Hall of Fame

Recent Inductees

adidas
In 1993, adidas—the company that once outfitted Muhammad Ali with its trademark three-stripe sneakers—was on the ropes. With consistently weak advertising campaigns, a poorly managed brand extension into athletic apparel, and staid products, adidas wasn't doing much to win the hearts and minds of sneaker buyers besieged by sleek communications campaigns and more fashionable offerings from surging Nike and Reebok International. Add to those woes, annual losses of almost $100 million, the brand's managers knew something had to change.

In comes turnaround artist and new CEO Robert Louis-Dreyfus who immediately recognized becoming more customer-centric was the key to restoring the luster to the brand. In response to the growing interest in sneakers as an element of fashion, the company decentralized to allow it to be more responsive to popular styles in different countries and studied fashion trends to inspire shoe design. Older styles were reintroduced and updated with new sneaker technology, for instance, the retro look when it was popular. While the company matched Nike's and Reebok's efforts to sign marquee athletes and sponsor key sporting events, it also invested time and money in cultivating relationships with fashion models and magazines, as well as other purveyors of fashion culture including musical artists and designers such as Stella McCartney.

The company didn't neglect the performance side of its business, however, and apparently in response to consumer complaints about finding a sneaker that delivered high performance and the right fit under all surface conditions, the company introduced the world's first intelligent running shoe in 2005. The Adidas 1 uses an in-sole computer to adjust its heel cushioning in real-time and has received positive critical reviews. In limited release and with a price tag, the company believes it has introduced the "biggest thing to hit this industry in decades."

Today, adidas is the #2 maker of sporting goods worldwide with hot prospects for significant market share growth. Profits increased by 46% in the first quarter of 2005, thanks to strong sales of its clothing and shoes around the world, and it projects "double-digit currency-neutral [sales] growth in Asia and Latin America, high-single-digit growth in North America and mid-single-digit growth in Europe."

Annie's Homegrown
Earning space on increasingly crowded grocery store shelves is a rare feat indeed for any company with a new product. Even if you're a packaged goods powerhouse like Kraft or Campbell's Soup, there's no guarantee you'll make the cut. So it's even more amazing when a tiny little company like Annie's Homegrown comes along and retail stores welcome a growing array of its products, pushing aside some of the giants of the industry to make space.

After selling her first food business, the cheddary popcorn snack Smartfood, to Frito-Lay in 1989, company founder Ann Withey decided to experiment with a white-cheddar macaroni and cheese. "I knew there was a niche there," she explained to the Wall Street Journal recently. Capitalizing on the growing demand for organic foods and antipathy towards processed ingredients and trans-fats, Whitey "decided on petite shells to differentiate ourselves from the elbow-shaped macaroni, and all-natural cheddar." Next she had to create demand, so she went to ski resorts, concerts, and parking lots of grocery stores handing out samples of the product with the request, "if you like it, don't tell us, tell your stores!" The target for Annie's products were/are consumers, parents in particular, who were less price sensitive and willing to pay more to feel better about what their families are eating. To support a price that's about 30% higher than the market-leading Kraft, "we talked about the product attributes and how we are bringing the natural and higher-end shopper to their stores," explained Annie's CEO John Foraker.

Today, Annie's has a growing line of 80 products and shoppers can find them in 18,000 grocery outlets, 6,000 natural food stores, and the more upscale warehouse stores and discounters such as Costco and Target. The firm earned $34 million in revenues in 2004. Though Annie's captured just 3% of the mac-and-cheese market—compared to 80% for Kraft—the company's commitment to introducing new products to appeal to its target consumer promise to earn the company even more precious shelf space in the months to come.

Deluxe Financial Services
If you've written a check recently, chances are it was printed by Deluxe Financial Services, the largest check printer in the world. At the turn of the century, the prospect of the company looked a bit grim—thanks to ATMs and other electronic payment methods, demand for paper checks was shrinking at the rate of 3%-4% a year with no going back and by all appearances the industry had commoditized.

