Wednesday, December 29, 2010

Food Revolution - Marketing Strategy

Here I am, with the final installment of my commentary on Food Revolution, after indulging in all the sugary goodies that’s associated with the holiday season. I felt this smallest pang of guilt writing about eating healthy while indulging away from the keyboard, but the end of indulgence is near, so here’s the post:

Being a student of marketing strategies adopted by high tech. companies, I found Jamie’s strategy very interesting. I thought some of it was clever but also spotted some missed opportunities.

1. Jamie offered free cooking lessons at different points in time to the community. There seemed to be an implicit assumption that it’s only fast food and processed food that is unhealthy, and that one of the contributing factors why the people of Huntington were eating unhealthy food was a lack of cooking skill. I found this approach a tad questionable, without educating the population on basics of nutrition. Perhaps Jamie’s recipes were healthy, but it’s very easy to cook extremely unhealthy foods from scratch in one’s own kitchen. I did not see Jamie explaining that it’s perfectly possible to undo the positive effects of eating salad for lunch if you don’t go easy on the dressing or choose your dressing wisely. While the cooking lessons were a good marketing tool in that it brought people together, (hopefully) helped them understand that cooking from scratch can be tasty as well as healthy, I might have taken a more multi-pronged approach.

Specifically, I would have added a basic nutrition education component, and enlisted as allies and sponsors manufacturers of these healthy foods. For instance, I imagine companies like Quaker Oats, the makers of “I can’t believe it’s not butter”, and producers of lean cut meats would have been interested in sponsoring a cooking + education session that promoted their products while enjoying the free publicity and limelight. I felt that partnerships that could have made this even better received were left under utilized.

2. Jamie’s interaction with the radio station host made for drama for TV viewers as well as served as a good marketing tool to raise consumer awareness. I though this was pretty clever, especially the part where Jamie won the bet and made a convert of the talk show host...

3. Initially, Jamie had reached out to the pastor of the local church who was a deep believer in Jamie’s “product". I haven’t seen any episode yet where Jamie took full advantage of the pastor’s support and tried this method of outreach to get his message out to the wider community.

4. While reading up on Huntington, I learned that the city is home to Heiner’s Bakery, and this bakery was owned by Sara Lee Corporation, one of the early manufacturers of the Whole grain white bread. I would have enlisted them as an important ally in my marketing efforts. This company is actively pushing the sales of its healthy breads and the irony of it being manufactured in a city that has more pizza joints than number of health clubs in the entire STATE of West Viriginia is inescapable! As one of the largest employers in the city, one would imagine this would make them the perfect ally but nowhere was this mentioned as a part of his marketing strategy.

On November 10, 2010, Sara Lee sold Heiner’s and other assets as a part of a $959M deal. I imagine the value of their brand equity would have been even higher had they been spotlighted in the national media and consciousness as a result of this show! (Caveat: I don’t know if there is indeed already such a partnership that will be revealed in a future episode!)

5. Nearly 30% of Huntington’s population lives below the poverty line. Huntington’s city council consists of 9 Democrats and 2 Republicans. Can these 2 facts be exploited to levy some kind of “health fee” on the pizzerias and other fast food purveyors in town so as to make fast food more expensive? If that’s illegal, perhaps something along the lines of Santa Clara county’s ban on sale of Happy Meal toys and other promotions that come with high calorie fast food sold to children.... The point is waving a carrot in front of consumers to motivate is great, but coupling it with the right stick to deter unwanted behavior makes it even more effective.

6. Eating better is certainly one way to make the population healthier, but it seems to me that putting the right incentives in place for the citizens to pursue a more active lifestyle should go hand in hand with better eating habits to reach the overall goal of a healthier city. Perhaps the show is skewed this way because Jamie is a chef, but it seems like a great opportunity to couple this show with another TV show such as “The biggest loser” to generate a bigger bang for buck all around.

When the campaign goes national, I would also think about harnessing the power of social media - specifically Facebook and YouTube - to make this viral. I did not list Twitter because I feel that an effort such as this one which needs time before results can be observed is not well suited to the instant nature of Twit-verse. I will of course, take back the suggestion to not use Twitter if celebrities want to get involved and use their fan following to help reach critical mass!

Wednesday, December 15, 2010

Food Revolution Market Entry Strategy

It occurred to me that I did not fully address FR’s market entry strategy in my previous post. Traditional wisdom says that when a newcomer attempts to take on a well entrenched incumbent, the newcomer should initially focus their efforts on gaining a strong toehold in a market niche, ideally one that is not well served by the incumbent.

