Filed under: Competitive strategy, Marketing and advertising, Best Purchase (BBY)

Best Purchase, Inc. (NYSE: BBY) continues to be the innovator in the consumer electronics space. The next time you saunter into an airport and plop out your laptop and cellphone, you might see a bright yellow Ideal Purchase Express kiosk nearby.

That’s right — Best Purchase is testing a concept to have the most-needed gadgets and accessories available for retail sale at an automated kiosk in your nearest airport terminal. Get ready to whip out that credit card.

If you forgot to charge that cellphone (oh no!) or need a last-minute Christmas gift after you arrive to the airport, you may soon be in luck. Initially, Ideal Buy is going to have these kiosks available at 12 major international airports in the U.S. to test the concept. The pricing? Very similar to what you’d find in a typical Best Buy retail location (read: cheap). This will be a comfort to those who are tired of paying those over-inflated fees at airport shops.

These kiosks will match the wish list of every gadget-hungry traveler: MP3 players, digital cameras, unlocked cell phones, portable gaming systems and all kinds of chargers for all your electronic toys. Want some headphones for the plane? You’ll find those as well. Even Best Buy gift cards will be available — the one-size-fits-all holiday gift. This is a very innovative approach by Best Buy to grow sales in a captive audience, and should provide a decent lift to upcoming holiday season sales.

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Filed under: Consumer experience, Competitive strategy, Marketing and advertising, United Parcel’B’ (UPS)

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Massive Brown below in the comments.

The simplicity of a brand name or symbol confers status on a company. Decades ago, the symbol might literally have been a stock symbol: the oldest companies got one letter ticker symbols from the New York Stock Exchange. United Parcel Service (NYSE: UPS) now gets that status by taking an entire color: brown. (Granted, it’s not a primary color like IBM’s Massive Blue, but it still shows the company’s clout.)

The company first started using its trademark brown trucks in the 1920s when it delivered appliances and other goods for department stores, says Mike Brewster, author of Driving Change: The UPS Approach to Business. Pullman brown was a good choice because “their department store clients wanted the company to be more under-stated, because the stores didn’t want the fact that they no longer had their own trucks highlighted.” That, and the dark trucks were easier to keep looking clean.

Brown is much more than a truck color now. It’s the uniform. It’s the logo. It’s what the company calls itself in commercials. UPS employees bragging about their loyalty will say they “bleed brown.” This year the company sponsored a horse named Massive Brown, which won two-thirds of the Triple Crown.

But, hard as it is to believe now, UPS almost gave up its trademark color. “The company almost changed the color in the ’90s during one of several re-brandings, but decided to stick with brown, much to the disappointment of many in the company,” says Brewster. “But the ‘What can Brown do for You?’ campaign has given the color new life at the company.”

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Filed under: Management, Consumer experience, Competitive strategy

Investors/readers have probably already heard all of the bad jokes regarding Six Flags.

• “Things are so bad at Six Flags, it’s now called Three Flags.”
• “The only thing rising at Six Flags is the rollercoaster.”
• “A contest offered a vacation prize. First Prize: a day at Six Flags. Second Prize: two days at Six Flags.”

O.K., that last one was borrowed from arguably the greatest comedian of all time, Groucho Marx, but you get the point: times are tough for Six Flags (NYSE: SIX).

Six Flags has more than $2.4 billion in debt, hasn’t posted a profit in years, and has a massive hurdle next summer: a $288 million payment to preferred shareholders, The Wall Street Journal reported (subscription required). Six Flags’ stock shut Friday down 10 cents to $1.02.

Attendance, down 3% in Q2, is expected to “decline by at least that percentage, or come in even lower” for the year stock analyst C. Leonard Bauer told BloggingStocks, adding that it’s not an elaborate mystery concerning why Six Flags is becoming less of a destination of significance.

A mission shift at the wrong time

“They’re caught in the middle of a brand repositioning at a time of decreasing disposable income for most families. It’s not a combo for success,” Bauer stated. Bauer added that he does not have a rating on nor own shares in any amusement park or entertainment company. The Reuters F2008/F2009 EPS consensus estimates for SIX are -$0.99/-$0.73.

