Growing A Brand Is A Choice: Neatfreak! Chose To Be A Brand

TEC Canada | Leadership Development for the Thinking CEO

By TEC Canada, May 14, 2014

TEC Canada is comprised of the most influential leaders and entrepreneurs from high-performing organizations across the country. These Members have compelling stories to tell about building brands that stick and creating messages that resonate. TEC has partnered with Sticky Branding to bring you these stories about the successful brands of our Members, like the Neatfreak Group. The article first appeared on Sticky Branding.

 

Companies have a choice: be a supplier or build a brand.

Growing a brand is a choice. It’s a choice to challenge the status quo. It’s a choice to create unique and identifiable products. It’s a choice to stand out, and build a name for your company.

In 2008 Neatfreak made these choices. Neatfreak is now the category leader in home organization and storage. They design and manufacture storage products for closets, garments, shoes and laundry. And you can buy their solutions from major retailers like Walmart, Target and Bed Bath & Beyond.

But prior to 2008 Neatfreak was a supplier. The company was founded in 1984 as Varimpo, a private label manufacturer of plastic hangers and other storage products. The company was a successful manufacturer, but to get to the next level they decided to become a brand. 

Not just another supplier
John Collins, Partner and Managing Director of the Neatfreak Group explains, “The home organization and storage category is a $7.6 billion a year industry. 85% of the industry is serviced by private label manufacturers, and 15% is driven by six competitors with brands.”

“We were playing the private label game, but we asked ourselves how do we create a compelling opportunity for A, the consumer, and B, our retail partners?”

Neatfreak was born out of a desire to create more value. A supplier is just that, a supplier. But a brand has more freedom to innovate and design products that delight consumers, while creating programs that move products off the store shelves, which delights retailers. 

Focus on the consumer
Neatfreak’s products are popular, because they are functional and fashionable.

John Collins says, “Our purpose is to help keep the consumer organized, and control the chaos in her life. We bring harmony to everyday life, and we do that through imaginative products.”

Design is at the heart of fulfilling their purpose. The private label companies are effective at manufacturing, but Neatfreak stays a step ahead with their commitment to design. “We design our products, which is what separates our company from the chaff, in Lyon, France,” says John.

That combination of purpose and design is very powerful, because Neatfreak is able to define the standards for their category. And that clearly differentiates them from the masses of private label manufacturers. 

A name people remember
Innovative, well designed products are the foundation of Neatfreak’s brand, but they also have a brand identity that sticks.

The “Neatfreak” name is memorable, and it sums up the consumer experience. John says, “The name resonates so well it’s unbelievable. The name is really memorable, and it conjures up interesting feelings for retailers and consumers.”

The brand name is then enhanced with packaging that pops. “53% of the decisions in this category are decided on packaging. We spent a lot of time and money on repositioning Neatfreak on store shelves, because once a customer experiences a Neatfreak product the repurchase rate is extremely high,” says John.

Neatfreak’s name sticks, and customers seek them out again and again. 

Growing a brand is a choice
It all starts with a choice. In hindsight the decision for Neatfreak to build a brand seems obvious, but in 2008 it was a challenging and strategic decision.

The choice is for your company to make. Do you want to be a supplier, or do you want to be a brand? Both options are viable, which do you choose? 

Author bio
Jeremy Miller is Brand Strategist, Speaker and the President of Sticky Branding — a branding and business development firm that helps companies stand out, attract customers and drive sales. For more information visit http://www.StickyBranding.com. You can reach Jeremy at 416.479.4403. 

TEC Member Profile
Neatfreak Group Inc. designs, manufactures and distributes innovative home organization products to retailers around the world. They provide imaginative solutions that make your life easier, keep things organized and help you control the chaos. Neatfreak’s purpose is to bring harmony to everyday life.

Two Concepts that Expanding Companies Should Remember

Jerry Cahn 

I teach a course in Business Strategy for CUNY; among the topics I focus on is growth through global expansion. A key implication of understanding the “flat world” philosophy, is to realize that companies need to adopt a transactional approach –one in which offices anywhere in the world, and not just the traditional HQ in the US or Europe, can provide key corporate services, such as R&D, marketing and sales.

We also spend time understanding why so many top companies have stumbled when trying to serve emerging growth countries they don’t really understand the needs of local residents to whom they will market and sell their products. For instance, just recently Walmart, the leading US retailer, announced earlier this year a retreat from their initial approach in India, and the need to alter it. They’ve had similar experiences in other countries.

