Archive for the ‘Advertising’ category

Distribution Is More Important than Advertising

25 June 2010

First, a disclaimer: I do not drink bottled water. I use filtered water using the same process most of the major brands use: reverse-osmosis. Almost all bottled water is either filtered tap water or water from springs that are usually less healthy than New York tap water. In fact, some bottled water is merely unfiltered tap water.

You may be interested to learn that US consumers spend more on bottled water than on iPods or movie tickets, although sales have fallen in the past few years due to environmental concerns and the bad economy. New York, Illinois and Virginia state governments have banned bottled water at public events and in state offices. Some eco-conscious companies like Cisco and Google have removed it from their corporate campuses as well.

I will not discuss why consumers would pay up to 10,000 times more for bottled water than what they can get in their own homes; I want to discuss who gets the major share of the 50 billion bottle per year sales in the US and why.

The top two sellers in the US, Aquafina from PepsiCo (launched in 1994) and Dasani from the Coca-Cola Company (launched in 1993), both originate from municipal water systems. But they did not start the bottled water business. There were hundreds of smaller, family-owned companies that were operating for more than a century. For example, Mountain Valley Water (launched in 1871) became the first bottled water to be available coast to coast in 1928.

But despite hundreds of companies, bottled water was barely a business in 1976 when the makers of a small green bottle opened an office in New York. By 1988 Perrier had 80% of the imported bottled water market by convincing restaurant owners that they could make more money touting bottled rather than tap water to their patrons.

So the two big Cola bottlers were decades late to the party. In addition, most of the century old bottlers were selling water from natural springs, while Coke and Pepsi were merely selling filtered tap water. But being first or having a superior product is not what drives a market.

As much as advertising and packaging are important to sales, nothing pushes consumer purchases as shelf-space. Advertise all you want, make it look pretty, but if your product is not in every supermarket, on the right shelves, you are not going to turn over product.

If there is one thing that Coke and Pepsi have, it is distribution. By tapping into their large network of bottlers, they have immediate access to the same shelf space at every supermarket in the country. If a new type of drink comes along, say goat-juice, as disgusting as it may sound, if Pepsi and Coke put it on their shelves then you can take it to the bank that those particular brands of goat-juice would outsell anyone else.

And with a little bit of advertising and the right packaging, it could be a national drink in short order.

By the way, NestlĂ© is the world’s largest water bottler by virtue of having many more brands, such as Poland Spring (3rd in sales), Deer Park, S. Pellegrino and Perrier. NestlĂ© as well has great distribution powers.


Even Vandals can Have Brands

26 March 2010

If Jesse James (the train-robber, not the bum who blind-sided Sandra Bullock) were alive today, I have no doubt he would be pushing his own line of clothes and have endorsement deals with Nike (Rob a train? Just do it!) and Adidas (first daylight bankrobbery in peace time – Celebrate Originality).

Today if you’re the best at any endeavor, you can be rich and famous.

graffito artist slick - Adidas Slick Artillery Mid sneakerTake graffito artist Slick who heads up his own successful brand Dissizit. Adidas has put Slick on their truly awesome Artillery Torsion retro Basketball shoe (note the Slick Artillery logo on the tongue).

Check out Adidas’ ad video here.

To some, graffiti is an art form; to others it is vandalism. Know how you can tell? If it’s done without the property owner’s permission, it is vandalism – I don’t care how beautiful it may be.

But suppose you’re not Nike or Adidis but a small business that could profit from a tie-in with graffiti? Step in Man One Design who will create graffiti art for your brand, targeting the youth market that just doesn’t respond to traditional advertising.

10 Clever Commercials

8 January 2010

Just thought I’d list 10 interesting video commercials today.

Vodaphone tells their story in 11 seconds: video.

If you are out of shape it only takes 22 seconds to find out: video.

Here’s a German ad (with English voice-over) for John Deere: Video [H/T to Small Dead Animals].

Here’s an ad for Levi’s that shows us the journey is more important than the destination: video.

It takes a lot of guts to make a 2 minute and 27 second commercial where you don’t reveal the product until the last 4 seconds, but Sony BRAVIA does that here: video but T-Mobile also carries it for a few seconds longer (2 minutes 41 seconds) at Liverpool Street Station: video.

Want to show that your product has the human touch, try this clever Toyota ad: video. Then for a change of pace, try this Toyota piece that Bests Ads Ever calls ‘Best car ad ever?’: video.

Guiness takes a hackneyed phrase and turns it into an improbable race with snails: video.

The best commercial of all time is arguably the Honda cog ad: video.