Three brands on the rise:
McDonald’s—the Golden Arches is once again proving the resilience of its brand. In October, the fast food giant announced sales increases for the first time in two years, and credits reducing the number of menu items and improving order accuracy. (I suppose if they offered only one item, it would be impossible to get the order wrong. Just sayin’.) Their biggest move is too new to judge just yet—offering all-day breakfast. It’s hard to generalize about their product strategy, though. On the one hand, it’s less is more, but on the other, it’s more is more. But there has got to be a market for Egg McMuffins and hash browns after 11 a.m., especially for shift workers and college students.
Star Wars—one of the most successful movie brands ever continues to use the power of the Force to make bags of money. The promotion, merchandising and public relations for this seventh installment have reached levels not seen since, well, the sixth Star Wars movie. The holiday season timing is part of the masterful launch, but I particularly liked the hilariously bad celebrity auditions that ran on Saturday Night Live. A good box office surge will be enough to pass Harry Potter for number two all-time in the U.S. But number one, Marvel Cinematic Universe (Iron Man, Thor, Captain America, etc.), is more than a billion dollars ahead and safe for now.
JCPenney—a smaller quarterly loss than expected was upbeat news recently for JCPenney, the retail brand that has been trying to pull out of a nosedive made worse by its previous CEO. The brand has been able to consistently trim its loses over the last two years with the strategy of focusing more on its own brands of products, including St. John’s Bay clothing and Cooks kitchenware. Sales of its own brands now top 50 percent of revenue, and have reduced the red ink and buoyed the stock. Next step is to get to the black ink side of the equation.
Three brands falling fast:
FanDuel/DraftKings—Is it possible for a brand to grow too fast? If you watch pro football, you know it has been impossible to avoid the massive advertising and sponsorship investments of both FanDuel and DraftKings. Their high profiles and promises of big payouts have caught the eye of state attorneys general around the country, many of whom are claiming the product is really a form of gambling because of the chance factor involved. The brands have been forced to shut down in some states while they make elaborate legal arguments trying to prove they are substantially games of skill. Good luck with that. Oh, sorry.
Black Friday—a day on the calendar is an odd concept for a brand, since nobody owns it, but it’s a brand nonetheless. It stands for the official start of holiday shopping craziness and used to be a lighting rod of for retail brands to offer early store hours and specials to draw customers to their stores. Then the online world wriggled under the tent and started a competitor, “Cyber Monday.” Black Friday deals were soon moved back to the day of Thanksgiving and then even earlier, and as a result, the momentous day has lost significant momentum. Sales this year were off peaks of earlier years, while Cyber Monday continues the broader trend of online sales growth. Will we see more brands like REI take Black Friday off? Maybe a few, but there is still a lot of revenue and awareness being generated by the concept, even if many of the deals are becoming Black Friday-ish.
Volkswagen—ever since the startling announcement that VW had admitted to willfully using software workarounds to cheat on emissions tests, the brand has been in full defensive mode. And the bleeding hasn’t been entirely stopped, as more and more illegally equipped models of VW, Audi and other VW-owned brands continue to turn up. As does evidence of a more broadly-spread knowledge within the company that something fishy was going on. VW has begun “goodwill” payments to some of the affected owners, supposedly with no strings attached. But that money will be a drop in the bucket compared to what it will take to buy back the confidence of future buyers. Get ready for VW to lead the way with low-cost lease and financing offers. It will really be their only option.
As published in the Central Penn Business Journal, the Reading Eagle and Lehigh Valley Business.