Ram Charan, the world-renown business advisor to several Fortune 500 firms, addresses these issues in “Global Tilt; Leading Your Business Through the Great Economic Power Shift”.  He focuses on 2 concepts which we all should remember regardless of where we’re expanding our companies. Here are 2 concepts that expanding companies should remember: Outside-In and Future-Back.

Outside-In refers to the need NOT to focus on the expansion solely based on your competencies (strengths), but to also recognize the need to see it from the point of view of the countries’ customers for whom buying values are different than those of our domestic customers.

For instance, when Nabisco tried to figure out why their Oreo cookies were leading their market in China as they have for years in the US, they realized that they needed to understand customers better. It turns out these new customers didn’t like round cookies nor did they associate “milk and cookies”. 

A sweeter, smaller and wafer-like cookie was introduced to this market and became #1. Procter & Gamble has done the same in trying to understand how customers in other cultures look at several products, including Tide and Head & Shoulders.

Future-Back refers to focusing on the end result, and then working backward to see what really would lead to getting there, Steven Covey address the same concept in the last of his The 7 Habits of Highly Effective People: start with the end in mind. Ram takes it to the truly strategic level: extend your time horizon as you assess the world and imagine what the competitive landscape will be as much as 20 years in the future.

The key is to work backward by thinking of the implications for the present. For instance, if 20 years from now there will be more cars being used and sold in China than the US, thinking through the segmentations that are likely to be there at that time guide you on current decisions.

In India, Tata Motors introduced a car several years ago give families of 3-4 people who travel in the morning to school and work a safer yet affordable option than their motorcycle.  So instead of buying a $1500 motorcycle, Tata offered a $2500 car, which was very basic; no air-conditioning, no dashboard storage compartment, etc. The Nano received lots of publicity as a major breakthrough.

This year, Tata revealed that sales for the car are so few that they are losing money on it. Why? They concluded that if people are going to spend more money on a car, they want one with some creature comforts. So, they are upgrading it and will price it now at $3500.  A few weeks later, Ford announced that it was introducing a new car for the emerging markets – priced at $10,000.

Ford’s decision suggests that car buyers want more than basic performance plus few comforts and that the new Nano will still not be sufficiently attractive for the Indian target.

As you think of expanding your company to new markets – domestically or internationally doesn’t matter. You need to take these two concepts into account when planning.  Are you?  Share your stories and experiences with us.

What Is the Theory of Your Firm?

by Todd Zenger

Photography: Courtesy of Pace Gallery

Artwork:Tara Donovan,Untitled, 2008, polyester film

If asked to define strategy, most executives would probably come up with something like this: Strategy involves discovering and targeting attractive markets and then crafting positions that deliver sustained competitive advantage in them. Companies achieve these positions by configuring and arranging resources and activities to provide either unique value to customers or common value at a uniquely low cost. This view of strategy as position remains central in business school curricula around the globe: Valuable positions, protected from imitation and appropriation, provide sustained profit streams.

Unfortunately, investors don’t reward senior managers for simply occupying and defending positions. Equity markets are full of companies with powerful positions and sluggish stock prices. The retail giant Walmart is a case in point. Few people would dispute that it remains a remarkable firm. Its early focus on building a regionally dense network of stores in small towns delivered a strong positional advantage. Complementary choices regarding advertising, pricing, and information technology all continue to support its low-cost and flexibly merchandised stores.
 
Despite this strong position and a successful strategic rollout, Walmart’s equity price has seen little growth for most of the past 12 or 13 years. That’s because the ongoing rollout was anticipated long ago, and investors seek evidence of newly discovered value—value of compounding magnitude. Merely sustaining prior financial returns, even if they are outstanding, does not significantly increase share price; tomorrow’s positive surprises must be worth more than yesterday’s.

Not surprisingly, I consistently advise MBA students that if they’re confronted with a choice between leading a poorly run company and leading a well-run one, they should choose the former. Imagine assuming the reins of GE from Jack Welch in September 2001 with shareholders’ having enjoyed a 40-fold increase in value over the prior two decades. The expectations baked into the share price of a company like that are daunting, to say the least.
 
To make matters worse, attempts to grow often undermine a company’s current market position. As Michael Porter, the leading proponent of strategy as positioning, has argued, “Efforts to grow blur uniqueness, create compromises, reduce fit, and ultimately undermine competitive advantage. In fact, the growth imperative is hazardous to strategy.” Quite simply, the logic of this perspective not only provides little guidance about how to sustain value creation but also discourages growth that might in any way move a company away from its current strategic position. Though it recognizes the dilemma, it offers no real advice beyond “Dig in.”

