MKTG 317 Textbooks

Textbook: MKTG 6 Lamb, Hair and McDaniel, South-Western Publishing Textbook: What Happens in Vegas stays on Youtube via Erik Qualman. #Socialnomics 2014 by Erik Qualman is the fifth version of the most watched video series on Social Media. Qualman is a #1 best selling author and keynote speaker on digital leadership. The video was produced by Equalman Studios. Source data for the statistics in the video is available in the book Socialnomics (sold on Amazon) socialnomics.com | @equalman

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Honey Maid and the Business of Love

APRIL 5, 2014

Honey Maid and the Business of Love

BY

For a long time, prejudice made a certain business sense. You could argue that it was immoral or wrong; others insisted that it was moral and godly. But there was little dispute about the business piece of it. Bill Clinton liked gay people, but he signed the Defense of Marriage Act nonetheless. Karl Rove knew it was smart to put all those anti-gay-marriage initiatives on the ballot. Coors beer could advertise in gay magazines while funding anti-gay interests and keeping any hint of the “non-traditional” out of the ads it ran for general audiences. The regressive side in the so-called culture wars was presumed to include a majority of American consumers; businesses, worried about their image, tended to defer to them.

Now, Honey Maid, that old-fashioned brand of graham crackers, has launched an ad that shows, in the most radical and moving way of any national campaign so far, how much that has changed. It shows a two-dad family, a rocker family, a single dad, an interracial family, a military family. The two-dad household is featured at some length; you cannot be distracted away from it. Most striking is the tagline of the ad: “No matter how things change, what makes us wholesome never will. Honey Maid. Everyday wholesome snacks for every wholesome family. This is wholesome.” The ad is deeply heartwarming—not simply because it shows diversity (which other companies have done) but because it labels these families with the word “wholesome,” which is exactly the kind of word that tends to get claimed by the evangelical right. People have long suggested that the new structures of the American family are “unwholesome” as a way of rationalizing intolerance. The idea of what is “against nature” has been central to messages of prejudice about both interracial relationships and homosexuality.

Honey Maid knew its ad would provoke controversy, and it did. So the company has made a follow-up spot that has been released on social media. “On March 10th, 2014, Honey Maid launched ‘This is wholesome,’ a commercial that celebrates all families,” the online short proclaims. “Some people didn’t agree with our message.” Viewers see close-ups of tweets and e-mails with remarks such as “Horrible, NOT ‘WHOLESOME,’” “DO NOT APPROVE!,” and “Disgusting!!” The title card says, “So we asked two artists to take the negative comments and turn them into something else.” We then see thirty-year-olds Linsey Burritt and Crystal Grover, who collaborate under the name INDO, taking a printout of each hateful comment and rolling it into a tube, then grouping the tubes at one end of a vast, industrial-looking space to create an assemblage that spells out “Love.” The artists appear to walk away, their work done. Then the online ad proclaims, “But the best part was all the positive messages we received. Over ten times as many.” Then we see e-mails with epithets such as “family is family” and “love the Honey Maid ad” and “this story of a beautiful family” and “most beautiful thing.” The entire room fills up with tubes made from these messages. Finally, we are told, “Proving that only one thing really matters when it comes to family … ,” and then we see the word “love” embraced by a roomful of paper tubes. The pacing of the spot is impeccable: the first half turns hatred into love, and the second half provides evidence of love itself. In its first day online, it garnered more than 1.5 million views.

To arrive at the “ten times” statistic, the team used industry-standard “linguistic resource classification,” which is to say that it scanned for the frequency of words such as “excessive,” “miss,” “wrong,” “ridiculous,” “wasted,” “degrading,” “evil,” “crap,” and “ugly” versus “yay,” “best,” “love,” “happy,” “great,” “amazing,” “beautiful,” “like,” “you rock!,” and “heartwarming.” For safety, the artists read every e-mail that they used in their installation to make sure, for example, that an e-mail that said “so not beautiful” didn’t make it into the positive group.

Burritt and Grover were chosen because, according to a spokesman for Droga 5, the ad agency that designed the campaign, “They could blend sustainable practice, innovative design and thoughtful collaboration to help bring the Love Sculpture to life with recycled paper.” Burritt and Grover have occupied an interesting space between advertising and art: Burritt studied graphic design and worked in package production, while Grover studied interior design and worked in store design. Their primary work has been window displays in Chicago. Their history is one of aesthetically striking visual stunts, yet the force of moral conviction radiates from their work for Honey Maid.

Advertising both follows and leads to change. Marketers’ objective is to sell things, and they will seldom be brave enough to jeopardize their own interests, but their own interests appear to be changing. At some quiet moment when “Modern Family” was reaping good ratings, the mentality of corporate America began to change. Cheerios ran an ad last summer that showed an interracial family and received an astonishing amount of vitriol—nearly fifty years after Loving v. Virginia. Some of the responses to its posting on General Mills”s YouTube channel were so odious that General Mills actually disabled the comments. When General Mills did a second ad in the series featuring the same family, it hired screeners to sort through the YouTube comments and remove the most bilious. It debuted during the Super Bowl, in February.

Coca-Cola mounted an ad, also shown during the Super Bowl, that featuredpeople singing “America the Beautiful” in seven languages. It showed many kinds of families—including a quick shot of two dads with their child. It was easy to miss that family if you weren’t looking for it, and the vitriol expressed against Coca-Cola focused on what people believed was the subliminal pro-immigration message, even more than on the gay piece of it. Fox News Radio host Todd Starnes tweeted, “Coca Cola is the official soft drink of illegals crossing the border.” Allen West, the former congressman, wrote that the ad indicated that “we are on the road to perdition.”

