Posted by Pete Canalichio on Tue, Mar 09, 2010 @ 07:38 PM
Mary Remoue is responsible for all sales within the Official Olympic Superstore at The Bay in downtown Vancouver. Listen to what she has to say about their plans and her goals for the Games. The Coca-Cola Pin Trading Center was located within the Olympic Superstore.
Coca-Cola opened the pin trading center as part of its brand licensing program for the Vancouver Olympic Winter Games.
Posted by Pete Canalichio on Tue, Mar 09, 2010 @ 07:25 PM
Pete captured the last couple minutes of the Canada vs USA gold medal hockey game at the Coca-Cola Official Pin Trading Center inside the CTV atrium in downtown Vancouver. Hear as the anxiety builds as the USA team tries to score and the jubilation as Crosby scores the winning goal.
Coca-Cola opened the pin trading center as part of its brand licensing program for the Vancouver Olympic Winter Games.
Posted by Pete Canalichio on Tue, Mar 09, 2010 @ 06:40 PM
Below is my interview with Chris Gilliland from the Vancouver Airport Authority. Chris gives his point of view on the success of the Coca-Cola Official Olympic Pin Trading Center operated inside the airport during the Olympic Winter Games. All the pins sold at the Pin Trading Center were official licensed merchandise and were made with recycled metal.
Coca-Cola opened the pin trading center as part of its brand licensing program for the Vancouver Olympic Winter Games.
Posted by Pete Canalichio on Mon, Jan 11, 2010 @ 11:23 AM
An increase in brand value can help drive revenue growth through higher consumer demand, improve gross margin by commanding a premium on prices and reduce business costs through improved supplier agreements. One method of valuing a brand is to take the market value of a company (total shares of stock outstanding multiplied by the company stock price) and subtract the value of its assets (found on the balance sheet). Using this methodology, Coca-Cola ranks as one of the world’s most valuable brands. Consumers choose Coca-Cola billions of times per day because of its authenticity, refreshment, originality, consistency and taste. The more The Coca-Cola Company can improve consumer demand for its brands, the more consumers will consume their products. For Coca-Cola, more consumption translates into more revenue and more profit.
So here are my five strategies to improve your brand:
- Improve your understanding of what your brand means. Taking our first example, there are a variety of reasons why people choose to drink Coke. Many people drink Coke because of the way they are perceived by others. It has a certain “coolness” factor. Others drink Coke because they know they will gain social acceptance. Some drink Coke for the increase in energy it gives them. Still others drink Coke for its refreshment and great taste. By keeping abreast of how consumers perceive their brands, Coke continuously meets their consumers’ expectations. This enables the Coca-Cola brand to maintain tremendous brand value.
- Innovate your products to meet your consumers’ unknown needs. When Nintendo launched the Wii, they revolutionized the way people play video games. Nintendo created a product consumers hadn’t even dreamt of. In so doing, Nintendo not only delighted avid video game players they also converted millions who never played video games into Wii players. With games like Wii Sport and Wii Fit that enhance both skills and fitness, Nintendo eliminated the inactive aspect of video games – one of its biggest negative perceptions – and, in turn, permitted consumers hours of guiltless entertainment. Talk about a brand value builder!
- Stay solution focused. Product engineers and marketers are notorious for creating all kinds of new features for existing products. If the features, however, don’t provide a specific benefit that the consumer needs, or are not intuitive, those features may end up hurting the brand. Remember how hard it used to be to program a VCR? Conversely, a feature that meets a need can provide tremendous value to a brand. When the makers of Sharpie finally developed a retractable Sharpie (the feature) that could be operated with one hand and not dry out (the benefits), they delighted millions of brand loyalists enhancing their already high brand scores.
