Move over coffee... it's Tea Time in São Paulo

Yesterday, I took my Family to have lunch at Ping Pong, the London-based restuarant group, which just opened its first international operation here in São Paulo. Wonderful dim sums, friendly staff, cub-perfect lounge music and an urban cool project by Swiss Architect David Marquardt from MACH Architektur.

One of the highlights is a great array of teas offered at Ping Pong. In fact, in a country where coffee has cult status, it's amazing to see how teas are becoming the thing. I guess it all started with Carla Sauressig's Loja do Chá carrying over 250 types of tea - a franchisee of Germany's Tee Gschwendner - with two stores in São Paulo and one in Brasília. Now, some of the food emporiums have sections dedicated to teas from around the world.

Ping Pong, which is also serving the famous flowering teas, will certainly cater to a growing tribe of tea-lovers in a city dominated by café culture.

Wash your hands please

I love seeing how some companies are fast to identify a cultural movement and quickly transform an opportunity into a business proposition.  

With growing public awareness and concern around swine flu, it's amazing to see the proliferation of hand sanitizing units.  For the past few weeks I've been seeing them all over.  Only today, I saw one in a parking garage, next to the elevator in my office building and coming out of our cafeteria.

For marketers it's a reminder of how any cultural manifestation creates opportunities for new products, services or the comeback of an old idea.

Observing street vendors

Every Sunday coming home back from golf, I drive  through a busy intersection where a street vendor 'owns' that specific corner.  I've been observing how we works and it's amazing how much you can learn from the guy.  I noticed that he has a primary product he sells:  car chargers and mobile phone accessories in general.  Today, as he approached my car, he saw I had a BlackBerry on the passenger seat. He immediately pulled a car charger and said it was for my phone.  This all happens in a split second.  He has to work fast during the 3 minutes while the traffic light is red.  You can't get faster customer service than that.

It's interesting to see that he also operates with a helper who sells occasional products according to the calendar and season. A few weeks ago, during the Sao Paulo soccer finals between Corinthians and Santos, his helper was selling flags for fans on their way to the stadium (when I asked him how many flags he had sold by 12 noon, he said 30).  Today, it was Mother's Day here in Brazil, so sure enough, they were selling red rose bouquets.  Similar to what we do back at the office with limited-editions or with our promotional calendar.  However, street vendors change product inventory at incredible speed.

These street-smart salesmen are the very best in their craft.  Thousand of hours in the heat and rain, interacting with millions of drivers has made them hyper-sensitvie to what sells and what doesn't, flexible to adapt and change their product offerings according to what's happening in pop culture. Whether it's carnival season or there's a Madonna concert coming up or the Brazil National Team is playing on Sunday, these guys don't miss a beat.  They know that having something different to sell and being relevant to what is going on, means a better chance to increase their daily income.  

I'm sure there's a lot we can learn from street vendors.  I'll continue my observations next Sunday... 

Music as a beautiful metaphor

Last night at a business offsite in Argentina, I participated in an amazing experience.  After an extensive day, we were led to a large room where members of a symphony orchestra were already seated.  We were asked to sit in chairs placed right next to the musicians.  I chose to sit next a cello since that is the instrument my elder daughter is learning at school.  At this point, a maestro introduced himself as Roger Nieremberg and took us through a beautiful musical journey.  However, this was not a regular concert.  

Throughout the evening, Mr. Nieremberg explained how everything we are hearing and observing was actually a great metaphor for a business organization.  The conductor led the musicians through a series of carefully crafted exercises that helped illustrate how each group of instruments harmoniously functioned within the orchestra and how the role of the maestro was to provide his personal vision of how the music should sound. He talked about how the same can happen in organizations, where functional teams also have to work together and how leaders must create a vision and inspire. 

I was struck by how much non-verbal communication goes on between the maestro and the musicians.  That any orchestra can perform without a conductor but how it takes an inspiring maestro who is passionate and engaging to transform ordinary classic music into a truly magical symphonic experience like I've never had before.  

Yes, leadership can be demonstrated in an innovative way.  An evening that only proves how, many times, it takes a beautiful metaphor to make an emotional connection on a theme that is so part of my day-to-day.

