Melbourne Herald Sun, 13th March 2010
Have a break have a ... soy-sauce-flavoured Kit Kat? Or how about a spicy wasabi-flavoured white chocolate Kit Kat? Sound tempting? I'm sorry but you won't find them at your local milk bar, not in this country.
Yes you've guessed it, where else but Japan could such a taste sensation happen - and be a huge marketing success.
In Japan, Nestle have taken line extension to lengths that are baffling to the more conservative Australian marketplace. They make Kit Kat in 19 flavours - like yubari melon, baked corn, green beans and cherries, and red potatoes. Now wouldn't they delight the kids' Christmas stockings?
But before you shake you heads and say, "They're mad," think on this. Kit Kat is now the biggest-selling confectionery brand in Japan. That's a lot of corn and potatoes, not to mention dough.
Nestle have always been flexible and innovative in their marketing. Fifteen years ago I wrote about their Relais Bebe (Baby Stop) program in France where holidaying families with babies could stop, feed their babies and have a free coffee and croissants - using, of course, all Nestle products. This was not just a one-off promotion - I see they now have 16 of them every summer.
The point is to get involved with the customer, think about what they need or desire, and think like a local. I can imagine that at HQ on the banks of Lake Geneva, Switzerland, wasabe Kit Kat would not be regarded as a good idea. Yet they let their Japanese subsidiary proceed with it, trusting their local people to know better than a distant warren of gnomes.
This is a difficult thing for a corporation to do, their instinct is to dictate. But the soft touch produces results.
Other companies are a little more cautious. McDonald's now allows the Japanese a Filet O Shrimp burger, and Pepsi gives them a cucumber flavored soft drink.
But marketing is more than product, it's distribution. Again Kit Kat have hit the jackpot. It appears that the phrase Kitto Katsu means "sure to win". This is a favourite slogan told to students about to take exams. Kinda like "Knock 'em dead kid!"
The Japanese being great gift-givers, they send their young ones off with a card and a box of Kitto Katsu bought at the local post office. Now their post offices are no more prone to selling sweets than ours are, but the marketing team managed to sew up a massive, 22,000 post office, nation-wide distribution deal. And with no competitors!
The Kitto Katsu campaign earned Nestle and their advertising agency, JWT Tokyo, the 2009 Media Grand Prix at Cannes.
Polyphenols are plant chemicals that supposedly work as antioxidants and preventers of heart disease and cancer. They are now the key ingredient in the highly popular Nescafe Excella - promoted through lyrical TV commercials starring Meg Ryan. She doesn't speak Japanese, but obviously they think she's healthy.
The company's latest initiative is a big marketing drive on the internet. They are pushing their range through Rakuten Ichiba, the largest internet >shopping mall= in Japan. It claims to have over 25,000 virtual shops, 40 million members and $8 billion in sales.
The lessons here are the most neglected truisms in business. When you hire somebody and give them a responsibility - trust them to do the job. Give them the freedom to innovate with products and markets. Sometimes they might make mistakes, but other times they will have spectacular successes.
After all, in your corporate ivory tower, what do you know about the average Japanese's tastes in chocolate?
Ray@ebeatty.com
13 March, 2010
10 March, 2010
Raking in the dough from fat
Melbourne Herald Sun, 10th April 2010
Now put down that doughnut and tell me the truth. Are you as fit and healthy and slim as you'd like? The sad fact, of course, is that very few of us are.
The Medical Journal of Australia has just warned us that obesity is costing this country $56 billion a year. And that's just the health side. Naturally we have to do something about it, as a nation. And as every businessperson knows, where there's muck there's brass. (Or maybe it should be where there's fat there's dough.) So what are the business opportunities?
Certainly over the past decade there has been rapid growth in the business of getting us slim. Figures from the Bureau of Statistics showed that the number of job vacancies in the health and fitness sector was at an all time high, in 2008. It was reported that personal training was growing, along with gym memberships, fitness club openings and sales of fitness programs, with a shortage of staff to run them all.
There are now nearly two million Australians using these fitness centres - and more are joining up every day. You can expect to see the pressure grow from state and federal governments anxious to reduce their health costs - not to mention the pressure from our fellow citizens anxious to reduce their spouses.
Fitness Australia, the industry's association, claims that the centres contributed $900 million to our economy two years ago, and employed 17,000 people, though 80 per cent of these were part time. Since 2004 it was growing at seven per cent a year.
