Ronn Torossian Update

News and Updates from 5WPR CEO Ronn Torossian

Bigger is, once again, better!

bigger smaller marketing public relations

There was a time, not long ago, when American consumers were thinking small. Smaller cars, smaller portions, even smaller homes. Those days are over. If the Small Movement was ever a trend, consider it done.

When you ask retail CEOs, they will all tell you, Americans want Bigger along with their Better. Those two modifiers go together in the American consumer brain like peanut butter and chocolate. This newfound return to excess crosses just about every consumer segment.

In consumer electronics, as tech gets increasingly more advanced, wireless and communicative, consumers are back to wanting bigger TVs and other devices. Sure, iPads are still selling, but the “mini” experiment? Not going as well as expected. And when it comes to TVs, size does matter. Expect consumers to be shopping for something in excess of 55 inches.

But bigger isn’t just about size. Consumers are after big ticket items this year as well. Expensive vacuums, kitchen tools and sound equipment are all selling well – from mixers retailing for hundreds to headphones selling for twice that.

Part of the trend, according to retail PR managers, is a healing economy. More people are back at work, and everyone seems to have a better opinion of where the economy is headed. More enthusiasm nearly always translates into better consumer sales.

Another popular More Is Better campaign: food. Organic and specialty foods are no longer only for boutique grocers. Even the most mainstream grocery stores have expanded the organic sections. Twice the price for milk and eggs? Half again as much for cereal or fresh fruit? Consumers don’t seem to mind.

The biggest aspect of this good consumer PR outlook is the attitude. Buyers aren’t looking at these Bigger And More expenditures as luxuries or splurges. They are making them part of their basic spending routine, spending on quality and convenience rather than price. Aside from anything else, that is the trend retailers wanted most to see. When people stop worrying so much about pennies and start spending dimes to get what they really wanted all along, that will keep going until consumer confidence begins to flutter. Which, at this point, may be a long time coming.

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Is Alibaba Getting Even Bigger?

alibaba

When it comes to business success, bigger and more is almost always better. Particularly when you can take something struggling and turn it into a winner … or better still, take a winner and turn it into an untouchable dynasty. That’s exactly what Alibaba founder Jack Ma is hoping to accomplish on the heels of his company’s takeover bid of the South China Morning Post, Hong Kong’s leading English only daily newspaper.

If the deal goes through, Ma will be added to an ever growing list of Internet tycoons turning to print media in search of profit. Not that long ago – back in 2013 – Amazon CEO Jeff Bezos came out of his own pocket to purchase the Washington Post. In 2012, Facebook co-founder Chris Hughes bought a majority stake in the New Republic.

It’s more than just an investment in a huge media brand. These guys are making a statement about the profit potential of print media.

And it’s coming at a time of continued upheaval at storied print brands. SCMP is no exception. At the end of the year, current South China Morning Post editor-in-chief, Wang Xiangwei, will be moving on. Wang’s deputy, Tammy Tam, will step into his shoes, according to a company announcement.

While the reason has not been given, SCMP has experienced some of the same downturns as its international competitors – loss of revenue and decreasing circulation.

Like Bezos, Ma believes he has the magic touch to turn that situation around … even without increasing demand.

Of course, some market watchers are concerned that, like Bezos, Ma is a monopoly guy, that he has a long game that includes control of all major media in every market. Recently, his firm bought Youku Tudou, basically Chinese YouTube, adding this brand to Alibaba’s unequaled stable of Internet properties.

In an age where Old and Stable is losing traction to New and Omnipresent, a good manager understands how to get the most out of both. Ma is betting he has the right stuff.

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Tesla Invites Customers to Customize their Car

Tesla Public Relations

In recent months, Tesla has been on a public relations roller coaster. From the release of new models and new features to the unfortunate recall of these high-tech vehicles for a simple seat belt latching issue. Now, they’re back with a strong vengeance: Personalize your Model X.

The SUVs are not the most popular Tesla models … everyone seems to love the sports cars … but those who want an electric SUV are sure to salivate at the opportunity to personalize their new truck.

The deal currently only applies to those who previously reserved their vehicle. But the offer still makes for strong international PR. One of the biggest hindrances to past one-off car companies (think Edsel or DeLorean) is that they also have limited market potential. Sure, they are cool trendsetters … but that’s ALL they are. Once you look behind them, there is nothing. So, if the manufacturer can’t keep people focused on their Great Idea, consumers move on without a second look.