- Pay attention to the details. There is nothing more exciting for consumers than when they buy a product that exceeds their expectations. That is why I love driving my Acura MDX. It is an SUV that drives like a car and offers so much more. The instrument panel is simple to read and easy on the eyes making driving safe and enjoyable. The four-wheel drive keeps me moving in all types of terrain. The blue-tooth audio provides perfect communication clarity. The vehicle seats seven comfortably or the rear two rows of seats can be folded down to haul as much stuff as a pickup truck. I could go on and on about my MDX, but more than anything it is the attention to detail put into each of these features that makes me thrilled to be an Acura owner.
- Be consistent and reliable. In thousands of restaurants all around the world, people consume McDonald’s burgers and fries millions of times a day. The fries they eat in the morning taste just like those they eat at night. The Big Mac they buy in Beijing is delivered to them in the same amount of time as the one they buy in Baton Rouge. The menu board, the restrooms and the seating area look the same in every restaurant. For this consumers reward McDonald’s with their patronage more than any other fast food restaurant. And, while McDonald’s food usually does not rank first in taste, they consistently rank first in market share and revenue. When consumers can trust that their brand experience will be the same every time, they will value that brand more and more over time.
- Stay passionate – Ok, I lied. There are six strategies for building brand value. The last strategy is to let your passion shine through in everything you do. Consumers love brands whose owners are as passionate as they are. That “never rest on your laurels” attitude translates into exciting and superior products that continue to wow and delight consumers. One of the reasons people love the Apple brand so much is because of the passion expressed by Apple employees. Despite being the little guy, Apple enjoys going toe-to-toe with Microsoft. As a consequence Mac users revel in the controversy. As a result, there is no other computer or mobile technology brand as loved as Apple.
Posted by Pete Canalichio on Sun, Dec 20, 2009 @ 02:28 PM
ATLANTA - We caught with licensing expert Pete Canalichio to answer a few email questions about the current licensing climate.
BrandlandUSA: What opportunities are companies missing in the licensing of brands?
Canalichio: The biggest opportunity in my opinion is that there are so many companies out there with great products or services that don’t even have a clue about what brand licensing is, or if they have heard of it, they don’t have the faintest idea how to get started licensing.
My company’s mission is to help companies harness the power of brand licensing. We do this by offering training modules from our web site brandlicensingexpert.com, workshops and hands-on consulting. Our Brand Licensing 101 module is scheduled to launch January 2010. We also are wrapping up a two-day workshop which will immerse business professionals on the basics of brand licensing. The workshop offers lots of examples of good and bad brand licensing and provides a terrific case study for practical hands-on experience.
BrandlandUSA: What brand do you think is most underutilized in licensing and how could the company better take advantage of it?
Canalichio: Wow! That’s a tough one. There are so many terrific brands out there that have not fully harnessed the power of brand licensing. When I was at Newell Rubbermaid, there was a concerted effort to utilize licensing as a means to extend the company’s portfolio of brands. Some of the brands Newell Rubbermaid owns include Rubbermaid, Graco, Calphalon, Sharpie and Waterman.
While all of these can benefit more through licensing, I would say Sharpie and Waterman have the biggest opportunity to use licensing to extend into other categories. Both Sharpie and Waterman mean so much more to their consumers than just being a writing instrument or a way to communicate.
BrandlandUSA: I believe that many companies miss out on licensing opportunities because they see the licensing in revenue terms, and not exposure. Do you agree?
Canalichio: Absolutely! So many companies fixate on the bottom line benefits and ignore the real value that comes when the brand connects with the consumer through new and unique categories of products. Let’s take my Waterman example above. Right now, Waterman makes a line of high end writing instruments. Given their price point, the total number of Waterman pens in the marketplace is relatively small. Since many people only use a Waterman pen for special occasions the brand is limited in the number of times per day that it interacts with its consumers.
If Waterman were to launch a line of luxury items such as I mentioned above, then the brand would begin to interact with consumers through each new product category. Think about the number of times someone looks at their watch each day. Every one of those times would create a unique occasion to connect with the Waterman brand. Of course, more product categories also means more shelf space and more retail outlets.