Deluxe knew that it couldn't stop the increase in the usage of electronic payments, but it wondered how it could improve its standing among financial institutions to enable it to maximize profits in its current line of business while setting it up for a future relationship as it moved into new services. To answer this question, the company launched one of the largest and most sophisticated strategic marketing studies every undertaken in the financial services industry among consumer end-users and financial institutions. The research uncovered a sizable group of consumers who were very excited about buying more designer checks that allowed them to express their unique personalities and interests, but unfortunately their financial institutions pushed them into the "basic blue" check option. The research also found that, while most institutions weren't excited about "world-class check printing," they could barely contain themselves when it came to help creating unparalleled customer experiences.

Deluxe used this information to develop a service that would address the problems of both consumers and institutions, DeluxeSelectSM. DeluxeSelectSM promised to provide "the right check products, through the right channels, and at the right price." Using the service would increase profitability of the institution's check buying program and to improve the customer experience with the institution. It also used the information to develop the Deluxe Knowledge Exchange Series (KES) as the cornerstone of the company's marketing strategy to help make a financial institution's brand, "the best it can be in the eyes of your consumer."

Results of both DeluxeSelectSM and the KES have exceeded expectations and institutions now see Deluxe as a strategic partner, not just a vendor.

Grey Goose
"Medium-bodied." "Soft, rounded texture." "Plush palate with a delicate edge," are just a few of the words and phrases experts have used to describe the world's best tasting vodka, Grey Goose. While other liquor brands in many of the crowded spirits categories resorted to price-cutting to generate sales, Grey Goose quietly devoted itself to delivering a premium quality product to great success.

The makers of Grey Goose translated the premium positioning through all of its marketing communications and media plans. Prestige sponsorships including the "The Grey Goose 19th Hole" sports program and advertising during hip and popular programs including "Queer Eye for the Straight Guy" reached the target market of young sophisticates. The positioning for the brand—the best tasting vodka in the world—was clearly communicated in all advertising creative.

Most importantly, the brand's managers understood the purchase process of a larger group of imbibing consumers, most of whom could distinguish little taste difference among vodkas in most cocktails and use price as their guide at retail. "We charged $30 a bottle," explained Sidney Frank, the owner of the importing company that built Grey Goose in the U.S. "The next competitor was Absolut at $15. The consumer thinks that if it's the highest priced, it's the best. The difference between $15 and $30 is profit."

A testament to the quality of the product and on-target marketing, Grey Goose's retail sales grew impressively in 2004. Last year it sold 1.8 million cases, up 25% from 2003, according to Adams Beverage Group. Meanwhile, other vodka brands such as Bacardi's Turi only sold around 20,000 cases in 2003. Just seven years old, Grey Gooses' growth caught the eye of Bacardi Limited which recently paid $2 billion for the brand, a stunning 20+ times estimated pretax cash flow.

Hardee's
While bigger competitors including McDonald's and Burger King were focused on developing and offering lower calorie, lower fat, healthier menu options, senior management at the comparatively small (just 2,050 outlets) Hardee's, owned by CKE Restaurants, looked at research that consistently showed that, while American's say they want to eat healthier, they actually do the opposite, and wondered if there was more of an opportunity in heartier products. According to market research firm NPD Group, "Americans have the means to eat healthier. But when it comes down to the privacy of our eating patterns, we eat what feels good." What if, Hardee's wondered, we offered the kind of burger that made customers feel good because it tasted so good?

In 2002, Hardee's restaurants were known more for poor service, dirty restaurants, and bad food. CKE's CEO decided, "If I was going to survive, I needed to do things that people who weren't succeeding were afraid to do," and turned to his product development team to create a new burger that would deliver the penultimate taste experience. He didn't want it to be a cheap burger—he believed consumers would pay more for something good—and he wanted it to include ingredients like mayonnaise that consumers said they wanted, but fast food restaurants didn't offer because of the cost.

As the Thickburger emerged from development to initial positive reaction, franchisees—desperate for something that would reverse their decades-long sales decline—spent $7,000 per store for new grills to cook it and the company readied a record-setting (for Hardee's) $55 million advertising campaign.

Carrying a premium price, Hardee's rolled out the Thickburger in 2003 and sales jumped more than 20%. Hardee's hadn't recorded same-store sales growth since the 1990s, but have now enjoyed consecutive months of it. The average guest check is up by 5% and average restaurant sales have also climbed 19%. Franchisees are happy and, though they comment on the hefty calorie count, critics rave about the new burger. By talking to consumers about their problems instead of just following the crowd, Hardee's has breathed new life into its brand.