Now Tesla gives them a specific reason to take another look. They started with a bang, doing what people said could not be done: the fully electric performance car. Now they follow up with another “can’t be done”: the fully electric SUV.

A closer look reveals Tesla specifically targeting the things garnering them the most attention. Sure, they could have made another subcompact electric car … but that’s old hat. Who cares … “next, please.” But a sports car actually getting Sports Car Guys excited? Now THAT was worthy of attention. Now, they are going after a very specific market: SUV moms who love the luxury crossovers and grocery getters.

It’s an interesting tactic, given folks who choose those vehicles don’t tend to care overmuch about gas mileage. Then again, these folks do want to be noticed. Status is important. So is luxury … and nothing gets you noticed quite like having something, almost literally, no one else has. Not just on your block, but anywhere.

That’s why attention-grabbing consumer PR is important to Tesla. Even if they don’t have the supply to meet the demand generated and, in part, because of it.

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Did Crest Mislabel their Product?

Few people noticed, but Crest’s mouthwash once featured one very questionable label. Whether it included an actual error, or left meaning open to interpretation, the phrasing was dubious. On the label, Crest promised customers 24-hour protection, but required them to use the product twice per day.Wouldn’t the need to use the product twice in 24 hours mean that it only offers 12-hour protection? Anything can offer 24-hour protection if you take enough of it, or use it several times per day. However, it seems unlikely that this was the message Crest wanted to bring across to the masses.

Even so, that is how the company chose to phrase it. Whenever Crest got the chance to elaborate on the benefits of the mouthwash, it phrased it as “24 hour protection against plaque and gingivitis when used twice per day”. This brilliant re-working showcased creative PR work. In fact, not even internet trolls saw through the mistake and the brand remained basically untouched. Still, the company took no chances, as it quickly introduced a new label for the next batch of Crest’s Pro-Health Invigorating Clean Multi-Protection Mouthwash. In fact, Crest removed the product with the old label from the website and even threw in a new bottle. Today, the new front label only informs that the product fights plaque and gingivitis.

It no longer provides directions on how often the product should be used. It also no longer states how long the protection lasts from using the product. This radical re-design to remove such bold claims implies that Crest made the original label in error. While this shows creative ways to handle the problem, other companies can handle this issue differently. Aside from attracting internet trolls and bad press, mislabels can create legal problems if it makes false claims. Companies may also face legal troubles if labels do not include ingredients that may prove harmful or lethal to users.

In these situations, public relations and legal teams advise companies to recall the product to ensure the safety of users. If customers suffer harm from using the product, the company may easily face expensive civil or class lawsuits. However, the mislabeling of the Crest mouthwash did not threaten the safety of any customers, so there was no immediate need to issue a recall.Companies can also utilize good old honesty in this situation. Customers do not take kindly to companies making mistakes. Ironically though, they like to see companies take responsibility for their errors, especially when they didn’t even notice one was made. This paints the picture of a proactive company, which prides itself on honesty and transparency. In short, it builds trust.

Crest could also easily turn the situation into a humorous one by featuring ads that might show comic versions of how the mistake was made. Maybe a villain from a competitor broke in, or a worker with bad allergies sneezed and hit the wrong button. This would make for quite an interesting campaign which both admitted to the issue, but offered a comic apology.The company could also use ads which showcase that “doubling up just in case” remains a more effective method of doing almost anything than just relying on the bare minimum – including using their mouthwash. This too could use comic ads to express the message.

Ultimately, Crest used neither of these methods and managed to cruise through undetected with the help of a good marketing and public relations team. With their help, the company weathered a storm the rest of us didn’t even know was brewing. This shows not just stealth, but a keen knowledge of their consumers and how the market works.In essence, Crest demonstrated the importance of knowing their customers. They knew that most people never spend a great deal of time reading labels, when most mouthwashes promise the same thing. They banked on this hope, coursed through the error, and quickly issued a new design – just in case the label failed to escape the keen eyes of that one person, likely to blast the company for its mistake.

Good going, Crest!

