following discount code:

CM10GC

20% of Rio de Janeiro’s population lives in favelas (Brazilian Portuguese for “slums”). And all over Brazil, cities such as São Paulo, Fortaleza, Guarulhos, and Curitiba have seen the growth of large favela populations. A favela is not simply a slum, but instead is marked by:

•    Illegal building on 3rd party land
•    Irregular, self-constructed, unlicensed housing
•    Little or no infrastructure
•    Residing on the urban periphery, many times on undesirable land (such as hillsides)

This combination creates a unique living situation, in which residents need to provide their own water and navigate steep, ad hoc dirt passageways instead of sidewalks and streets in a congested environment. In these highly compact, structurally deprived societies, the rules are different and both residents and governments have had to adapt. When examined, many of these adaptations reveal innovation best practices:

1.    Turn the problem on its head
2.    Incentivize correctly
3.    Learn from everyone

Turn the problem on its head

How do you bring community facilities to a place with literally no free space? Favelas are built organically without prior planning, and this creates problems when all the space is gone. Brazilian architect Jorge Mario Jáuregui has a solution. While there isn’t any free space to use for public facilities, there is space that can be used twice.

“In a project currently underway, Jorge is creating public space in the Manguinhos favela on existing train tracks that bound the community on one side. These train tracks will be elevated and the space below will become a linear park, defined by the conjugation of spaces, activities, buildings and vegetation. Facilities in the park will include sport, cultural, and income generating facilities, with a focus on providing children and teenagers with alternative attractions that will integrate them into the community. The space will also incorporate a new public transportation hub.

“This new metropolitan park will be an articulator, attracting favela residents as well as a larger public from the surrounding communities. As an integrated public space it eliminates the existing barrier and transforms the space from divider to connector. By directly intervening at the physical boundary of the favela, Jorge is directly confronting the deeper socio-economic divide that has plagued the city for decades.”

Jorge Mario Jáuregui realized that while there was no horizontal space left to plan public spaces, there was vertical space left. He turned the problem on its head and came up with a unique solution that meets all of the project’s objectives.

Incentivize correctly

Local governments and institutions are also approaching these favelas in new ways. While historically ignored, city governments are realizing that these favelas are not going away and are only growing. Unless all necessary parties have incentive to change, growth will continue in the same haphazard way as before. The city of Curitiba, in Southern Brazil, is working to integrate favelas into their society through innovative measures that incent residents in favelas to work alongside the government.

“Most favelas receive transit stations shortly after being built, and the city runs a cleanup program for favelas, in which residents receive a bag of fresh produce in exchange for every bag of trash collected and turned over to the city.”

Through their trash for produce program, Curitiba is encouraging both clean living and healthy eating. The favelas get cleaner, the people get healthier. It’s a win-win for all parties.

Learn from everyone

Last, the world is starting to realize that the favelas have much to offer them. True, favelas are home to some of the poorest, most socially marginalized people in the world. But that doesn’t mean they don’t have good ideas. An Architect article titled “Cities of Tomorrow” reveals that favelas are showing many of the signs associated with sustainable development:

•    Compact footprints
•    High density
•    Low energy use
•    Little to no grading
•    Reclaimed materials
•    Humane scale
•    Vibrant social interaction
•    Self-determination

The most unique perspectives come from the most unique vantage points, whether that means talking to a child in a favela or involving all of a company’s pay grades in the innovation process.

They say that necessity is the mother of invention, so it’s no wonder that the favelas of Brazil are such fertile ground for innovation best practices. Sometimes the best ideas come from the most unlikely places, and the slums of Brazil are no exception.

Image sources: walker_dawson and Jorge Mario Jáuregui

(r)evolution is thrilled to welcome Steve Jones as a Principal. Steve is the former CMO of The Coca-Cola Company where he reported to the Chairman and oversaw one of the world’s most loved and recognized beverage brands. There he focused on creating growth by diversifying the product portfolio through aggressive new organic product development and acquisitions.

Steve has held many roles, both in the public and private sector, over his successful career. Early in his career, Steve managed some high growth brands, including Huggies diapers and Kleenex paper products at Kimberly-Clark. He then spent eighteen years at The Coca-Cola Company in various roles, including, Sr. Brand Manager of Diet Coke, Marketing Director of Coca-Cola Great Britain, Region Manager, President of Coca-Cola Japan, CEO of The Minute Maid Company and Chief Marketing Officer.

In addition to his marketing and business operator background, Steve brings diverse experiences with private equity deals and several small/midsize business endeavors in the past seven years. He served as CEO of Ace Bakery, a private $20 million gourmet bakery and, most recently, as CEO of Jones Soda Co., leading the turnaround of the struggling new age beverage company.

Now at (r)evolution, Steve hopes to push our thinking and further refine our practice areas to be even more relevant to the evolving business landscape. He will also help provide our clients with a new perspective on approaching growth creation and provide a range of expertise that can help us to deliver better and more actionable strategies. With his senior strategic leadership skills, diverse global experiences and recent entrepreneurial activities, Steve will help us grow stronger, smarter and more focused in order to continue our role as thought leaders in growth creation and to provide the highest quality solutions for our clients.

We welcome everyone to connect or reconnect with Steve directly. Alternatively, a member of our team will be happy to make an introduction.