Click here to learn more about Roger Nieremberg and his Music Paradigm concept.

Dreadful news, a few days in NY and a bowl of oatmeal

I'm in New York this week to attend a few seminars as part of Advertising Week. To be honest, after what happened to the financial markets last week, it's probably not the right timing to be listening to panels on self-regulation or the opportunity of social networks on advertising. On the other hand, I must say that the credit crunch that is threatening to throw the economy in a deep slump, also creates a unique opportunity for brands that can provide a sense of comfort and trust.

I guess I was one of the first to have breakfast this morning here at the hotel anxiously reading the Wall Street Journal to try and make sense of what's going on in the world. I ordered a bowl of oatmeal and honey, which I rarely do. It was only after breakfast that I thought it was probably because in times of uncertainty comfort food feels just right. It's certaintly an opportunity for companies that provide little moments of comfort and pleasure.

I wonder what changes in consumer behavior we will be seeing in the aftermath of the economic crisis and which marketers will be able to convert a potential downside into opportunities?

Making it easier for kids to use their closets

Every morning my daughters struggle to get clothes out of upper shelves of their closets.  When my wife and I are not around, they climb on the shelves which is obviously dangerous and will end up damaging the closet.  

Why isn't there a kids closet that uses ladders like the ones found in libraries?

 

I googled 'kids cabinets' and found no reference.  It seems like a rather obvious idea.

Spend a day out of the office

Last month, I asked my entire marketing team to spend a Friday out of the office.  I didn't ask them to stay at home but to spend the day in Campos do Jordão, a winter resort close to São Paulo. Similar to what happens in other winter destinations, Campos becomes a perfect setting for Brazilian companies to showcase their brands to an affluent and influential demographic. I had been there a few weeks earlier and was impressed with the amount of brand activation initiatives, from lounges sponsored by tobacco companies, to an insurance company teaching kids about street safety, to a baby food company offering a nice space for moms to feed their kids. I asked them to learn from what they saw and report back.

The experience was awesome.  It's fascinating what people can experience when they get out of the office comfort zone.  We have to do this more often.

Making urban areas a little greener

Walking through Lausanne last week-end I saw a building with a green roof.  I didn't have my camera with me but I did find this photo of the building posted on Flickr by MisterMeta.  

It made me think of how metropolitan areas could do a better job creating incentives for those who create green roofs.  Researching the subject online I found out that in Germany it is a legal requirement to include green roofs on new flat-roofed buildings in order to compensate for plant life destroyed by construction.  More than the aesthetically-beautiful appeal, roofs with grass, bushes and trees can absorb up to 50% of storm water, reduce CO2 emissions, improve insulation and enhance biodiversity. 

One of the world's most amazing green roof buildings is the Acros Fukuoka located in Fukuoka City, Japan. Stunning garden terraces up to 60m from the ground with 35,000 plants representing 76 species.

In the same spirit, New York has a fantastic project of re-greening the High Line.  The High Line is an elevated railway that snakes around Manhattan's west side built during the Depression and has been abandoned for a few decades.  It is slowly being transformed into an urban walkway full of grassy paths, gardens and trees.  I read that the first section, from Gansevoort Street to 20th Street, is scheduled to open at the end of the year.  

Click here to read more on www.thehighline.org.  

With the expansion of urbanization, I hoping green roofs will eventually become a global movement.

Why do bars charge for water but give peanuts for free?

Last night I bought a book at Heathrow Airport on my way back to Brazil. It's called The Economic Naturalist - Why Economics Explain Almost Everything, by Robert H Frank. Half way through the book and I immediately got hooked on how the author presents basic economic principles using fun day-to-day situations. The book takes the reader on an interesting journey on why many strange things we find in everyday life actually make perfect economic sense.

The narrative is carried out through intriguing questions. One particular question presented was very useful for me: "Why do many bars charge customers for water but give them peanuts for free?" One of the product categories we have in our portfolio in Brazil is snacks. Over the years we haven't had the same success in bars like we have in other channels. So, I was obviously intrigued by the question. This is how the author answers it...