Tom's of Maine
It may be a tiny company compared to personal care giants like Colgate, P&G, and Gillette, but the attention and respect Tom's of Maine receives from retailers is the envy of the industry. As CEO Tom Chappell explains, "Tom's gets far more attention from retailers than our volume would normally justify." The company makes a growing line of all-natural, environment-friendly products including a top-selling toothpaste, mouthwash, and deodorant and has progressive business practices such as donating 10% of pre-tax profit to charity and paying manufacturing employees a wage 15% higher than the local median, both of which appeal to a growing number of consumers. But it's the approach this company took to business-to-business marketing that has vaulted the brand to its current heights.

The company first launched its products in the 1970s, through health food stores, a clear fit for the "all-natural," values-based positioning. With little competition, the brand rapidly grew and revenues approached $2 million. Yet Chappell believed the market was bigger and targeted mainstream retailers. The firm took the same marketing practices it had perfected making the product line relevant to consumers and did this for retailers.

Rather than target a merchandising manager, Tom's went straight to the CEO and COO to make the case for the brand. Chappell and his team scoured annual reports and news articles to find out more about the retailer's values and then integrated those into the pitch as example of shared values. Next, they pointed to the fact that all-natural ingredients and values-oriented positioning supports a premium price and, therefore, would earn higher margins from consumers who were willing to pay more. Tom's also developed a program called Common Good Partnerships to build product promotions around social and environmental causes, and encouraged retailers to "bask in Tom's halo." Retailers could, therefore, promote their community-oriented and philanthropic practices by selling the Tom's brand.

By understanding the motivations of its business-to-business customers who want to make more money and make their brands stronger, Tom's has won over leading regional and national retailers, including giant Wal-Mart. And the brand keeps growing: Tom's revenue will top $40 million in 2004, up from roughly $35 million last year.

Past Inductees

McDonald's
We think the period from May 2003-May 2004 will go down in history as the time McDonald's turned itself around. For the last several years, McDonald's has struggled to come up with a strategy to bring people back to its restaurants around the world. In comes new management in 2003 with a "Plan to Win" and a much-needed focus on improving marketing and operations, particularly service. "Plan to Win" outlined steps for the company to take throughout all 30,000 restaurants around the world to boost the "relevancy" of the brand in consumers' lives. Led by Larry Light, a marketing guru, first came the national launch of two highly successful (and tasty) products, the McGriddle breakfast sandwich and salads with Newman's Own dressing. Next came the worldwide, "I'm lovin' it" ad campaign. With a hip-hop, modern flavor, the ads have proven to be a hit among the targeted younger set. More recently, the chain responded to the low-carb craze offering bunless burgers, as well as to obesity concerns with a reduction in portion size and ads and other marketing programs that encourage exercising. Comparative store sales (sales at stores in operation at least 13 months compared year to year) have been consistently positive, restaurants are seriously addressing service problems, and analysts are changing their ratings on the stock form hold to buy.

Tropical Rhythms
A few short years ago, Grace Kennedy, one of the Caribbean's largest and most dynamic conglomerates, saw an opportunity in the single-serve juice category, but it wasn't alone. Packaged goods powerhouse Campbell Soup already had a market toping entry with V8 Splash. Through research, the company discovered consumers were open to considering other juice brands, particularly from companies they trusted and/or offered healthy options with quality ingredients. The company diligently conducted a series of concept and taste tests to perfect its new product offering and finally launched Tropical Rhythms in November 2001. Tropical Rhythms quickly became the Caribbean market leader, with a 50% share—cutting V8 Splash's share in half—and helped propel the Foods Division out of the red and into the black. Only a year after its introduction in export markets, year-to-date international sales were up by 114% in 2003. Another feather in Grace's cap, Tropical Rhythms received the Caribbean Innovative Product Award from Caribbean World Magazine and the Canadian Grand Prix New Product Award for 2002-2003.