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Chipotle Still Reeling Thanks to E-Coli Scare

CHIPOLTE PUBLIC RELATIONS

Chipotle just felt the “two” of the one-two punch land. Immediately after the CDC discovered an outbreak of e coli in locations in Seattle and Portland social media exploded with endless barrages of consumer doubt and disgust. Recently, the company was forced to disclose the outbreak was not contained and could be in as many as six states. Upon hearing that news, the market responded accordingly. Chipotle stock plummeted about 12 percent last.

Now the company is facing a PR crisis on two fronts: consumer and investor. The consumer PR crisis is bad and getting worse. Every time the CDC announced a new state impacted by the outbreak – California, Minnesota, Ohio, New York, Oregon and Washington have been listed so far – it gets worse for the brand.

The more people who hear about it, the more people are talking about it. That volume also leads to longevity. A relatively minor outbreak could come and go quickly, barely registering a blip on the national news. But now, with locations in six states (and, possibly, counting) involved in the CDC investigation there is no containing this monster. It’s a safe bet that the only reason Chipotle is not the lead story right now is that the POTUS race and refugee crisis are monopolizing the news cycle.

At this point Chipotle is relegated to reporting a rather bleak silver lining. No new cases have been reported in the original epicenters of Seattle and Portland. That’s scant reassurance for a consumer public growing increasingly weary of this outbreaks and wary of mass produced food – even if it’s purportedly healthy.

In quite possibly the worst choice of words, representatives said the outbreak was “contained.” Unfortunately for them, the consumer public doesn’t agree … and they are sick to death of hearing about “contained” threats. Take a wild guess how many times folks have Googled “contained threat” in the past week or so … your guess is probably very, very low. And, while most of those responses will be about Obama’s ISIS comments, there’s Chipotle, mixed in the search responses with … ISIS! Yeah, talk about from bad to worse.

Recently, Chipotle offered a sincere apology. Given the state of things and the unfortunate language used that, however unintentionally, connected their brand with much worse news in the world, it’s going to take more than an apology to make this right.

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Walmart Workers Seeking Wages

Black Friday Public Relations

Black Friday is coming, and some Walmart workers are using the annual bacchanal of retail excess as an opportunity to push their political agenda in a headline grabbing way.

The organization, called “Our Walmart” plans to start a fifteen-day fast scheduled to end on Black Friday. The effort has been dubbed “Fast for 15”, an obvious connection to the Fight for 15 movement, a grassroots group demanding a $15 minimum wage.

According to press reports, the fast will include both current and former Walmart employees as well as other sympathetic citizens. The current roster of participants stands at well over 1,000. At this point, not every protester has pledged to fast for the full 15 days, while the founders of the (non)fast have promised to consume only liquids for the duration.

While most of the protests are planned to be conducted outside Walmart stores, some protesters have pledged to take their show on the road, and fast events are being planned near the NYC home of Walton heiress, Alice Walton, as well as the California home of Walmart heir and current chairman, Greg Penner.

Organizers say the point of the fast is to illustrate the quandary they say many Walmart employees face: they can’t afford to feed their families, even when shopping at Walmart. Organizers tell stories of employees having to choose between eating lunch during their shift or putting enough fuel in their cars to get home. It is those sorts of situations, they say, that necessitates such an extreme response.

This protest is expected to coincide with other protests that are becoming typical on or around Black Friday. This will be the fourth consecutive year that similar protests are planned.

All of this despite the fact that Walmart did indeed raise wages last year, and the starting wage for full time employees is expected to increase to $10 next year. Department managers will get between $13 and $15 per hour. Not a lot for a management position, but still more than they are getting now.

Walmart’s in a tough spot, though. The general public loves to shop there, but ask just about anyone who the most hated store in America is, and Walmart will likely end up on the list. Add to this common theme the fact that the last time Walmart raised wages, its stock price dropped, aggravating shareholders.

Now Walmart’s decision makers have that to worry about, plus typically dissatisfied employees and, now, this new PR nightmare. They need to come up with a solution, fast, or this one could spin out of control.

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Why A-list Star Power is Not Enough

Old Hollywood

In the salad days of Old Hollywood, when the studio system ran Tinseltown, Star Power mattered more than anything else. Theater fans didn’t go to see this or that movie. They went to see the latest movie starring this or that person. And, when people didn’t know much more about a film than who was in it, that worked wonders.       