"The key to understanding this practice is to recognize that the terms on which bars offer water and nuts are dictated by the effect of these commodities on demand for bars' core product, alcoholic beverages. Nuts and alcoholic beverages are compliments. Someone who eats more nuts will demand more beer or spirits. Since nuts are relatively cheap and each alcoholic drink generates a relatively high profit margin, making nuts free available tends to increase bars' profits. By contrast, water and alcoholic beverages are substitutes. The more water bar customer drink, the fewer alcoholic beverages they will order So even though water is relatively inexpensive, bars have an incentive to set a high price for it, thereby discouraging its consumption."

It seems obvious, but I believe marketers (including myself) do not always work so intensely on trying to find channel insights as much as we do when it comes to consumer insights.

The book is fascinating to understand how almost everything that happens around us can be explained through economics.  Cool stuff.

Experimenting with an online collaboration panel

Marketers all over the world are debating, re-thinking and identifying more effective ways of gathering consumer insights on an on-going basis, instead of using traditional research methods that gather input at specific moments of the marketing process.  About a year ago, inspired by a conversation with some people at IBM Brazil on the boom of web 2.0, I came back to the office and asked my team how we could adopt a more collaborative approach to brand management using the learnings from social networks.  Millenials already use social networks to interact on an infinite number of themes from the indie rock scene, to what's hot in tech gadgets, to discussion boards on video-gaming.  

Could we create a social network-type environment with college kids that have an interest for marketing to help us craft the future of our brands that target Brazilian millenials?

After talking to one of the country's hottest consumer research company, we found out the answer was yes.  Last month we launched an exciting initiative that has the potential of transforming the way we engage with one of our toughest demographics.  We put together an online consumer panel with 40 college students from around the country, carefully selected.  It has been an amazing lab into better understanding how these kids react to the weekly brand stimulus we post for their evaluation.  A much deeper and engaging experience versus focus groups or qual studies.

Photos that show how people relate to product categories

For marketers who like to see how everyday people see, relate and (in a certain way) feel about different product categories, an interesting desk research is flickr™ Groups.  Browsing though some of the groups was a great opportunity to observe what's on people's radar.  I'm assuming that for someone to go through the trouble of taking a picture and posting it, there has to be something interesting about it. One of the groups I found was called 'Japanese Snacks' with 508 members and over 2,000 photos posted.  I've always loved Japanese graphics and packaging.  It was fun looking at 'The Coffee Cup' a group with 1,162 members and about 2,300 photos.  'Brand, Marks & Logos' with over 9,300 photos is also worth browsing.

For those with a keen eye in search of insights, I'm sure there's always something to learn. 

A Love for Potatoes

We spent Sunday in London on our way to a week vacation in Barcelona. We went to visit the Marylebone Farmer's Market (a great way to get a feel for the relationship of local farming with its community) and we met this potato farmer with a stall called The Potato Shop. Because I'm in the potato chip business, I couldn't resist to speak to him. It turns out that this guy has developed 22 varieties of potatoes, from family favorites like King Edwards, Desiree to the organics Nicola, Lady Balfour to the rare Pink Fir Apple or Blue Kestrel (he needs to update his sign that mentions only 12). He has traveled through the Andes to find unusual varieties. It made me think about the trend of specialization and how, different than large corporations that benefit from scale and productivity, little companies have a wonderful opportunity to offer variety and be the very best in a very specific niche. To become the absolute, undisputable authority in a defined micro-segment. From gourmet chocolates, to rare beers from microbreweries, to oriental teas... the world is seeing a proliferation of hyper-specilaized retail concepts that build their positioning on this trend.

Little Things That Make a Mac... a Mac

It's amazing how sometimes children have the ability to recognize simple things that make a world of difference.  At home, like thousands of other homes, we have a PC (as a back up for work-related stuff) and a MacBook (which I use as my primary computer).  That means that my daughters end up using the PC  when they want to read the latest on Hanna Montana.  Last night, my 6-year old, feeling frustrated with having to reboot after something went wrong, turns to me and asks: 

"Why is your computer easy to start and this one takes so long?"  

At the end of the day... the devil is always in the details.