Essentially, a leader’s most vexing strategic challenge is not how to obtain or sustain competitive advantage—which has been the field of strategy’s primary focus—but, rather, how to keep finding new, unexpected ways to create value. In the following pages I offer what I call the corporate theory, which reveals how a given company can continue to create value. It is more than a strategy, more than a map to a position—it is a guide to the selection of strategies. The better its theory, the more successful an organization will be at recognizing and composing strategic choices that fuel sustained growth in value.

The Greatest Theory Ever Told 
Value creation in all realms, from product development to strategy, involves recombining a large number of existing elements. But picking the right combinations out of a vast array is like being a blind explorer on a rugged mountain range. The strategist cannot see the topography of the surrounding landscape—the true value of various combinations. All he or she can do is try to imagine what it is like. 

Todd Zenger is the Robert and Barbara Frick Professor of Business Strategy at Washington University in St. Louis’s Olin Business School.

Wal-Mart Vs. Amazon: World's Biggest E-Commerce Battle Could Boil Down To Vegetables

Source: Challenges In Agri-Food And Supply Chain
    
Wal-Mart Stores WMT -1.34% and Amazon.com AMZN -0.02% are both such enormous companies that there isn’t even a fitting cliché to clumsily describe their battle for e-commerce supremacy. There isn’t a David in this fight. If Wal-Mart’s Goliath, Amazon is Godzilla.

Wal-Mart's gunning for Amazon's customers away from the cash register, online.

Both chains dominate their historic areas of expertise. Once just a bookseller, Amazon is now the biggest online store on the planet. Wal-Mart is the world’s largest retailer of any kind, its $469 billion 2012 revenues dwarfing Amazon’s $61 billion.On the web, though, Wal-Mart lags. The Bentonville, Ark. chain doesn’t break out its U.S. online sales in its financials, but e-commerce chief Neil Ashe recently said the company aims to do $9 billion of its 2013 revenues on the internet. That’s 2% of its overall sales.

Right now, with Wal-Mart’s brick and mortar business booming, it might not matter much, but it will in five years, say experts at market research firm Nielsen.

According to Nielsen, e-commerce will gain more ground than any other segment of the retail industry by 2017, with a compound annual growth rate of 11% each year. Supercenters of the kind pioneered by Wal-Mart come in second, with their growth rate projected at only about half that of web shopping.

Wal-Mart is doing all it can to catch up with Amazon online, copycatting some of the Seattle retailer’s most successful tactics.

They’re trying out lockers, one of Amazon’s hallmarks, allowing shoppers to order items online and pick them up in stores — crucial for the Wal-Mart demographic, a quarter of whom reportedly do not use debit or credit cards or even have a bank account.

They’re dabbling in same-day delivery and even going a step further than Amazon by attempting to crowdsource package drop-off among customers. They’re investing in web technology to improve both their site’s appearance and ease of navigation.

What else can Wal-Mart possibly do to win the web? Nielsen’s Todd Hale has one answer. “E-commerce is growing at 11% a year, but sales for consumer packaged goods online — food, groceries, everyday items — are more like high double digits, almost 20%,” said Hale, SVP of consumer and shopping insights. “This is the space Wal-Mart has to go after: perishable items. That’s where they need the infrastructure.”

Today’s Wal-Mart isn’t ready to sell fruit and vegetables online. Same-day delivery is still only available in a handful of states. Its grocery hub on the web, Walmart To Go Delivery, remains in beta.

Hale believes Wal-Mart should look to smaller regional businesses like FreshDirect and PeaPod as a blueprint as it rolls out its consumer goods delivery service. And he sees the big box giant’s site as a shoo-in future destination for non-perishables like diapers as long as its infrastructure allows shoppers to set up regularly scheduled deliveries, a service popular on Diapers.com.

Amazon is already a step ahead with its Amazon Fresh same-day delivery, currently available in the Seattle area but soon headed for California. “Amazon is already building an infrastructure for perishables,” said Hale. “Groceries will be the battleground coming to the forefront.”

Kantar Research vice president of retail insights Anne Zybowski agrees to an extent, but warns that Wal-Mart must make sure its web offerings extend outside the grocery aisles.

“It’s not one item at a time, it’s who wins the entire basket or shopping cart of consumables,” she said. “A big piece of the basket is groceries, but there’s also healthy and beauty care, for example.”

Zybowski added that Wal-Mart has made significant strides online in recent months, not just in prettying up its site but making shopping easier for customers who might not want to actually pay via the internet.

“They’ve improved inventory visibility — a customer can make sure an item is in stock by checking Wal-Mart’s site, then they can go to their nearest store to buy it,” she said. “The challenge now is to get people thinking of them as a low-price leader online and off.”