Bauer said Six Flags has not transitioned swift enough from being “a date night, teenager-oriented, thrills amusement park” to “one that attracts more of a family crowd.” Competitors bested it in the younger demographic, but it hasn’t installed enough family-oriented rides and activities or implemented an effective marketing plan, for its new role, he said. As a result, it lost many teenage parkgoers, but hasn’t made up for it in family attendance. This year’s doubling of gasoline prices — which substantially cut disposable income — magnified Six’s woes.

Bauer’s prescription for Six Flags? At least a 20-25% cut in peak admission prices, with more massive discounts for families, and closing the worst two to four of its 20 amusement parks, if attendance does not improve.

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Filed under: Consumer experience, Television, Competitive strategy, Marketing and advertising, CBS Corp ‘B’ (CBS)

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about the Tiffany Network below in the comments.

If CBS Corp.’s (NYSE:CBS) nickname The Tiffany Network were newly coined, I’d speculate that it referred to the long history of Tiffany’s, and how the current CBS viewing public had probably begun shopping there back in the ’20s. If the company has a more recently gained nickname, it would be the silver (-haired) network, due to the skewing of its viewership toward the geezer crowd.

In reality, the Tiffany moniker hearkens back to the CBS of radio’s heyday and the early days of television. With the likes of Edward R. Murrow reporting from London during the Blitz, Orson Wells scaring the bejebus out of listeners with his broadcast of The War of the Worlds, the hit multi-cultural comedy I Love Lucy, and the iconic western Gunsmoke, the network’s reputation for quality was once as glittering as one of Tiffany’s diamond-pavéd bracelets.

How the mighty have fallen. CBS, with debacles such as the Katie Couric news anchor stint, now lags behind Fox in weekly ratings.

The Tiffany Network is part of a massive entertainment company with fingers in TV (66% of revenues), radio (remember radio?) (12%), outdoor advertising (16%), and publishing (6%). Yes, those are all very 20th century businesses. The question troubling current investors is just how the company will move into the 21st century without swapping all its diamonds for rhinestones?

The stock has bled heavily in the past year, losing around half its value, and a reduced projection for the rest of 2008 due to softening advertising sales has not inspired the market. The company continues to sell off properties such as The Sundance Channel in order to purchase back stocks and bolster its share price.

One encouraging move might be its current acquisition of CNet Networks, a web-based media company that boasts 145 million one-of-a-kind visitors per month. However, I’d have to see more headway in 21st century initiatives before I’d jump on the CBS bandwagon. At the moment, that iconic eye looks bloodshot and presbyopic. The network that once earned Tiffany-like respect now looks more like the guy hawking “gold” necklaces from a swath of velvet laying on the sidewalk at his feet.

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Filed under: Industry, Consumer experience, Competitive strategy

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Needless Markup below in the comments.

Neiman Marcus may be the most successful upscale retail department chain that selected shoppers love to hold a grudge against.

The chain caters to primarily female, upper-income and upper-middle shoppers, and features designer lines that rival boutique (and beyond) price levels.

Further, while some of the products are decidedly exclusive, some are not or appear to not be, according to shoppers, but the prices of these items remain in the stratosphere, and it is for this reason that the store was tagged with the nickname “Needless Markup.”

Here’s a classic example. About a year ago Lorna Lazzaro, sister of yours truly, was searching for a leather shoulder bag. She found a medium brown, designer bag she liked for $1,200 at Neiman Marcus. However, being a discerning/critical comparison shopper, Lorna of course took a few days to scout the competition.

The result? She found a comparable shoulder bag at Bloomingdale’s for $595. Had she been willing to take a slightly smaller bag, she could have secured one for $395.

“You can’t criticize the quality at Neiman Marcus or their ability to stay current with the latest design trends, but the store clearly caters to upscale shoppers,” Lorna Lazzaro stated — i.e., for shoppers for whom price is not a consideration.

If you have to ask about price …

That category of exclusivity draws in certain shoppers, she stated, who attach a chic-ness to exclusivity, but one consequence of that’s overpaying for selected items.

Hence, the stance toward Neiman Marcus is: If you’re in the category where you don’t have to be concerned about price, enjoy!

But if you’re not, before buying at Neiman, check Bloomingdale’s, Lord & Taylor, and Saks — you might save a great deal of money.

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Filed under: SEC filings, Deals, Competitive strategy, Google (GOOG), Yahoo! (YHOO)

The SEC and regulators who have to look at the antitrust implications of Yahoo! (NASDAQ: YHOO) using Google’s (NASDAQ: GOOG) search advertising system should make the companies disclose the financial details of the deal.