But, as Peter Garrett learned when his insulation scheme revealed bats in the belfry, fast growth can have its problems. So it is with fitness. A trainee can go from scratch to a Master Trainer qualification in just eight weeks. It ain't exactly a medical degree. And it means that some people who achieve the status can be less than dedicated.
Fitness Australia calls them the 'cowboys'. The small, inadequate operations that promise far more than they deliver, and leave unhappy customers in their wake.
So FA run education and training schemes for exercise professionals who are registered with them, requiring them to keep up to date. Their member businesses have to follow a code of practice or risk losing the association's 'licence'.
One of their major headaches has been the bad publicity from dodgy banking practices. At the front end, there's often a team of attractive, young, enthusiastic sales people urging you to sign up and become as beautiful as they are. Who can resist a gorgeous slim blonde in shorts - whatever their sex?
But once you've signed the reams of forms they have your banking details. All well and good until you decide you want to leave. As the Consumer Association's Choice Magazine put it, "The gym's sense of urgency suddenly evaporates. You're forced to jump through the most outlandish hoops just to cancel a membership you should have every right to terminate over the phone."
Pressure from state and federal consumer affairs departments have improved the situation somewhat - but before you sign anything, read the fine print carefully.
The industry is now consolidating into a smaller number of large franchises like Fitness First, with nearly a hundred gyms; Fernwood with its women-only niche of 80 clubs; even that money bloodhound Richard Branston has sniffed the brass and started his Virgin Active chain.
Local councils have begun to charge trainers for the use of their parks and beaches, while the music industry is suing for a big hike in royalties for those endless Madonna and ABBA tunes.
Ah yes, once you're doing well, everyone wants a slice of the pie.
Ray@ebeatty.com
Now put down that doughnut and tell me the truth. Are you as fit and healthy and slim as you'd like? The sad fact, of course, is that very few of us are.
The Medical Journal of Australia has just warned us that obesity is costing this country $56 billion a year. And that's just the health side. Naturally we have to do something about it, as a nation. And as every businessperson knows, where there's muck there's brass. (Or maybe it should be where there's fat there's dough.) So what are the business opportunities?
Certainly over the past decade there has been rapid growth in the business of getting us slim. Figures from the Bureau of Statistics showed that the number of job vacancies in the health and fitness sector was at an all time high, in 2008. It was reported that personal training was growing, along with gym memberships, fitness club openings and sales of fitness programs, with a shortage of staff to run them all.
There are now nearly two million Australians using these fitness centres - and more are joining up every day. You can expect to see the pressure grow from state and federal governments anxious to reduce their health costs - not to mention the pressure from our fellow citizens anxious to reduce their spouses.
Fitness Australia, the industry's association, claims that the centres contributed $900 million to our economy two years ago, and employed 17,000 people, though 80 per cent of these were part time. Since 2004 it was growing at seven per cent a year.
But, as Peter Garrett learned when his insulation scheme revealed bats in the belfry, fast growth can have its problems. So it is with fitness. A trainee can go from scratch to a Master Trainer qualification in just eight weeks. It ain't exactly a medical degree. And it means that some people who achieve the status can be less than dedicated.
Fitness Australia calls them the 'cowboys'. The small, inadequate operations that promise far more than they deliver, and leave unhappy customers in their wake.
So FA run education and training schemes for exercise professionals who are registered with them, requiring them to keep up to date. Their member businesses have to follow a code of practice or risk losing the association's 'licence'.
One of their major headaches has been the bad publicity from dodgy banking practices. At the front end, there's often a team of attractive, young, enthusiastic sales people urging you to sign up and become as beautiful as they are. Who can resist a gorgeous slim blonde in shorts - whatever their sex?
But once you've signed the reams of forms they have your banking details. All well and good until you decide you want to leave. As the Consumer Association's Choice Magazine put it, "The gym's sense of urgency suddenly evaporates. You're forced to jump through the most outlandish hoops just to cancel a membership you should have every right to terminate over the phone."
Pressure from state and federal consumer affairs departments have improved the situation somewhat - but before you sign anything, read the fine print carefully.
The industry is now consolidating into a smaller number of large franchises like Fitness First, with nearly a hundred gyms; Fernwood with its women-only niche of 80 clubs; even that money bloodhound Richard Branston has sniffed the brass and started his Virgin Active chain.
Local councils have begun to charge trainers for the use of their parks and beaches, while the music industry is suing for a big hike in royalties for those endless Madonna and ABBA tunes.
Ah yes, once you're doing well, everyone wants a slice of the pie.
Ray@ebeatty.com
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