Morningstar MORN -0.65% director of consumer equity research R.J. Hottovy isn’t sure Wal-Mart’s infrastructure is what’s holding up its web growth but its enormous and growing network of brick and mortar outlets — 4,000 in the U.S. and counting.

“Wal-Mart’s done an okay job online, but Amazon’s done a great job,” Hottovy said. “They can undermine the price of a lot of their competition. Without a physical storefront presence and overhead, they can pass that savings directly to consumers.”

Hottovy added that Wal-Mart will have to do more than invest in infrastructure to win the battle of the web behemoths. They’ll have to woo customers who are loyal to Amazon for good reason. “Amazon has tied up price, convenience, sales, and good customer service,” he said. “That’s a powerful combination.”

Why a Botched IT Project Will Destroy a Major Corporation in the Near Future

The risks associated with major IT projects are being vastly underestimated, according to the largest study of global IT projects ever undertaken.

Back in 2003, the US clothing manufacturer Levi Strauss made the fateful decision to upgrade its global IT system. The project was budgeted at $5million and the advantages appeared huge. 

As Levi Strauss had grown into a global company, its IT system had become fragmented and antiquated, with different systems in operation in different countries. So switching to a single integrated system seemed eminently sensible. “But very quickly all hell broke loose,” say Bent Flyvbjerg and Alexander Budzier at the University of Oxford in the UK.

For example, the supermarket giant Walmart, one of its biggest customers, demanded that the new IT system connect seamlessly with its own supply chain management system. That created an entirely unanticipated set of problems.

Then, when the new system was switched on, the company discovered that it could not fulfill orders and had to close its three US distribution centres for a week. In 2008, five years after it began the project, the company took a $193 million charge against earnings to compensate for the problems and company’s chief information officer was forced to resign.

That’s one example of a nightmare scenario–a  botched IT project that forced a major company to its knees. But this kind of problem is much more common than you might imagine, say Flyvbjerg and Budzier, who have carried out the largest global study of IT change initiatives ever conducted. “We examined 1,471 projects, comparing their budgets and estimated performance benefits with the actual costs and results,” they say.


The results are eye-opening and should come as a warning shot for anyone in charge of major IT initiatives. Flyvbjerg and Budzier say that the average cost overrrun for an IT project is 27 per cent. That seems more than manageable for most companies.

But this figure holds a surprise because more than one in six of the projects these guys examined had a cost overrun of 200 per cent. 

“This highlights the true pitfall of IT change initiatives: It’s not that they’re particularly prone to high cost overruns on average, as management consultants and academic studies have previously suggested. It’s that an unusually large proportion of them incur massive overages,” they say.
In other words, the average cost overrun is an entirely inappropriate measure of the state of affairs and gives little indication of the true risks associated with IT projects.
  
The limitations of taking averages are well known in many areas of science. An average is only a useful figure when it is associated with certain distributions. For example, the height of fully grown men follows a so-called normal distribution for which an average is a useful description. However, it’s possible to calculate the average size of an earthquake but the figure is entirely nonsensical since it gives no indication of the size range of earthquakes which vary over many orders of magnitude. If building standards were based on the average size of earthquakes, they would fail to account for the huge devastation that big earthquakes can cause.

IT projects fall in to a similar category. Calculating the risk associated with an IT project using the average cost overrun is like creating building standards using the average size of earthquakes. Both are bound to be inadequate.  

These dangers have yet to be fully appreciated, warn Flyvbjerg and Budzier. “IT projects are now so big, and they touch so many aspects of an organization, that they pose a singular new risk….They have sunk whole corporations. Even cities and nations are in peril.”

They point to the IT problems with Hong Kong’s new airport in the late 1990s, which reportedly cost the local economy some $600 million.

They conclude that it’s only a matter of time before something much more dramatic occurs. “It will be no surprise if a large, established company fails in the coming years because of an out-of-control IT project. In fact, the data suggest that one or more will,” predict Flyvbjerg and Budzier.

13 Mobile Trends for 2013 and Beyond (April 2013) - see slide show

by JWTIntelligence on Apr 01, 2013

http://www.slideshare.net/jwtintelligence/13-mobile-trends-for-2013-and-beyond 

The mobile is moving well beyond its role as a communication device, becoming an enabler for a wide range of experiences from TV viewing to shopping to banking. And mobile connectivity is disrupting industries from retail to auto to finance and beyond. The consensus is that change is occurring at an astonishing scale and speed.

In this report, JWTIntelligence outlines key trends in evidence at the GSMA’s Mobile World Congress, held in Barcelona in late February, along with examples that illustrate these developments and implications for brands. The report also incorporates insights from interviews with several mobile experts and influencers.