Capital One
"What's in your wallet?" When Capital One posed this question to Americans—millions of whom had a Capital One card—in the late 1990s, consumers knew they had a Visa or Mastercard, but few had any idea who the issuer was. So the credit card firm undertook a large-scale research study which found consumers had a problem with the "lack of straight answers, dense legal jargon, and conflicting and complex information," coming from credit card companies, not to mention the volume of direct mail. The concept of the "No Hassle Card" credit card emerged from this research and, after further testing and refinement, the card and the supporting "What's in Your Wallet" ad campaign—featuring marauding pirates, scary snow creatures, and an out-of-control avalanche, all symbolic of the hidden fees and "catches" to credit card deals we presume—hit the market in 2000. Within three years, brand awareness of Capital One jumped from 61% to 96%—the largest increase of any credit card or banking company. Response to direct mail and use of the card also increased dramatically. The company won the 2003 Advertising Research Foundation's Ogilvy Research Award, which annually recognizes research that drives effective communication, in the services category. Most importantly, sales and net income have both nearly doubled since the launch of the "What's in Your Wallet" campaign.

City of Las Vegas
Throughout the 1990s, the City of Las Vegas tried to put on a family-friendly face and compete with the likes of Disneyland and SeaWorld for family tourist dollars, which it believed would be a lucrative strategy. But "Sin City" and family-friendly didn't seem to mix. "The strategy wasn't working," explained Mayor Oscar Goodman. After extensive research into potential positionings, the city dropped the flailing family-friendly ad campaign and infrastructure changes, and reversed course with a new effort that focused on leaving adult cares and worries behind and coming to Vegas. The most recent iteration of the campaign turned up the heat a bit. With the tag line, "what happens here, stays here," ads show people living life on the edge, so to speak in Vegas, then returning to their regular lives. Meanwhile, casinos and hotels have updated décor with more adult looks and themes, adding nightclubs and more sensual, adult shows to appeal to the people who have left their kids behind. Since introducing the new strategy, revenues are up and the city has become a leading destination for adults looking for a fun escape from the every day. Update: Brandweek selected the CEO of the Las Vegas' ad agency and the president and CEO of the Las Vegas Convention and Citizens Authority Grand Marketers for the year for their work to position Las Vegas as the center for "adult freedom."

Couche-Tard
The Canadian firm Couche-Tard, the third largest retailer in Canada and the fourth-largest convenience store operator in North America, takes a counterintuitive approach to competing against industry giants such as 7-Eleven. Rather than build identical stores with identical product offerings, Couche-Tard has shunned the cookie-cutter style of competitors and customized the design and merchandise of each store based on the customer profile of its various locations. "When you know who your customers are," explains Alain Bouchard, Couche-Tard's CEO, "that gives you an edge." In the Midwest, for example, where the chain owns and operates Bigfoot and Dairy Marts, stores in upscale neighborhoods stock a higher proportion of imported European beers, while those with a big Hispanic customer base stock more Latin American brands. One store in Calgary caters mostly to children and stocks 12 flavors of a Slurpee-equivalent (Slurpee is 7-Eleven's sugary frozen drink), while a few blocks away where neighborhood residents are older, the store has a café section where customers can sit, drink coffee, and read. Store décor also varies by location and the corresponding customer profile. Revenues climbed by almost a third in 2002 and by 50% in 2003 (due in part to the acquisition of 2000 Circle K stores in the US) in a category that has seen shrinking sales of core products such as cigarettes and is relying more and more on low-margin gasoline to survive.

Newman's Own
Bearing the name and face of big screen legend Paul Newman, this private company makes an expanding and continuously delicious line of foods including chocolate bars, lemonade, popcorn, salad dressings, and spaghetti sauce. Interestingly, it isn't Paul's association with the product that's the draw for consumers. "The younger generation doesn't buy the stuff because of me," admits Mr. Newman. "They don't even know me." Instead, it's the high quality of the products and commitment to giving 100% of its profits to charity that has this premium brand flying off the shelves. And they are flying—the company has consistently increased profits by more than 10% each year. To make sure it delivers a significant contribution to charity, the company considers itself a philanthropic enterprise and maintains a staff of less than 20 people, outsourcing productions, distribution, etc. The staff of 20 focuses on developing new product ideas and sends them out to suppliers to produce samples for Newman's very own scrutiny. Because of its strong commitment to quality and charity, the brand has grown in stature. McDonald's and Costco inked deals with Newman's Own, hoping to capitalize on the brand's power and appeal.