BrandlandUSA: You are a former Navy pilot and Naval Academy grad. Is the U.S. Navy utilizing all the opportunities it could for licensing?
Canalichio: The US Navy is another one of those brands that evokes deep and lasting emotions. I have been impressed with the way the Navy has transformed its motto from the old “join the Navy and see the world” to a brand that represents excellence, strength, service and technology. I get goose bumps every time I see the US Navy ads showing their sailors standing at attention on the deck of an aircraft carrier as it makes it way over the high seas. It makes me proud to have served and I am deeply grateful that our military is staffed by all volunteers.
For these reasons, I believe the U.S. Navy could use licensing to expand the brand into many new categories. I’m sure the Navy has thousands of artifacts, models, pictures and paintings dating back to the days of John Paul Jones. How about offering those up to be licensed?
BrandlandUSA: How much is the average licensing deal these days?
Canalichio: In my experience the average licensing deals have been trending smaller in deal size over the past decade. There will always be those multi-million dollar deals that attract all the media attention. However, I believe licensors are getting smarter and licensees are getting more specialized. This means licensors are marrying the deal size to match the strengths and capabilities of the licensee. In the past licensors would grant a licensee an entire region (the United States) and multiple channels (mass, department stores, specialty, etc) in a particular category. Moreover, that category typically was broadly defined.
Now licensors are saying to the licensees, “Your strengths are limited to the Southeast United States and specifically in the club channel. That’s where we will grant you rights to license our brand.” In addition, licensors are defining the category more precisely. As an example, a licensee today may have the product category defined as “tee shirts made from organic materials”. All this translates into smaller deals in terms of guaranteed royalty revenue, but many more of them.
BrandlandUSA: What was your favorite licensing project?
Canalichio: My favorite licensing project and one I am most proud of was a project I managed when I worked for Coca-Cola. In the late 1990s, Coke was a sponsor of a number of NASCAR drivers including Dale Earnhardt. Dale for the first time was going to race against his son, Dale Jr. in a Winston Cup race at the Coca-Cola 500 in Tokyo. To commemorate the event Coke decided to put Dale in a Coca-Cola red racing car (as NASCAR fans know, Dale always drove a black car) and Dale Jr. in a black Polar Bear racing car. We lined up a series of licensees and developed a tight line of products including die cast, drinkware and apparel including jackets, tees and caps. The merchandise created was perfect for the event and fans were clamoring for it. In the span of about 2 months we sold almost $30 million of merchandise. This turned out to be one of the most successful licensed programs of its kind every created. Needless to say, there was value created for all constituents – NASCAR, Dale and Dale Jr., Coca-Cola, the licensees, the retailers and most importantly the fans. I would bet almost every fan who bought that Coca-Cola Dale Earnhardt/Earnhardt Jr. merchandise still have it today. If they ever consider selling it, I am sure it would fetch a much greater price off than what they paid for it.
BrandlandUSA: Being from Atlanta, have you been to the World of Coke lately?
Canalichio: Actually I went to the new World of Coke with my wife and her cousin, Elizabeth about a year and half ago. Coke has done an amazing job transforming the World of Coca-Cola concept from an old “museum like” experience to a full-blown attraction. The World of Coca-Cola connects consumers in a fun and informative way with the brand. How many brands can create an attraction to themselves and get people to pay an entrance fee? By the way, the four of us had a blast interacting with the Polar Bear, watching the different movies and sampling the kaleidoscope of beverages from all around the world. Of course, we topped it off with some great shopping in their Everything Coca-Cola store.
Find out more at www.brandlicensingexpert.com.