Going by that logic, Jamie should have picked a school district where the parents were already reasonably health conscious, whose kids did not eat at the school cafeteria because the offerings were unhealthy and it would have been preaching to the choir to talk to these parents about the importance of healthy school lunches. This would have been a great slice of the market to go after because:

(a) Barriers to entry would have been lower - he would have enjoyed widespread parental and potentially educator and administration support

(b) Results would have been relatively easy to show (say the percentage of students bringing lunch from home went down from 50% to 10%, it would have been an impressive statistic)

(c) Given the correlation between income and healthy heating habits, these schools would have been located in wealthier neighborhoods where fundraising to support his goal would have been easier

However, Jamie went after the “fattest city” in the “fattest country” in the world - Huntington in West Virginia in the US - irking many people right off the bat with that characterization. I speculate he may have chosen this market entry strategy for a couple of reasons:

(a) Forgive my cynicism in listing this as #1, but the drama makes for good TV. Think back to the tear-jerker episodes where he interviews the overweight families and takes them to the doctor who tells them their daughter will die before the parents if she doesn’t lose all that extra weight... To be fair though, if a TV show was generating your paycheck, helping you sell more cookbooks and gear, and making you a celebrity while you’re at it, this is a pretty astute and strategically sound decision. People who are not in nearly as bad a situation will see it as if-they-can-do-it-we-can-do-it. Works either way.

(b) If the goal is to make something widely adopted, it’s a much more compelling story with a greater impact if it was applied on the worst possible case, and that case was turned around to produce results. It’s a combination of couple of Cialdini’s principles of persuasion. A greater authority is conferred upon Jamie if he succeeds with the “fattest city” making it much more likely his suggestions will be accepted elsewhere, and people in a similar situation will see it as social validation.

(c) It nips arguments such as “they could do it because they lived in a wealthy school district that was not in a cash crunch” type of arguments in the bud.

(d) In some ways, raising money from the administrators of the local hospital is a shrewd move in that it forces the more educated, health conscious section of the Huntington community to commit to effecting a change in their community. It also enhances their public image in the minds of those who view the hospital as benefiting financially from the poor health of those living in the community.


Overall, I can see why FR adopted the latter strategy when theory says the former might be the way to go. Goes to show that theory and practice are not always congruent, but there’s a good reason behind it in this case at least!

Monday, December 13, 2010

Jamie Oliver’s food revolution and business strategy

I was catching up on Jamie Oliver’s TV show “Food Revolution” last night, and my mind couldn’t help but draw parallels between the entrepreneurial nature of what Jamie was trying to do and launching a new start-up or a new product. If you have not heard of the show, details can be found here and you can also watch the episodes online for free. I thought it would be fun to do a strategic analysis and compare theory to practice.

The challenge: Take on entrenched incumbents (processed junk food), change consumer behavior (eat freshly cooked unprocessed foods) through marketing (customer education and raising awareness) and eventually capture the American market (every school in America should offer their students nutritious food choices).

When entering a new market, one of the first things to do is to determine the state of the current and future markets. In this case, the current market is the total number of schools in the US, with schools being classified as elementary or secondary (high) school. Per this data from the National Center for Education Statistics, the market consists of 132,656 schools. The future market is expected to grow since the census predicts that the US population will reach 392 million people by 2050. This is mildly reassuring from a business perspective. I say mildly because although the US population is growing in terms of absolute numbers, the growth rate is expected to slow down significantly as the population ages and dies in the coming decades. Assuming that the market entry strategy of food revolution (FR) focuses on schools and is not an end in and of itself, one recommendation might be for FR to next target the other end of the age spectrum since that demographic is growing rapidly and may I dare say, experiencing first hand the effects of years spent eating junk food.

The second thing to look at is competition. In this case, the competition is the processed food currently being served in school cafeterias. They have an advantage over the newcomers in a couple of different ways (a) it’s cheaper (b) less work for the school cooks (c) it’s easy to buy in bulk and (d) they have a longer shelf life than fresh food. Here, it’s important to look at how competition will respond to the entry of a new competitor. In this case, I suspected competitors will react by dropping prices even further making it hard for cash strapped school districts to financially justify replacing processed food with fresh ingredients. I was proved right in the latest episode where Rhonda was considering introducing processed food in the school cafeteria on Fridays to work through the stock in the warehouse. Even more alarming, she had already placed an order for the 2011 school year with the processed food suppliers, citing “cheap” as a reason...