Blue Man Group
From humble beginnings way, way off-Broadway in 1988, Blue Man Group—a combination musical/play/performance art exhibition starring three non-speaking, literally blue men—has become a virtual cult brand boasting 38 cast members with permanent gigs in New York, Boston, and Las Vegas. As the show's popularity and box office receipts started to grow, the creators integrated the performance and business aspects of the show, uniting all functions behind the Blue Man brand vision. The group has a 132-page operating manual, complete with a "corporate" mission statement focused on preserving artistic integrity above all else. All new employees spend months of intensive training learning both the performance and the philosophy of the brand. The group has been just as meticulous in evaluating offers from companies to appear in commercials—turning down even the most lucrative offers if they have anything to do with the color blue, including one from American Express. Solid brand management has certainly fueled the Blue Man fire in a country that doesn't typically embrace nontraditional or performance art.

BMW
BMW has set its sites on the U.S. luxury-car market with a goal to boost sales by 40% within six years. That's an ambitious goal under any circumstances, and BMW is ready for the challenge. Relaxing its focus on performance sedans ever so carefully, the company has begun to cultivate the lifetime value of customers, offering entry-level luxury with its 3-series, as well as sports utility vehicles for the family-minded driver. To grow sales further, BMW plans to continue to expand its line of product offerings. "We will be in many segments," explained BMW's chairman Helmut Panke, "but with premium solutions." True to form, BMW has maintained the quality, style, and performance of all of its lines, and limited production to add to the aura of an in-demand brand. Though the company's forecast is cautious for 2003, profits were up 8.3 percent in 2002 and BMW is not stuck on short-term gains as many other car manufacturers seem to be. Strict adherence to delivering on its positioning has vaulted BMW to the top of the luxury car pack and will keep the company there for a long time to come. Update: Fueled by the wildly popular Mini-Cooper, BMW's sales grew 16% in 2004 with net income up by 24%.

Citizens Financial Group
One of the largest banks in New England, Citizens Financial Group takes its advertising tagline, "Not your typical bank" very, very seriously. Recognizing that most competitors can and do offer similar banking products, Citizens decided to differentiate itself from other super regional banks by delivering exceptional customer service. As Larry Fish, Chairman, President, and CEO of Citizens Bank explained, "Citizens has always made customer service one of the cornerstones of our banking principles. It all starts with the customer." The company broke with industry norms by offering extended evening, Saturday, and even Sunday hours. Rather than spread existing staff thin across the additional hours, Citizens hired more managers and tellers whose good deeds for customers have become the stuff of legend (not to mention commercial spots). Citizens' employees have been known to return a stuffed animal left behind by a customer's child at a branch on the way home from work; run outside to hold an open parking space so a customer can park; and even wire their own money to a customer stuck overseas without a bank card to cover expenses until a new card arrives. Citizens continues to expand into new markets with its legendary service, building loyalty and earning record cash operating earnings year after year. Update: Since implementing its service-focused strategy, Citizens has grown from $3 billion in assets to $140 billion and is the tenth largest bank in America. Business media and industry analysts regularly refer to CEO Larry Fish as a banking genius.

Jollibee Foods Corporation
When McDonald's began to open restaurants in the Philippines in 1981, the Golden Arches naturally assumed it would dominated the market in a matter of months. After all, it had transplanted its famous fare to markets around the world and experienced booming business. Burger King had similar visions of grandeur. Yet both struggled to compete with local fast-food powerhouse Jollibee. Not to be intimidated by the two international burger giants, Jollibee focused on perfecting products that appeal to local tastes and a service environment where employees "out smile McDonald's." It stayed true to its local focus even as McDonald's and BK encroached with their world-famous offerings. By responding to customer needs and wants, Jollibee has not only survived, but thrived. Update: McDonald's and BK's prospects have improved worldwide, but Jollibee is still going strong. The company today owns 1,000 locations in the Philippines, as well as in California and Guam. Sales increased 2.9% at a time when quick service restaurants in general have seen slow growth, and net income was up by 16%.

Skol
Companhia Bebidas das Américas (AmBev) came about when Brazilian brewing giants Brahma and Antarctica merged in 2000. At the time of the merger, the Skol brand held a 26% market share in Brazil, but AmBev had bigger ambitions for the brand. The company launched an intensive project to better understand beer consumers and retailers. Armed with data, AmBev set about building a powerful targeting and positioning strategy, new distribution channels, new packaging for bottles and cans, line extensions, and new merchandising and advertising strategies, carefully testing options along the way. The result was nothing short of revolutionary. Today, Skol is the #4 brand in the world without a bottle or can sold in North America. Watch out Budweiser! Update: AmBev merged with Interbrew to create the world's largest brewer, InBev, and Skol holds the top position in its home market.