Posted by Pete Canalichio on Mon, Nov 23, 2009 @ 02:36 PM
In a stunning blow to the prosecution, jurors took only nine hours to acquit two former Wall Street fund managers in the only major criminal case to emerge from the mortgage meltdown and financial crisis. According to the Los Angeles Times (November 11, 2009) Ralph Cioffi and Matthew Tannin, former mortgage-bond hedge fund managers at Bearn Stearns, were found not guilty of securities fraud. Federal prosecutors who had hoped to pin Cioffi and Tannin as the perpetrators in the downfall of Bear Stearns (now owned by JP Morgan Chase) and set a precedent against other Wall Street bankers were left shaking their heads at both the jurors’ decision and the pace in which it came.
At the heart of the case were the defendants' e-mails, including one in which Tannin said the subprime market "looks pretty damn ugly." Tannin went further to say, "There is simply no way for us to make money -- ever." The prosecution, which hung their case on incriminating emails like these, also showed the jurors emails written days after where both men informed their management that the hedge fund, in fact, could survive. Nevertheless, jurors said the evidence wasn't strong enough and that Cioffi and Tannin were doing everything they could to keep the hedge fund above water. Juror Aram Hong noted, "Just because you're the captain of a ship and it gets hit doesn't mean you should be blamed."
With the acquittal of Cioffi and Tannin, federal prosecutors must now determine what if anything they can do to salvage the remainder of their Wall Street cases. Without corroborating data or witnesses to support e-mail evidence, similar cases if tried would likely be found without merit. The fact is America’s investment banking firms were built on strict discipline, sound judgment and prudent risk management. It is these principles that enabled institutions like Bear Stearns and Lehman Brothers to grow and be profitable for more than eighty years. There is no evidence to suggest that fund managers en mass began ignoring their firms’ established trading guidelines or purposefully strayed beyond the boundaries of proper funds management. The truth is that no one could predict the 2008 implosion in the financial markets, nor is any one person responsible for its occurrence. Often times events that occur cannot be foreseen or remedied with our current set of tools or knowledge. When I flew for the US Navy, we used to say that our flight procedures were written in blood. This was because people often died from aircraft malfunctions before proper emergency procedures could be written. I learned one harrowing night after I nearly lost my airplane and crew from an engine fire that I could not extinguish – after properly implementing the existing emergency procedures – exactly what "written in blood" meant. It turns out one of my aircraft’s four engines suffered a catastrophic oil loss which ignited a fire in its turbine section. Fortunately, my crew and I survived the emergency and a new procedure was written for this particular malfunction.
As we consider the financial crisis of 2008, the bigger story emerging might be just how damaging this acquittal could be to the Obama administration. With attempts to pin the blame for the financial crisis on failed Bush policies and scores of "rogue" Wall Street traders, the jurors’ decision that selective e-mail evidence not only was inconclusive, but arguably supportive to the defense, makes the Obama case against Bush’s policies hollow and without merit. With Democratic Party loses for governor in Virginia and New Jersey, the Obama administration can hardly absorb another political setback as it enters the 2010 mid-term elections.
With this acquittal of Cioffi and Tannin, perhaps we should stop placing blame for the financial meltdown and subsequent recession on the prior administration or on Wall Street and begin to focus our limited resources on finding ways to emerge from this crisis smarter and stronger. Having proper safety procedures in place to preclude banks and insurance companies from taking on too much risky debt is a great place to start.
Posted by Pete Canalichio on Mon, Nov 02, 2009 @ 10:39 AM
Former AIG head begins anew with C.V. Starr:
According to the NY Times (October 27, 2009), Maurice Greenberg, the former CEO of American Insurance Group (AIG) has been quietly hiring employees from AIG to fill posts at his new insurance company, C.V. Starr. Greenberg, who built AIG over the past four decades into the world's largest insurance company with $1 trillion in assets, was ousted in 2005 over an accounting scandal brought about by a complaint issued by Eliot Spitzer, former NY Attorney General. Greenberg maintained his innocence throughout the investigation and all criminal charges were subsequently dropped. Since then Greenberg has been battling AIG over stock in which they both laid claim. AIG in the meantime suffered staggering losses from the trading of complex derivatives by its financial products unit and was on the verge of insolvency last year when the federal government decided to step in and save it. With the demise of AIG Greenberg lost nearly all of his life's savings.