Today, not so much.

In an era when even teaser trailers are endlessly dissected and discussed online, no movie is safe from negative impressions before release. And, if a film deviates from a proven formula, the results can be financially disastrous and catastrophic for an actor’s career.

Making a “bad” movie when you are a relatively new actor can send you searching for a new career. Even established actors can crash and burn. Two prime examples, Kevin Costner, and Mel Gibson, offer a stark contrast in what can happen with the so-called passion project, when an actor puts everything into a role and thinks, suddenly, everything they will do is a success.

Costner struck gold with “Dances With Wolves” Everyone loved it, and it catapulted Costner into rarified air … so much so that he made “Waterworld” and “The Postman”. While both movies had their fans, neither was a success, costing the star and the distributor a ton of cash.

Ditto Gibson. “Braveheart” was a critical and financial success. And, though reactions were decidedly mixed, “Passion of the Christ” made ridiculous bank. Then came “Apocalypto”. For most people, not even Gibson’s yet to be tarnished name was enough to ensure success.

The latest misstep in this regard goes to two Halloween releases, the Sandra Bullock vehicle “Our Brand is Crisis” and the Bradley Cooper movie “Burnt” opened to great fanfare … and nobody showed up.

Now, on one hand you could argue the timing was terrible. Do people really want to see political dramas or passion projects when they are thinking about ghosts and zombies? Apparently not.

But the trends say it was more than timing. People are simply not going to movies for the stars anymore. They want story. They are consumers looking for a particular product, not a particular face. There are a lot of reasons for this. Overall, fewer people go to the movies less often. Streaming steals huge numbers from cinema audiences. Sure, throngs line up for “Star Wars” and “The Hunger Games”. But they also want to see “The Fault in Our Stars” or a dozen other films with no-name actors and great marketing

Some actors and studios figured this out. Many find success releasing so-called passion projects directly onto streaming platforms. Where, not that long ago, a “straight to video” release was code for “bad movie,” that dynamic changed dramatically. In today’s diluted, overlapping media marketplace, where lines are thinner and consumer demand is in the driver’s seat, even A-list actors chase the streaming dream. Kevin Spacey, Brad Pitt,and  Frances McDormand show their colleagues how it’s done. Expect more to follow.

And while, in the right project, Big Names still put butts in the seats, people probably would still go to see “American Sniper” or “The Blind Side” with lesser known names in the lead role.

Bottom line, consumer tastes change, and these shifts directly drive the market more than ever before. If studios and stars don’t adjust their expectations, they too will join Bullock and Cooper playing to empty theaters all across the country.

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Zuckerberg Sends Kids to School… His Own.

Mark Zuckerburg PR

Facebook founder Mark Zuckerberg has made a name for himself with winning business ideas. He understands how to engage people, bring them together and give them what they want. Now, with the help of his wife, Priscilla Chan, Zuckerberg embarks on an entirely different business model. Private school.

The Zuckerbergs’ new K-12 private school, “The Primary School”, in Palo Alto, California functions as a private, nonprofit educational institution. One different twist: the school offers healthcare services to every student, from birth to graduation.

On a recent Facebook post, Zuckerberg explained, “It’s a new kind of school that brings education and healthcare together.”

According to various media reports, the school will be free, geared toward low-income students and funded by a donor advised fund. One report stated the school may even offer prenatal care for students registered prior to birth.

The healthcare at the school will be administered at an on-site clinic, in partnership with the Ravenswood Family Health Center, located near the school. In addition to student care, Ravenswood will offer comprehensive health and dental care to their entire families.

“Health and education are closely connected,” said Zuckerberg, “When children aren’t healthy, they can’t learn as easily. Many kids and teachers across the country deal with the consequences of poor health in classrooms every day.”

Chan, in addition to being his closest partner, is also Zuckerberg’s perfect partner for this endeavor. A pediatrician, Chan once taught elementary school science. The couple has been developing the initiative for the past year. In a Facebook post, Chan said her own educational experiences motivated her to “find a better way of caring for and educating children.”

As with Facebook, Zuckerberg plans to start small and grow organically. When it launches in 2016, Primary School will only offer classes to four-year-olds as well as support programs for parents of infants to two-year-olds. The school plans to add a grade each year, so this incoming class could, eventually, become the first graduating class.