Ultragaz SA
Ultragaz SA and their army of deliverymen distribute gas to about 15% of all Brazilian homes—that's about 18 million households—each month throughout the country. Most stoves in Brazil run on gas rather than electricity and, other than in Brazil's largest cities where piped gas is available, most households require on-going deliveries of gas balloons for power. Spying an opportunity to leverage their national reach and the close relationships its gas deliverymen had developed with customers through frequent contact, Ultragaz in 1995 began offering multinational firms such as Nestlé, Procter & Gamble, and Unilever the chance to distribute samples through them. These days, for roughly five cents a unit, Ultragaz deliverymen will give sample products to customers during their regularly scheduled deliveries. In addition to earning extra income for the company, offering samples has further strengthened relationships with customers who feel like they are getting something extra. As Valdir Righetti, marketing manager at Ultragaz, explains: "Our core business is gas distribution, not sample distribution. [But teaming up with companies like Sara Lee] improves our relationship with our customers. It's like we're giving them a present."



Apple
For an industry that has let what a former Dell executive referred to as "Dell envy" drive prices down to rock-bottom levels, one company has bucked the trend of commoditization: Apple. PCs may just be hardwired boxes, but Apple computers are attractive digital hubs with neat extensions and applications like iPod, iPhoto, iMovie, and iTunes. Apple is not discounting, in fact, many of its best selling products—the iPod for instance, at $400+—are higher prices items. Though its share of the U.S. household computer market remains relatively small and in 2004 actually shrank, the runaway success of iPod has many thinking that Apple could become a commercially powerful company for the first time in over a decade. Update: iPods have become a cultural phenomenon. IPod and iTunes command more than 65% of their respective markets. Net income soared by 300% in 2004 and Fast Company called Apple, "the world's hottest company."

Clif Bar
Apparently Nestlé and the other huge packaged goods firms that make energy and nutrition bars don't think taste matters. The more tasteless, chewy, and generally unappetizing the energy bar the better, their thinking must have gone. Disgusted by current offerings, Gary Erickson, founder of Clif Bar, developed a yummy and hearty product, and delivered the clear message that Clif Bar is, "the energy bar that tastes good," through all marketing communications efforts. For the past 5 years, Clif Bar has consistently gained market share and outpaced industry standards for revenue growth. In 2001, its Luna line of nutritional bars for women became the top-selling brand in the energy/nutrition bar category in grocery stores, grabbing the #1 position away from Power Bar.

MTN
A cellular network operator launched in South Africa in 1994, MTN is one of the best examples of companies that have taken a customer-centric approach to marketing and business operations. Cognizant of Africa's up-and-down economy, MTN was the first in Africa to introduce a "pay-as-you-go" service option and offer other products and services geared to customer needs at a good value for the money. The company's community service program, which provides subsidized mobile phone service to underprivileged areas, further demonstrates its commitment and focus on customers.

Pepsi-Cola, Code Red
Pepsi introduced its Code Red line extension in May 2001 using a comparatively quiet grassroots approach to slowly build momentum for the product—an approach many marketing experts consider the most effective with teens. The company allowed its intended target of 13- to 19-year-olds to "discover" the new red Dew in vending machines, on-line, at sampling events at malls, and at sporting events like the X Games a few months prior to the roll-out in stores. Once in stores, Code Red wasn't available in 2-liter containers so teens would discover it before their parents did—helping to curb cannibalization of the original Mountain Dew. Only later, after continued sampling efforts, did Pepsi air "hidden-camera" like spots capturing professional basketball players and a popular singer in what appeared to be spur of the moment activities drinking Code Red. By the end of the year, Code Red had become the No. 8 carbonated soft drink in the convenience store channel and was well on its way to becoming the most successful new product launch in the soft drink category in more than a decade.

SSAB
Not all business-to-business customers care about price, even in commodity businesses. SSAB, a Swedish steel manufacturer, transformed itself from a declining state-owned company to a stronger, more profitable industry player by concentrating on developing products used in very specific applications. It branded these narrowly focused products—used to make earth-moving and other heavy-duty equipment—and built a separate sales force to distribute them directly to buyers at equipment manufacturers. Though these niche market products account for less than 20 percent of SSAB's sales, these products provide more than half of the company's profits.