This past summer Greenberg finally won his suit against AIG and reclaimed the rights to $4.3 billion in retirement funds. Instead of using his money to live out his golden years, Greenberg who is 84 has been redirecting the funds to recreate another AIG. With the Treasury recently setting employee compensation limits on companies which have received bailout money, Greenberg is now in an even stronger position to lure away AIG's best talent to help run C.V. Starr. As the largest investor in AIG, the government (and taxpayers) stand to lose billions if AIG fails to recover. Greenberg, who is AIG's second largest shareholder, is similarly exposed. For this reason, it doesn't make sense for Greenberg to want to hurt his former employer.
One can't help but admire the resiliency of Greenberg to start over at such a late age. What motivates an eighty-four-year-old billionaire to do such a thing? Clearly it is not the money. There are arguably other driving factors. Perhaps Greenberg feels like he has something to prove to those who claimed he was responsible for the demise of AIG. No longer at the helm, Greenberg cannot direct AIG back to profitability. Moreover with the government calling the shots on how AIG should be run, Greenberg would likely feel suffocated by the oversight if given the opportunity. With C.V. Starr, Greenberg can demonstrate to those who doubted and accused him that he still has what it takes and had he been at the helm last year, AIG would have weathered the storm. And why shouldn't we expect Greenberg to hire his former employees? Who in the business world doesn't invoke this strategy whenever they are able? Going with loyal proven performers just makes good business sense, especially when they can be picked up at bargain prices.
Greenberg may be building C.V. Starr to silence his critics, but I don't think so. I believe Greenberg is building C.V. Starr because that is what he was born to do. Greenberg knows insurance undoubtedly better than anyone else on the planet. Nothing energizes him more than to discover new ways to unlock value by mitigating the risk of others. Had he not been ousted from AIG, he arguably would be there today fulfilling his life's calling. Recreating AIG through C.V. Starr is not an option for Greenberg. Rather, it is simply part of his life's work. Incidentally, C.V. Starr is named after AIG's founder, Cornelius Vander Starr who hand-picked Greenberg in 1968 as his successor.
Posted by Pete Canalichio on Sat, Oct 17, 2009 @ 11:42 AM
The DJIA rose above 10000 on October 14, stayed there for a day, and promptly dipped below the psychological threshold after IBM, Bank of America and GE's third quarter earnings disappointed investors. Still, the DJIA has risen 53% since hitting it's low of 6547 on March 9 and is up 14% this year. The run up, driven by better than expected earnings over the last two quarters, is hardly a resounding statement about the health of these business or the economy overall. The truth is that the earnings bar was set so low that it was virtually impossible for companies not to beat it. And while corporate profits are up, the improvement is primarily due to short term cost cutting programs and not from top line growth. For companies to continue to beat market estimates, they must find a way to increase sales, which is heavily dependent on consumer sentiment.
Many consumers are feeling more optimistic as the increase in the stock market has taken some of the sting out of the huge losses in their IRA's, 401k's and other personal investments. However, a continued acceleration in the stock market and a rebound in the economy is unlikely without an improvement in retail sales. Consumers still feeling the pinch in their wallets due to reductions in salaries and layoffs are continuing to look for ways to make due with less. With oil hitting $78 per barrel, a surge of 9% for the week, many consumers are having to cut back even further to offset the increased costs to operate their vehicles and heat their homes as we head into the winter months.