This is the Best Time to be a Marketing Professional in Brazil

After almost nine years living and working abroad, I'm very happy to be back in Brazil in a time when the Brazilian economy is hotter than ever. Practically all the key economic indicators are strong and the overall feeling, here in São Paulo, is that this is a market ready to accelerate growth. In 2007, employment reached the highest rate in four decades, trade surplus was US$ 40 billion, inflation is under control, and the stock market reached the highest market cap among emerging markets. Last year alone, there were 64 IPOs generating US$ 56 billion that are fueling the economy.  

A number of Brazilian companies are rapidly expanding into global markets, companies like...

Vale and Gerdau taking advantage of a hot commodities market

Petrobras becoming a world leader in ethanol

Sadia and Perdigão selling poultry in markets from Dubai to Moscow

JBS-Friboi acquired Swift to become the world's #1 meat producer

Marcopolo manufacturing buses that run all over the planet

Embraer supplying the world with regional jets

The opportunity for seasoned marketing professionals is phenomenal. One of the challenges, is to take successful business models that have made Brazilian companies strong locally and adapt them for global expansion. Another fascinating, yet tremendously challenging, opportunity is to re-coneptualize and invest in Brazilian consumer brands that have the potential of making a connection to global consumers... so that in the long-term, these brands can be recognized and admired outside of Brazil. Good examples are Havaianas®, H.Stern®, Brahma Beer®, Fogo de Chão® Steak Houses ... but there are just a few. This is where Brazil could borrow a page from South Korea's marketing book. The opportunities are amazing, especially in a positive economic environment like the one Brazil is living in now.

This is definitely the best time to be in Brazil.

The Challenge of Taking a Product Experience and Making it Convenient

It's very hard to replicate a food or beverage experience in a ready-to-eat or ready-to-drink format. There's a special ritual behind the preparation of a café latté, a wood-fired pizza or a brazilian caipirinha that becomes a tremendous challenge for companies that want to offer a convenient ready-to-consume version. From a simplistic standpoint, why not offer consumers their favorite food or drink from a supermarket shelf so they can have it in the comfort of their home anytime they want? The truth is, it's much more complicated than that. The reason is that consumers want the experience... the ritual of watching the barista, pizzaiolo, barman romance their craft... the customization of "skim milk please" or "add some kalamata olives" or "brown sugar instead of white". Customization makes people feel special and the good news is that, many times, they're willing to pay a premium for those little indulgent moments.

Which takes me to my neighborhood deli. This morning, I saw a cooler selling a product I hadn't seen before: sachets with ready-to-drink caipirinhas, called One®. The sachets come with different fruit versions from traditional lime to passion-fruit to mixed berries in either vodka and cachaça. Great packaging graphics, good communication of what the innovation was all about and a cool website. I like how they have found an innovative way to market a Brazilian classic. However, I can't avoid to be a little skeptical on whether this is a big idea or a niche. From a personal perspective, when I'm entertaining guests at home, I love the ritual of preparing caipirinhas with different combinations and hard-to-find cachaças. It makes the moment special. So I'm guessing I'm not the target. There could be potential, not only from Brazilians who value convenience, but as a great export product considering that non-Brazilians are less used to preparing the cocktail.

Watch's Next?

I've noticed more and more people around me who are not wearing watches anymore and reaching for their mobile phones to check time. Have you noticed the same?  Phones have become calendars, address books, cameras, SMS devices, portable search engines, MP3 players, calculators, e-mail, the fastest way to check your stocks ... so it's not surprising that it's substituting something as trivial as a wrist watch. 

The interesting news is that manufacturer's are finding innovative ways to reconceptualize the traditional watch by adding new functions and value-added services.  One example is Garmin® with a line of high-performance personal trainers (it wraps around your wrist but they're not even calling it a watch) with GPS receivers. Athletes can upload workout data to a website to analyze and track performance and even share running routes with friends. As a skier, I was happy to see the Swatch® Snowpass watch which allows you to go online and order ski passes. Then, just flag your watch at selected resorts, from Aspen to Bariloche to Zermatt.... and enjoy the slopes.

I think the watch can be so much more that just keeping time...

With the expansion of RFID technology, for instance, couldn't the watch be a practical way to substitute the debit card?  

Just wave your wrist at a cash register, sign and off you go. But again, can't the mobile phone do that too?

