R.J Reynolds – Smokeless cigarettes

Smoking is an old habit of the world. When, in 1988, Americans began to understand that tobacco could be dangerous, and so could the passive smoking, R.J Reynolds (Camel, Pall Mall, Winston) decided to invest 325 million dollars in a smokeless cigarette. The idea was that, if the cigarette didn’t release any smoke, then this cigarette would wealthier for both the smoker and the people around. The cigarette is baptized Premier. 

The Premier cigarette

But dreams don’t always become true and even if it does its part of the contract, the Premier cigarette faces a lot of issues. First of all, according to the consumers, it tastes like hell, and the first consumer to admit it is… Reynolds’s CEO. Then, due to its technology, the cigarette is really hard to light and a match isn’t enough: when you wanted to smoke a Premier, the lighter was the minimum required. Premier works indeed with a charcoal that heats the tobacco, so that it doesn’t burn and release smoke. This is where we meet the last main problem: the inhalation is really difficult and requires a lot of efforts.

To finish, one of the most pleasant aspects in smoking, according to smokers, is precisely the smoke. This product had therefore no advantage for smokers. After 4 months of weak sales the Premier cigarette stopped being sold.

However, Reynolds, unlike the other brands that we saw before, did not understand this lesson: a few years later, in the middle of the 90s, the anti-smoking campaigns keep increasing in intensity. Reynolds decided that this was (again) the right time to launch a smokeless cigarette. This is how, in 1996, the company invests 125 million dollars to improve the Premier cigarette, and release the Eclipse cigarette. But this is a new failure. Stressing on the healthier and cleaner aspects of its new products due to the charcoal and the heated tobacco (same method than the Premier cigarette), Reynolds didn’t anticipate that some studies would attack it because of the toxins released by the charcoal when it burns, especially when the smoker inhales hard. In addition to all of this, smokers still did like the smoke of a cigarette… And this is a new fail. But it is still sold today, and became more appreciated since smoking is restricted in most of the public areas.

In spite of these failures Reynolds is the second tobacco brand on the American market with 33% market shares and is now looking for becoming the e-cigarette market leader. It recently fused with Lorillard (which owned the e-cigarette brand Blu) to achieve this goal. And this is how, after 50 years to wait for a successful healthier cigarette, Reynolds has the serious opportunity to finally triumph.

Morale of the story: Bear and forbear!

Mattel - Earring Magic Ken

In the toys stereotypes' history Mattel is one of the major leaders. This company produces indeed the Barbie dolls since 1959 and her lover Ken since 1961. Barbie and Ken in addition to be the perfect man and woman, they are supposed to embody the perfect couple: they both are beautiful, rich and smart and sincerly love each other. It has always been a challenge for Mattel to keep them up to date.

In 1993 Mattel decides to interrogate several little girls to know what they expect about the Barbie and Ken couple. Mattel asked them a simple question : do you think that Barbie should have another boyfriend or should she stay with Ken ? The girls answered that she should stay with Ken but that Ken should be cooler.  This is how a new Ken, baptized Earring Magic Ken has been launched.

The Earring Magic Ken

As you can see, the Cool Ken wears a purple vest, a purple fishnet T-shirt, has an ear piercing and is blond. It seems therefore that the new Ken... is gay. At least this is was the public opinion's mind. A lot of journalists wrote and talked about it, from the New-York Times to People Magazine and CNN. A columnist wrote an article in a gay journal, The Stranger, talking about how heterosexuals had begun to take the homosexuals codes. Later in his article he also explains his point of view concerning this (bad) marketing choice. According to him the little girls' "cool" concept was not coming from the boys from their environment like their fathers, brothers or uncles. They were actually looking at MTV, Madonna's dancers clothes, or at these guys on TV parading for the rights equality.

After a few times where Mattel did not know what to do (criticism was going on but they couldn't take Gay Ken out of the shelves without being seen as homophobic) they finally decided to stop its production after the The Stranger's edition. 

Mattel's mistake has been not to understand where this "cool" concept was coming from, and to forget that even if the dolls are designed to be liked by little girls, parents actually buy it so they must be convenient for them as well.