To make matters worse, many homeowners who could have saved hundreds of dollars per month by refinancing their mortgages or buying new homes - to take advantage of historically low interest rates – have been unable to do so because of low appraisal values. Recent changes in the real estate appraisal laws under the Home Value Code of Conduct instituted May 1, 2009, now require brokers to use an independent third party to select an appraiser. These appraisers who no longer have a connection to the mortgage brokers are making conservative appraisals to protect their jobs. Homeowners who believed they had plenty of equity are finding that their homes have been appraised at insufficient values to qualify for the loan. Instead of freeing up their cash, which could help to stimulate the fragile economy, homeowners are forced to live with the status quo. Those who hold adjustable rate mortgages face an increase in costs as impending inflation means a certain rise in interest rates further exacerbating the problem.
All this adds up to a rocky road for the economy as we head into the holiday season.
Posted by Pete Canalichio on Thu, Oct 08, 2009 @ 12:06 PM
Robert Zoellick, President of the World Bank, believes America's days as an unchallenged superpower are numbered and the US dollar will lose favor to the euro and the Chinese renminbi (NY Times, September 28, 2009). Whatever Mr. Zoellick's motivation in making such a statement, the implications if he is correct could be staggering for the United States.
As the world's main reserve currency, the US dollar trades or figures in transactions ma Save ny billions of times per day. Governments, successful businesses and wealthy individuals keep excess cash in dollars because these can easily be converted into euros, renminbi, rupees and rubles. The dollar's preferred status enables the US Treasury to issue dollar denominated treasury bonds, which are gobbled up by the Chinese, Germans and Japanese – countries that run a significant trade surplus. This is very desirable for the US as it finds itself needing to borrow more and more money to offset its ever-growing debt. With the Obama administration’s response to the current economic downturn, US debt levels are likely to grow even larger. If the world's creditor nations ever choose to reduce their holdings of US dollars or bonds, Mr. Zoellick's prediction could come to fruition.
While the euro has virtually eliminated the challenges of currency conversion, and has simplified internation commerce among the EU's member nations, it still does not offer a riskless alternative to the dollar as a reserve currency. Anti-dollar proponents may argue that the euro clearly has helped to strengthen European economies and to raise the standard of living throughout the continent. However, the euro only gained legal tender status in 2002, and is yet to be tested over significant periods, or in a variety of economic crisis situations. For these reasons, the euro is not a strong candidate to supplant the US dollar.
The argument against the Renminbi becoming the world’s reserve currency is even stronger. Before the renminbi can assume a greater role among the world's currencies, the Chinese government would have to allow it to fluctuate freely on the world market. But we know that if the Chinese government were ever willing to allow the renminbi to trade freely, it would immediately strengthen vis-à-vis other world currencies, thus severely impacting the strong emphasis on exports that dominates Chinese economic policy. With a stronger renminbi, Chinese goods and services would become more expensive in world markets thus reducing exports and slowing an already fragile Chinese economy. Therefore, before China can seriously consider untethering its currency, it must find a way to increase domestic consumption. This is not something that is likely to happen in the short or even mid-term.
In The Tipping Point, Malcolm Gladwell tells us about a magic moment when an idea, trend or social behavior crosses a threshold, tips, and spreads like wildfire. In the hands of Connectors, Mavens and Salesmen, social epidemics can suddenly tip. According to Gladwell, Connectors are people with a special gift for bringing the world together. Mavens have the knowledge and the social skills to start word-of-mouth epidemics, and Salesmen have an uncanny ability to persuade others with subtle and seemingly effortless connectivity. So, the bigger question is not whether creditor nations will choose to reduce their holdings in US dollars in favor of the euro or renminbi, but rather is Robert Zoellick a Connector, Maven or Salesman? While Mr. Zoellick may possess capability in all three areas, his experience and expertise make him an excellent candidate to be a Maven.
If Mr. Zoellick's prognostication begins to take hold, other Connectors, Mavens and Salesmen may begin to agree and spread the message. Suddenly nations, businesses and individuals might choose to convert their local currency into euros or renminbis instead of US dollars. If this happens, America's days as an unchallenged economic superpower and the US dollar's role as the world's reserve currency could well be numbered.