Insights Can Be Found Anywhere

More on one of my favorite business stories of the year.  I just read an article on Ratan Tata and the insight that led him to develop the Tata Nano - India's amazing US$2,500 car.  In 2003, going home after work in Mumbai he saw a family of four on a motorcycle... man, wife, child and baby ( a very common scene in India) struggling in traffic under a torrential monsoon rain.  A simple image that became the driving force in the development of an affordable and safer means of transportation for an emerging consumer class.  

Many times we spend tons of money and time with focus groups and other research techniques looking for insights that can drive our innovation agenda.  The wonderful thing about insights is that they are anywhere....  it just takes a good eye and a curious mind to find them and make the right connections.  Sounds easy.... but it's a rare and fascinating talent.  The beauty about this story is that it started off with a great insight, but it took a man with tremendous vision, hard work, persistence and a strong desire to change the rules of the game to make the dream a reality.  It's worth watching Ratan Tata present the Tata Nano to the International press where he talks about his insight and how he overcame many obstacles and critics.  Click here for YouTube where you can see his presentations.

Hot, Spicy & Ubiquitous

This weekend we were eating seafood on this quiet beach off the coast of Santa Catarina and sure enough... the little red bottle was there on the table ready to be poured and give the food an extra kick. I'm obviously talking about Tabasco®. I've travelled extensively over the years, and no matter where I go, Tabasco® is present on the countertops and tables of bars, diners, restaurants (I found out on their site that they export to 160 countries and print labels in 22 languages). In a marketing world where innovation is a driving force, it's amazing to see the McIlhenny Co. - family-owned and operated since 1868 - making the classic pepper sauce with the same recipe for 140 years. It's also great to see how they have been careful in dealing with innovation by launching a wide range of other products from Chipotle Sauce (which I also love), spicy BBQ sauce, bloody mary mix, to spicy ketchup and mustard... extending the Brand to different categories but all positioned to deliver a hot & spicy experience.

"How Does Google Know Everything?"

During dinner the other night, our 6-year-old daughter asked me... "How does Google know everything?"  A fascinating question specially when you think it came from a first-grader.  It made me reflect on my elementary school days.  My Father had a pretty large library at home and there was a Britannica Encyclopedia.  I remember that I would flip through the pages of those 24 volumes and think that all the knowledge of the World was there... (how I was mistaken!).  For my daughter and her generation, Google, Wikipedia... are becoming their first stop for answers.  I just hope that the search engine won't substitute an afternoon at the public library.  My wife and I have spent countless hours at the Ridgefield Public Library reading to and with our daughthers and many times looking for answers to questions they made during the week.  Here in São Paulo, we found two wonderful bookstores, one called Livraria Cultura and the other Livraria da Vila. During our ski week last month, we spent an afternoon at the Telluride Public Library and we were very impressed with their facility.  So, although Google is a great resource to find just about anything... there's something magical about the search and exploration at a great bookstore or library.

Using Color Strategically

Yesterday I had a beer with Jesse Stollak, from Nike Brazil. We worked together in NY a few years ago and I was happy to find out he is now based in Săo Paulo. We talked about a lot of things including some of the projects we worked on together for Pepsi. Jesse mentioned that Corinthians - Brazil’s most popular football team along with Flamengo – just came out with a new Nike jersey. Corinthians’ two official jerseys are white and black, the team’s official colors since the club was founded in 1910. Now, the legendary team announced a third jersey which is completely purple. Purple in Portuguese is ‘roxo’ which for Brazilians means the color of passion… in a more fanatic sense. For instance, a passionate sports fan in Brazil is called ‘torcedor roxo’. So, how appropriate to try and ‘own’ the color purple for a team known for its insanely passionate fan base. A brilliant example, from Corinthians and Nike, on how a simple color can be an innovative way to celebrate the strong emotional connection a brand has on its fans.

It made me think of other companies and brands that have strategically decided to 'own' a color in the hearts and minds of consumers.

Take UPS, the global package delivery company with its ubiquitous brown trucks and its celebrated campaign

"What Can Brown Do For You?"...

Or European mobile telecommunications giant Orange™

with its fun stores where orange is, not only everywhere, but it's also the Brand itself...

How are you using color in your marketing strategies?