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Tuesday, December 27, 2005

Things Go Better With Pepsi

Ever since I wrote The Revenge of Brand X a few years back, the most controversial chapter has been the one in which I identified ten brands that should be doing a whole lot better than they are. In fact, to the shock and dismay of too many people, I went so far as to accuse Nike and Coca-Cola as being two incredibly over-rated and ineffective brands.

Mind you, I never said they weren't successful brands. I just said they weren't good brands at all, for the simple reason that nobody - and I mean nobody, including their executives, customers and retailers - could consistently explain why either of them were "the only solution" to their markets' problems. Even if you don't accept my own theorem on a brand being "the only solution to their problem," it's pretty disconcerting to know that even while your brand has high awareness and great sales, nobody can figure out why.

You don't have to look much further than the taglines of each brand's advertising to see how instantly forgettable and ineffective each is. Generic, say-nothing phrases that supposedly mean something to everyone, but in reality, mean nothing to anyone.

This week I'm vindicated in my prognostications, because December, 2005, was the milestone event that, according to the industry "experts", was never going to happen. The great, big, undefeatable Coca-Cola was quietly eclipsed in market value by none other than its nemesis, Pepsi.

Yes, you read that right. As of this writing, Pepsi is bigger than Coke.

Now, before you jump to any conclusions, you have to understand that the valuations to which I refer describe the entire holdings of each company. That means it includes all the subdivisions and sub-brands owned by each. In Pepsi's case, that includes food and other products. In Coke's case, it doesn't mean much, because 80% of Coca-Cola's holdings are in beverages while Pepsi maintains its beverage component to about 20%.

To make matters even more bleak, Coca-Cola shares of stock have barely nudged one per cent over the last twelve months, while Pepsi's have surged close to 15%. Gee, is it starting to make sense why Coca-Cola can''t get its act together? Any clues as to why it took months and months to fill the CEO's role? Why Coke stock continues to languish? Why, despite repeated attempts at incredibly stupid zero-calorie products, Coke still can't come up with a winner?

How about this: Coke has no brand. I said it then and I'll say it again. Coke has no brand.

If Coke did have a brand, they'd have been able to extend it to other products, whether they be beverages or food. They can't. If Coke really had a brand strategy, they'd have been able to select from a bevy of CEO candidates just drooling for the chance to take the helm. They didn't. If Coke knew how to articulate and execute a brand strategy, they wouldn't be sitting on their hands, watching their stock circle the drain while Pepsi ate their lunch.

Of course, none of this will be read by, or acted on, by the Coca-Cola powers that be. As long as the golf club memberships are covered and next quarter's numbers are eked out, there's still time for lunches with other non-branded heroes, like the geniuses from K-Mart or Kodak or Maytag.

It's a pity. A real shame. And it's too bad that there's nothing you and I can do about it. Oh wait. There is.

Short your Coke.

Friday, December 16, 2005

The Case Against Satellite Radio

Friday, December 16, 2005, will go down in history as the day free radio got its face slapped by the gauntlet of satellite radio. Or maybe it won't. December 16 was the day which, after nearly a year of pre-launch hype, Howard Stern officially left the world of free, over-the-air radio and forged into the dark unknown that is satellite radio.

Beforfe I get too far, let me say that I'm a big fan of Howard Stern. I always have been and not just because he features hot chicks and gross jokes. I like the way he can come through a radio and make millions of people feel as if he likes each one personally.

That kind of fame comes with a cost: many are the times when Howard has complained about complete strangers who feel so close to him as to presume a friendship when they see him on the street. The only other entertainer I have ever seen reach through an electronic tube with that kind of emotional connection is James Taylor, whose warmth melts through any medium as if he's right there in the room with you.

Another reason I strongly support Stern is that, unbeknownst to the majority of the American right, he is America's most ardent protector of free speech. In fact, the only true difference between the Founding Fathers and Stern is that while they mostly wrote about free speech, Howard actually practices it.

All that being said, and wishing Howard the best of luck in his new venture at Sirius radio, I have to acknowledge that I'm not a big fan of satellite radio.

A week or so ago, my car went into the shop for a week's worth of repairs. The loaner car furnished to me was a 2006 something or other, fully equipped with a satellite radio. At first, I was pretty excited about it. Here was my chance to find out what all the buzz what about. Commercial-free radio. Digital purity. Total freedom of speech.

Unfortunately, my rhapsody didn't last too long.

I think I got about two blocks when I realized how incredibly boring satellite radio really is. Maybe it's the medium's infancy, but there's something inherently wrong with the way satellite radio is programmed. For the uninitiated, satellite slices its bandwidth into zillions of channels, all grouped by format, which means you can listen to all 50's, all 60's, all 70's, all 80's and so forth. And you can listen to it all the time, wherever you drive, anywhere across this vast, wonderful land.

You can also drive 3000 miles due east and hear nothing but stand up comedy. Or country and western music. Or gospel music. In fact, one of the satellite companies used to boast about driving coast to coast without ever having to switch the station.

Which is precisely the problem.

I personally wouldn't pay $150 a year to listen to radio, but that's not my main concern. My main issue is that man can only take so much of all anything all the time. It could bring seizures before he'd cross the first state line. And the part I find most egregious is the part most heralded by XM and Sirius: The fact that I can drive coast to coast without switching stations means I can drive coast to coast without ever knowing what life is like between those coasts.

I can recall a time when, at the tender age of seventeen, I drove with my father to Cheyenne, Wyoming in his long, black El Dorado Cadillac. Sure, it was great to be on the road with my Dad, hitting clubs in Las Vegas and cheap motels in Grand Junction. But the best part was fiddling with the radio dial as local stations crackled in and out, playing songs and reporting local news that we'd never heard of back in Los Angeles.

When you drive cross country, you don't want to see the same malls and stay at the same hotels you have at home. The whole point of leaving is not staying where you are; why would you short change yourself by listening to the same radio station for 3,000 miles?

Of course, just because you have satellite doesn't mean you have to listen to it. You can just as easily switch to the AM or FM bands and hear as much pig calling as you wish, which is more likely the route I'm apt to take. Which brings me back to Howard.

If anyone can make satellite work, it will be Howard Stern. He has the smarts, the creativity and the intelligence to make it successful. He's an innovator and can already see what's wrong with satellite. He'll change it the way he changed FM radio, and make satellite the Next Big Thing.

Like I said, I'm not buying into it, but millions of people will. Once again, the satellite radio people will have Howard to thank for that. And of course, they never will.