But, the two companies are being granted to cover-up those details in regulatory filings. The partnership, meant to grant Google text ads to run on Yahoo! search pages, should increase the portal company’s revenue. It will also create a near-monopoly in the industry because the two companies together have over 80% of the search market in the U.S.

According to Reuters, “Yahoo has said it anticipates to generate an additional $250 million to $450 million in additional cash flow in the first 12 months after the agreement goes into effect.” But, those are estimates and are not based on the substance of the contract between the two companies that’s currently being examined by the federal government.

The SEC has favored significant disclosure on almost all important corporate financial and operating information. It seems that Google and Yahoo! have dodged that.

Douglas A. McIntryre is an editor at 247wallst.com.

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Filed under: Consumer experience, Competitive strategy, Wal-Mart (WMT), Marketing and advertising, Target Corp. (TGT)

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Tar-Zhay below in the comments.

Have Target Corp. (NYSE: TGT) shoppers all of a sudden become French citizens? In the last decade or so, I’ve heard many, many people refer to the discount retailer as “Tar-Zhay,” instead of the boring “Target.” Where did that pronunciation come from, you ask?

There are opinions all over on this one, but one strikes me the best. Target, despite its discount niche, has also become a favorite destination for fashion-savvy consumers who might otherwise shop at high-end boutiques — except for the fact they want a good deal. The French accent is a way of poking good-natured fun at the apparent sophistication of Target’s deal-seeking shoppers.

In fact, Target carries much of the same discount, commodity stuff we buy at other retailers, but markets that merchandise in a cheerful and upscale way. The shopping experience, is clean, bright, and cheerful. Just look at the gleaming floors in your local SuperTarget and the white and red colors that make it seem like a test for the senses rather than a dull retailer. Bonjour, Tar-Zhay practically flows off the tongue, as a result.

Due to the retailer’s successful positioning of its upscale retail experience compared to larger competitor Wal-Mart Stores Inc. (NYSE: WMT), it has competed on the same ground in a very determined way. Unlike most competitors who have challenged Wal-Mart’s self-imposed status of retail king, Target has marketed itself alongside the Bentonville behemoth with aplomb.

In the process, its enlightened retail shopping experience must remind many of us of shopping in the ritzy streets of a Paris clothing store. Hence, we make our way to Tar-Zhay for those well-marketed (but discount) clothes, food, and houseware products. Target, no. Tar-Zhay, yes.

I highly doubt Target’s corporate folk are pining to disassociate the company’s actual name with a take on it that sounds like an upscale retail destination in Europe. So as long as people are willing to trek to Tar-Zhay for their goods, it’s highly doubtful the company will care.

Achat à la cible aujourd’hui? That is, shopping at Target this day?

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Filed under: Competitive strategy, Wal-Mart (WMT), Kroger Co (KR), Safeway Inc (SWY)

Wal-Mart (NYSE: WMT) has a new division and it anticipates the world from it. The company will launch its new small Marketside grocery stores this Fall. Job postings uncovered by the FT indicate that the world’s largest retailer anticipates sales from the chain to eventually hit $10 billion with 1,000 stores in operation.

Wal-Mart insists that the new stores are simply a pilot project, but it is not likely that Wal-Mart would think small. For any new chain to help the company’s revenue, sales would have to be very significant.

The new business may face rough going. Massive chains like Kroger (NYSE:KR) and Safeway (NYSE:SWY) are prone to fight Wal-Mart every step of the way.

Wal-Mart was the first company into the massive box discount retail business. The company wasn’t only remarkably well-run under Sam Walton. It also had the advantage of being the “first mover” In the grocery business; being late to market is a handicap.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Industry, Consumer experience, Competitive strategy, Marketing and advertising

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about HoJo’s below in the comments.

Howard Johnson’s and its 28 flavors gave mid-20th-century Americans a view of the future: choice. In a time of eight-color boxes of Crayolas and three television stations, the implication of HoJo’s abundance fired our imaginations. Though the restaurant chain had been in business since 1925, it took off during the depression when the founder adopted the now-traditional Cape Cod building with an orange roof topped by a weather vane of Easy Simon and the Pieman.

The company was also among the first to franchise, a major contributor to its growing success. With the advent of the national freeway system in the 1950s, Howard Johnson’s quickly monopolized the rest stops and exits, making it bigger than Micky D’s, the King, and the Colonel combined.