Some have said private schools are the wave of the future. Others decry the movement toward less public education. The jury is still out, but, regardless, ideas that work in one place can work in others, even if they have to be adjusted to fit specific infrastructures. There’s no doubt educators will line up on either side of this issue, but the side with the most effective messaging will win the future of education in America.

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VW’s New Boss thinks his Brand is Only Headed Up

VW PR Crisis

Fall has not been kind to Volkswagen. An international scandal rocked the brand on two continents. While the literal price tag has yet to be tallied – VW expects it to cost them billions – the PR price tag has led to immediate changes at the top and among the rank and file. As expected, newly installed VW CEO Matthias Mueller says there’s nowhere for his company to go but up. He expects a shining new VW brand inside of three years. That’s an optimistic timeline, considering they will probably still be tabulating damages at that point, but, hey, a guy can dream.

In his recent address to company managers, Mueller said the company needed to grow leaner and make decisions faster. Hmm. Interesting take considering VW is in the process of recalling 8.5 million cars in Europe and 2.4 million in the U.S. due to some fairly hasty decision making. Seems like the message ought to be not just quick decisions but “right” decisions.

While that statement may not quite be a misfire, other recent decisions have definitely kept VW in the PR loss column. According to German media reports, the KBA rejected Volkswagen’s proposal encouraging customers to bring their vehicles in “voluntarily” for repair. It would have saved VW a bundle and been much less of a logistics headache, but the governing body was having none of that.

So, in addition to digging out of this and other subsequent messes, what is Mueller’s action plan going forward? Here’s what he said: “We will significantly streamline structures, processes, and (decision-making) bodies. We must become leaner and make decisions more rapidly. Our competitors are only waiting for us to fall behind on technology matters because we are so preoccupied with ourselves. But we won’t let that happen.”

While this may have been what his workers and leaders wanted to hear, it strikes a particularly tone-deaf chord where the consumer public is concerned. They are not interested in VW keeping up with the Joneses … particularly those customers who will be forced to turn their vehicles in for mandatory repairs and retrofitting. They are – justifiably – angry … and no amount of “technology” is going to salve that wound.

And, as already mentioned, the idea of streamlining infrastructures and making faster decisions does absolutely nothing to address the problem consumers face when considering whether or not to buy a VW. It’s almost as if the company knew what it was doing, got caught, and is now hoping to reframe the situation without actually addressing the problems they caused for their consumers. If Mueller doesn’t get on that “quickly” … he may be the next VW CEO going out Hindenburg style.

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The Facebook dislike button could spell doom?

FB Dislike

Communication on Facebook has always had its pitfalls. Do you “like” a post if you agree with the sentiment but hate the situation described? What about a tragedy if you want to offer support and the person posting asks for support? Should you take the time to write out a message in the hopes of avoiding an uncomfortable situation … but you don’t really know what to say … or you feel the original post said it best?

Ah, life in the mobile communication era. We talk as little as possible but try to say as much as we can with each keystroke. Now, Facebook revealed it is working on something people have been asking about for years … a DISLIKE button. Some reacted to the news with a shout: “FINALLY!” Others just sighed, and not a few people suggested this might be the end of any lingering civility online.

Then Mark Zuckerberg weighed in. According to Facebook’s CEO, the new tool will be a way to “express empathy” on status updates. Possibly a dislike button, but probably something a bit more complex. Zuckerberg admitted finding the right approach has been complicated. He said, surprisingly so. “We didn’t want to just build a ‘Dislike’ button because we don’t want to turn Facebook into a forum where people are voting up or down on people’s posts.”

So… what then?

Well, so far the CEO is not saying much, but it’s a cinch it’s probably a step in some direction. Though if it’s the right one only time will tell. Some social media users want no more “like” style buttons. They want people to be forced to communicate in something other than the digital equivalent of grunting or smiling. Others look forward to the opportunity to say even more while tapping even less.

There are those who believe additional “empathy” buttons simply gives trolls more ammunition. But when did a troll ever content themselves with clicking a button or an emoticon when a rambling, long-winded diatribe about ten unrelated topics would do?

From a public relations perspective, more opportunities should create more engagement, the key factor in the success of social media platforms. How that engagement evolves will, as always, be up to the users.

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