Tesco Supermarkets
With 907 stores in 10 countries and one of the world's biggest online grocers—not to mention one of the few that makes money—Britain's Tesco grocery chain exemplifies a company that has put marketing at the center of its business universe, and embraced customers as the only source of real growth. Tesco doesn't make a decision without consulting customers first. Based on feedback from customers, Tesco introduced its own private label goods and began a policy called "One in Front," that calls for stores to open another register whenever the checkout line exceeds two grocery carts. Both expensive and, at the time, controversial moves that caused temporary drops in share price, but rapidly built the business.



Banana Republic
When it comes to retail makeovers, few have been as dramatic, or as successful as Banana Republic. Headquarters of the adventure/safari look of the 1980's, the retailer altered its merchandise and its store to become the modern casual lifestyle retailer of the 1990s. Facing possible bankruptcy when consumers shunned Banana's once-popular safari look, the company used consumer research to find a huge gap in the retail market—the "dress-casual" zone. The company began developing a modern versatile wardrobe, resting somewhere between the formality of Brooks Brothers and the weekend wear of Gap, and a complimentary new look for its stores. Nearly ten years later, the chain has been expanding year after year, new product lines have been introduced and most importantly, a new category was defined.



Charles Schwab's Schwab.com
Charles Schwab claims some 7.5 million brokerage accounts with more than $870 billion in assets. A whopping 4.3 million of those clients are using its online services through Schwab.com and online trades represent 81% of all trades through Schwab. Schwab recognized early on that making an on-line business profitable took more than getting customers in the door, so to speak; you have to deliver real value to get people to buy and keep coming back. Schwab.com has consistently delivered; Gomez, the Internet quality measurement firm, historically ranks Schwab highly in the Customer Confidence and On-Site Resources categories, as well as in the Ease of Use and Relationship Services categories. Additionally, Schwab.com has received accolades for its tight integration of quotes, charts, news, research and trading, as well as real time account information and automated performance analytics. The company consistently demonstrates its ongoing efforts to deliver real value to their customers.

Dayton Hudson's Target Stores
At a time when discount stores like Kmart are struggling to compete with industry lion Wal-Mart on price and inventory, Target has taken the opposite approach. What may seem counterintuitive for a discount store, Target has positioned itself as a fun, hip, almost upscale store, with everything from fashionable fleece pullovers to Tide detergent. With superstar Tina Turner singing its praises in some TV spots and a retro look to others, along with catalog inserts in Martha Stewart's Living which have the look and feel of Crate & Barrel, Target seems to have taken the "discount" feel out of discount stores.



Ernst & Young's Ernie
As many traditional businesses struggled to determine an Internet strategy in the late 1990s, the venerable consulting firm Ernst & Young saw the Internet as an important new opportunity to target the small business owner. The company created an online service, where for $500 a month, small business owners could ask unlimited questions of an online Web site and get guaranteed consulting delivered over the Internet within 24 hours. Rather than try to brand its "online consultant service" promoting the brand attributes of Ernst & Young—a consulting firm known for its blue-suited, big business clients—the company created Ernie, E&Y's more accessible and understandable online persona. Every interaction with the consumer, from advertising to the Intranet, from collateral to customer service, was infused with this new persona. The service captured six million dollars in the first month of operation. Today, there's a waiting list to get in.

Green Mountain Energy
Facing the prospects of deregulation, a tiny company called Green Mountain Energy located in Burlington, Vermont, started to worry about competing with national power companies that could afford price cuts to attract customers. With becoming the low cost producer an absolute impossibility, the company instead began to look at other differentiating factors to power for which customers would willingly pay more. The company discovered a significant number of customers wanted clean energy and would pay more for environmentally-friendly power. The company created targeting, positioning, and advertising promoting their focus on "clean, green power." The company today is positioned to compete with corporate giants.