However the Gay Ken had a lot of success in the gay community and is now a collector item, being sold around 50$ on Ebay.

Today the Mattel's dolls are convenient for everyone and the new dolls range, High Monsters, is the latest brand's success. Mattel is still one of the toys brand leaders next to Hasbro and Lego. 

Morale of the story: One man's meat is another man's poison!

Kellogg's - Cereal Mates

When in America the number of working hours began to increase at the same time than the fast-food development, Kellogg's saw an opportunity on the breakfast market. The idea was that american people had less and less time on the morning to eat, especially when they live far from their work. To gain some of this precious time that is the morning time, Kellogg's began to offer a little box of cereals with some conditioned milk and a plastic spoon: the Cereal Mates. This box was declined with four kinds of the most popular kellogg's cereals : Corn Flakes, Frosties, Fruit Loops and Mini Wheats. It believed so much in this new product that it launched a TV advertising campaign:

But this product never worked and the following year in 1999, when Kellogg's rival General Mills became the market leader, it was abandonned.
The fact is, Kellogg's did not understand the need of its customers and did several mistakes in its product elaboration.
Its first and main mistake was the milk conditioning. As the product was stored on the breakfast shelves the milk was warm, and when Kellogg's decided to store it on the refrigerated shelves nobody thought of buying their breakfast cereals in there. In addition to that, advertisings show children using the product by themselves, while in reality the packaging was not practical enough to enable them to serve the milk properly. To finish, the taste of a conditoned-in-a-sanitized-way milk was not very good.
The second main mistake was the price. Sold at more than a dollar, the product's price was considered way too expensive compared to its quality and its promises it couldn't keep: indeed, the Kellogg's Cereal Mates were supposed to be a practical product above all. But serving the milk and using a spoon was no practical way to quickly eat breakfast for a huge majority of consumers.

A few years ago Kellogg's tried again to create a practical breakfast product, and launched the Nutri-Grain range, some cereal bars which need neither milk nor spoon. And it is now one of the Kellogg's biggest successes, as Nutri-Grain became the second most liked breakfast biscuit market brand within nine months.

The moral of this story: Forewarned is forearmed !

Sony - Betamax

I could talk to you about Coca-Cola's most famous failure but you probably already know that story. And if I begin this blog with a food products story I could myself commit a marketing failure, as I won't give you a serious and professional image of what this blog is and what I want to do with it. You would tell me, and you would be right to tell me that, "what is the point of creating a blog filled with stories that everybody already knows, and that you can easily find on several blogs?"

That is why I will begin with the story of Betamax, from Sony. This video cassette recorder for individuals uses the Betamax technology and is developed in the 70s, before its launch in 1975. 30 000 exemplars are sold the first year in America. But in 1976, JVC, Sony's rival, introduces its own technology: the VHS (Video Home System), and agrees to share it with other Japanese companies. These two formats are incompatibles and therefore consumers have to choose between a Betamax video recorder and a VHS video recorder. Sony’s rivals begin a price war that they win: the price gap between some video recorders reached 300 dollars. In spite of the acknowledged higher quality of the Betamax recordings, they attract less and less consumers because of one main issue: its higher quality in terms of image and sound is the cause of a limited recording capacity of one hour per tape, which means that any film or football game requires at least two, sometimes three tapes to record it from the beginning to the end. When the Betamax technology was excellent but not practical, the VHS one was acceptable and practical. In 1987 the VHS market shares reach 95%, and the following year Sony launches a VHS video recorder range.

Later came the DVD (Digital Versatile Disc), and this time Sony worked on a common format with eight of its rivals.

Today Sony has stopped its DVD player production. Even if it had 10 to 15% of market shares, the company had some loss with it due to a strong rivalry and continually decreasing prices. The main source of revenue was the Xperia mobile phones range a few years ago and is now the PS4. On its first 2014 trimester Sony has sold 3,5 million PS3 and PS4 when Microsoft has only sold 1,1 million Xbox 360 and Xbox One.

The moral of this story : A ragged colt may make a good horse !

                                                                    The Betamax video recorder