The third thing to examine is the barriers to entry. I see the following as barriers to entry for freshly cooked food in school cafeterias: (a) fresh ingredients are more expensive (b) have a poorer shelf life (c) need more resources to process (people and time) (d) need cooks to be re-trained to use them and (e) students’ palates need to be retrained to appreciate this food. I liked how Jamie systematically tackled each of these issues. The big market risk in this case is that the students may not like this new food and may clamor for the old menu.

The fourth and final thing I would think about when introducing a new product or entering a new market is a strategy for entering the market. In this case, it’s rather obvious that neither acquisitions nor joint ventures are options, and FR must start from scratch.

In my next post, I will attempt to analyze FR’s marketing strategies and their effectiveness.

Wednesday, December 8, 2010

Hiring practices

I interviewed for several positions in the last few months, and that too fresh from listening to people like Paul English who have finessed the practice of hiring to an incredible art+science. I had drunk the kool-aid and only interviewed for positions I was passionate about and with companies that I thought I could make significant contributions to. My experience and the prescribed best practices were a world apart.

It started with a company trying to source authoritative information from the wikipedia, assuming it would not have crossed my mind to Google myself. They topped it off by sending me an email (which I have saved) questioning my integrity and intelligence. Struck rather speechless and extremely offended, I escalated the issue to a certain level within their organization, and then moved on, overwhelmed by the negative energy, making a mental note to never ever cross paths again. I was off to a great start at the races.

It was followed by an experience where it took a full 6.5 weeks from the date of initial contact to hear the outcome and this experience was even more strange - they requested FIVE references overnight after 2 rounds of interviews, and I pinged a lot of very busy people who were very gracious and agreed to serve as my reference at such short notice. These references were then made to wait a week, in some cases called late, in other cases had their requests for preferred communication modes ignored. Each reference was interrogated for at least 45 minutes and *then*, I was told that I didn’t meet the basic job description after all. I had already completed 2 round of interviews before this. I might be forgiven for thinking they’d figure out I didn’t meet their basic criteria a lot sooner than this! Chalk that down as weird experience #2.

Then came two interview experiences where no one would tell me what POSITION I was interviewing for, or even which group within the company, but instead repeatedly kept asking me “what would you like to do?"! Apparently this is a part of their strategy to assess where I would fit best and to prevent candidates from giving canned answers. (Yes, I had applied for a specific position - but the minute I walked in, my interviewers made it clear that it’s not necessarily the position I was being interviewed for and wouldn’t tell me what else I was being considered for!). Seriously, if the candidate doesn’t even know which group they’re interviewing for, leave alone the position, how on earth are they supposed to tell you what they can do for you?! Maybe this strategy might work if they only interviewed people with the exact background and skill set needed, in which case they will be able to hear what they want to hear. But given my diverse background, I need to know what it is you want done before I can tell you whether I have any relevant experience, and how I can help! It’s simply not possible to list every skill, kitchen-sink style, on a one page resume, and not confuse the heck out of the reader. I was surprised to come across not one, but two companies that followed this interview method.

Next came another interesting experience - this company made me go through 3 rounds of interviews, including a take-home exam! I invested over 20 hours interviewing with this company. I thought the interviews went extremely went well and was therefore shocked to hear that I hadn’t made the cut. I requested feedback and got none. I then tried escalating my request for feedback and got no response - not even a polite email explaining it’s not company policy to provide feedback. Really? And this is considered acceptable? You ask a candidate to invest 20+ hours of their time interviewing, but will not take 10 minutes to provide one-time feedback even after I had made it clear, in writing, that verbal feedback is perfectly fine (in case they’re worried about liability issues) and I was strictly asking for self-improvement purposes only. That completely turned me off the company culture.

I muse about this for a couple of reasons:

1. Are our hiring practices so screwed up in this country (I have no outside the US interview experience) that interested AND qualified candidates must jump through ridiculous hoops in order to get hired? Maybe it’s a function of the economy - hiring managers only want to hire people who are an exact skill fit. It flies against Paul’s wisdom (which I agree with) about hiring for
intelligence, attitude, lack of dysfunctional behavior and the ability to get stuff done.

2. Is my experience just an unlucky coincidence or have others experienced something similar?

3. Why is there such a huge disconnect between the theory and practice of hiring?

When it’s my turn to hire, I intend to hang Paul’s advice on my wall and make it my mantra.

UPDATE: I heard from a number of friends after they read this post. The story has a happy ending fortunately: I will be joining a stealth start-up come January.