Krispy Kreme Donuts
Whether you drool over their donuts or not, Krispy Kreme has developed a loyal brand following nationwide, helping it to launch the second most successful IPO of 2000. Founded in 1937, Krispy Kreme has slowly and carefully nurtured the cult of the doughnut using its product, stores, and marketing communications to cultivate appreciation of its core product. Whether it's through the layout of its stores that allow customers to watch the entire donut production process; illumination of the "Hot Donuts Now" signs; or product placements on hit TV shows, Krispy Kreme has developed a leading product and clear positioning. As the company expands, sales continue to grow by double digits. Update: Unfortunately, the managers of the Krispy Kreme brand put on the cruise control. The company continued to expand nationally seemingly in any retail outlet that would take it, damaging the hard-to-get, celebrity status of the product. The grand opening focus and word-of-mouth strategy wasn't adapted as the company expanded and encountered greater competition. In fact, Krispy Kreme's marketing behavior earned it a spot in the 2005 Hall of Shame.

Mazda's Miata
In 1989, Mazda, Japan's fifth largest car-maker, introduced the Miata, a stylish and zippy two-seated sports car. The Miata hearkened back to the open-air feel of British sports cars of the '50's and '60's, but without the famed mechanical problems of its predecessors. Recognizing the opportunity for an affordable two-seated roadster among a target of aging baby-boomers, Mazda limited production and set an affordable, yet not rock-bottom price, selling 37,000 Miatas in the car's first few months in the market. Though sales have slowed to about 20,000 as competitors such as BMW have introduced competing models, Mazda has used the popularity of the Miata to boost the image of its other cars and has kept the product true to its original concept for over 11 years. VW, Honda, and BMW have all tried to duplicate the retro- and sports-car success of the Miata.



Michelin North America
Michelin has spent years building equity in a safety positioning for its tires. Its tag line, "There's a lot riding on your tires," and campaign featuring babies seated a top tires clearly communicated the benefit of the product and the importance of the tire decision: the lives of your children ride on your tires. In 1999, Michelin took the campaign one-step further and directly targeted the group most concerned with safety: young mothers. One advertising spot featured a baby shower where the mother-to-be received four Michelin tires. Replacement tire sales for passenger and light trucks continue to grow for Michelin in North America.

New Balance
While other sneaker companies like Nike and adidas courted celebrity endorsers and the fickle teenage consumer, New Balance has built a loyal following among its target who appreciate the substance of their shoes more than the style. New Balance seemed to recognize early on that not everyone sees sneakers as a fashion item; they demand fit, support, and performance, rather than fashion fluff. Offering a variety of shoe widths, the company built a solid reputation for more customized, high-performance sneakers, with a distinctive look rather than chasing the latest fashion craze along with everyone else. New Balance's advertising celebrates the everyday athlete and the performance aspects of their products. As a result, New Balance has become the second largest sneaker manufacturer, when not including apparel, behind Nike.

Pepsi's Mountain Dew

The only soft drink growing in market share, Mountain Dew has a clear targeting and positioning strategy, and subsequently created a differentiating lifestyle choice for Dew drinkers. Dew drinkers are young, Gen-Yers who like extreme sports such as skateboarding, snowboarding, and wakeboarding. Drinking Dew is part of their extreme, no-holds-barred existence. Mountain Dew takes advantage of highly integrated marketing communications, where all elements from advertising spots, to sponsorships, to promotions, to the website clearly reflect the attitude and lifestyle of their target customer. More companies should "Do the Dew."

Wendy's
While the other burger chains battled back and forth trying to out cheap each other, Wendy's focused on the taste and quality of its menu offerings. Rather than discount its limited-time only sandwiches, Wendy's pioneered the 99 cent Super Value Menu—a move quickly replicated by Burger King and attempted in various forms at the regional level by McDonald's. The focus on new products rather than on cheap prices helped Wendy's address the growing concern about fat and calorie content with its chicken sandwich, as well as the wrap-sandwich craze with the highly-popular pita sandwiches. Wendy's promotions and advertising focus primarily on the new sandwich of the month, which the company sells at full-margin, rather than at a discount. Customers actually have a reason to visit a Wendy's restaurant to try out their newest menu offer. Although it still ranks number three in the fast-food category, McDonald's and Burger King envy Wendy's position. Update: McDonald's and BK replicated Wendy's new product strategy to great success, while Wendy's itself has stumbled. The company had yet to find a successful advertising campaign. Still, the company's dedication to innovation leads us believe the current troubles are just a minor bump in the road.

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