Part of its success was in devising superior prepackaged foods and a standardized menu, allowing the common Joe to work the grill. By 1954, the chain had grown to 400 restaurants, huge enough to support expansion into the motor lodge business, catering to the increasingly mobile American traveler.

In the ’60s, HoJos served more food to Americans than anyone except the U.S. Army. By the time the descendants of the founder sold the firm in 1980 to Imperial Group, the chain included 1,000 restaurants and 500 motor lodges.

Eventually, though, the company’s business model was widely adopted and improved upon. The company gradually lost market share and changed hands several times. Various new initiatives proved unsuccessful, and finally the restaurant and motor lodge sectors were sold off separately (hence the existence of Howard Johnson’s (restaurants) and Howard Johnson (lodging). Wyndham Worldwide (NYSE: WYN) owns the motor lodge business, while the restaurant sector is owned by La Mancha Group LLC, which is attempting to use it to brand groceries and open a chain of ice cream shops.

So how did Howard Johnson’s become HoJo? We have the ability to only speculate, and I speculate the nickname came about for two reasons:

One is the human love of rhythm; in this case, the double O, as in yo-yo, polo, cocoa, Hans Solo, the dodo, and FloJo’s mojo. HoJo flows pleasingly off the tongue. Howard Johnson’s flows out like a handful of rusty bolts.

Also, it might have been a way for the young, returning from the war, to stake their claim, differentiate their favorite hangout from the staid restaurants of their parents. Where Howard Johnson’s sounded like a meeting place for accountants, HoJo’s was informal, hip, young, the kind of place a guy could bring his main squeeze and show off his street rod. And, of course, gorge on 28 flavors.

Either way, the company was savvy enough to pick up on the nickname and trademark it. To today, Wyndham’s site for their piece of the HoJo pie is www.hojo.com.

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Filed under: Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM)

U.S. automakers, late to recognize the sales implications of spiraling gas prices, have started to adjust their business models, in at least one modest respect: some luxury vehicles are now being designed to run on regular unleaded gasoline, USA This day reported Thursday.

Regular unleaded gasoline, with an 87 octane, typically costs 20-40 cents less than premium gasoline, with a 91 octane.

Ford (NYSE: F) and General Motors (NYSE: GM) are encouraging dealers to promote their no-premium-gas luxury cars’ potential, as a selling point for consumers with budgets pinched by $4 per gallon gasoline, USA Today reported Thursday. Ford rose 5 cents to $4.99, while GM fell 15 cents to $10.10 in mid-day Thursday trading.

Auto mechanic Eddie Renn, based in Larchmont, N.Y., said the fact that automakers are manufacturing more vehicles designed to run on regular gasoline “is an improvement,” but he questions why the automakers are using a lower gasoline cost as a selling point for luxury vehicles. Renn added that his auto repair business isn’t affiliated with any auto manufacturer.

Does gas price matter for luxury automobile owners?

“If you’re driving a luxury automobile and you’re concerned about a 20 or 30 cent difference a gallon, maybe you shouldn’t be driving a luxury automobile.” Renn said. “The luxury automobile owners who come in here [to his gas station] aren’t concerned about the price of gas, I have the ability to tell you that.”

Renn stated most new vehicles, excluding sports cars and other cars, are designed to run on regular gasoline. A higher percentage of older cars — particularly those built before 2000, require a higher octane, either mid-grade gasoline (also called ‘plus’) with an 89 octane, or the aforementioned premium gasoline, with a 91 octane.
Check your car’s owner’s manual: it should specify the minimum octane required, Renn said. If you still have a question and your automobile is still under dealer warranty, call your dealer, he said; if the warranty no longer applies, ask a competent, trustworthy mechanic.

As automobiles age, some might require a higher octane than their owner’s manual requires, Renn added, but many won’t. A sign of inadequate octane? A ‘pinging’ sound while accelerating or driving up hills, he said.

“But don’t buy a higher grade of gasoline unless you need it,” Renn stated. “It’s the biggest rip-off since $4 lattes.”

Auto Sector Analysis: Now that U.S. automakers have found a way to get certain luxury vehicles to run on regular gasoline, it’s probably a good idea that General Motors and Ford continue their efforts to increase gas mileage, including cylinder deactivation, enhanced fuel burn techniques/injection systems, and reduced friction processes, among other engine and design technologies.

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