It’s striking, and perhaps not entirely coincidental, that the Coca-Cola and Honey Maid ads have appeared in the same season in which Jan Brewer, the governor of Arizona, vetoed S.B. 1062, anti-gay legislation that had passed her state’s legislature. Her veto came partly at the behest of senators who had belatedly understood the bill’s financial consequences. Regard for equal human rights did not drive Brewer; the threat of losing the Super Bowl did. (How did the Super Bowl become the nexus of gay rights?) It turns out that tolerating gay people is good for business, even in Arizona. I’d prefer that people such as I get our rights because we command respect and evince dignity, but if we get them because there’s money in it, that’s fine.

But how crushing that in the same week that Honey Maid has made history, we have the passage, in Mississippi, of S.B. 2681, signed into law Thursday, which takes the same tack as the vetoed Arizona bill but in very careful terms, allowing those with religious rationales to act out their bigotry, and enjoining government from interfering when they do so. I suppose that Mississippi, which doesn’t have an N.F.L. team, didn’t worry about not getting the Super Bowl. The anti-L.G.B.T. Family Research Council has taken credit for the passage of the bill, writing that its efforts

helped to bring along the business community—which, in Arizona, was so deceived by the media and outside leftist groups.… Mississippi companies didn’t have that problem, because the state tuned out the propaganda.

Where Mississippi has gone, other states will likely follow. With no federal jobs or housing protections, with no ENDA, gay people are vulnerable to such oppression. Being good for business gets us only so far. What, then, of Honey Maid? What, then, of making the word love out of all that hatred? It will take more than a pair of talented installation artists to bring about such a transformation on a national scale.

What Lululemon’s Yoga Pants Recall Reveals

Lululemon Athletica (LULU) has an image problem. On March 18 the Canadian athletic apparel company recalled 17 percent of its stretchy black yoga pants after store managers raised concerns that the material was too thin—so thin, the pants were inadvertently see-through.

It’s hard to tell anything’s wrong with the pants while you’re standing up, but striking a yoga pose or stretch-ing before a run, the issue—and your underwear, or lack thereof—reveals itself. In a press release, Lululemon says the problem is the nylon-and-lycra-blend fabric it calls Luon, which is in its Wunder Unders pants ($72-$98), Skinny Will leggings ($98), and Astro Pant ($98). “The only way to test for the problem is to put the pants on and bend over,” Chief Executive Officer Christine Day said in a conference call.

Lululemon is offering full refunds for the pants and has pulled the affected styles made after March 1 because that’s what’s available in stores, as the company notes. It blames the defective batch on a Taiwanese supplier, Eclat Textile, which denies it’s in the wrong. “All shipments to Lululemon went through a certification process, which Lululemon had approved,” Roger Lo, Eclat’s chief financial officer, told theWall Street Journal. So how long have the leggings been this risqué?

“My husband’s a personal trainer, and he first noticed it two years ago,” says Rachel Harper, executive director of a community fitness program in Montague, Prince Edward Island. At the time, Harper’s husband, Matt, worked at an elite fitness center in Winnipeg, Manitoba. “A lot of women weren’t wearing underwear under their Lulus, and it was really disturbing,” Harper says. She contacted Lululemon but says the company never responded. “I think of it now as my personal mission. I pull women aside at the gym and say, ‘Um, do you realize—?’ They’re always shocked.”

The gaffe could cost Lululemon an estimated $60 million and stunt its popularity. In the past five years, the company has tripled its annual revenue, expanding from 70 stores to more than 200 as women across North America scrambled to buy its colorful, form-fitting clothes. There are Lululemon review blogs, Lululemon fan sites—there’s even an invite-only Facebook (FB) group for women who want to resell their used clothes. “I know women who have $10,000 or $20,000 worth of Lulu in their closets,” says Carolyn Beauchesne, who runs the blog Lululemon Addict. Beauchesne says that about two years ago she noticed the company’s clothing felt thinner and pilled more quickly. “I do have one pair of pants that, if I bend over, you can see my underwear,” she says. “But I don’t do yoga, so I figure I’m safe.”

This isn’t Lululemon’s first product glitch. In 2007 a New York Times investigation revealed that the company’s Vitasea line of seaweed fabric—which it claimed released “marine amino acids, minerals, and vitamins into the skin”—contained no seaweed at all. (Lululemon took the health claims off its labels but still sells Vitasea clothes; shirts cost $68.) Reports of bleeding colors have also plagued the company, and in 2010 it pulled its reusable shopping bags after they were found to contain lead. Last year, Lululemon withdrew a line of swimwear that became see-through when wet.

If Lululemon’s lucky, this recall will put an end to its transparency headache. Either way, it’s a good reminder to always do a downward dog in the dressing room mirror. “I was driving down the street the other day, and I saw a woman wearing Lululemon pants on the sidewalk while pushing a baby stroller,” says Harper. “She bent over to do something to the baby, and she ended up showing everyone—well, let’s just say it was gross.”

Lululemon stock sheds 15% on bleak sales slump

Lululemon Athletica Inc. shares fell more than 15 per cent Monday after the yoga fashion retailer said its fourth-quarter results would be lower than expected — the latest bit of bad news for a company that could once do no wrong.

“We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully,” Lululemon’s chief financial officer, John Currie, said in a statement Monday.

The Vancouver-based company says it now expects its revenue and profit for the fourth quarter ending Feb. 2 will be significantly lower than its previous estimate before Christmas.

Lululemon’s new revenue range is between $513 million US and $518 million US, about $22 million lower than the previous guidance. The company’s new estimate for diluted earnings per share is between 71 and 73 cents per share, a reduction of seven cents.

“As we end 2013, we are starting to see the results of the significant investments we made throughout this past year to strengthen and enhance our back-of-house product operations structure,” Currie said.

“While we realize that it will require continued investment and time to get to best-in-class status, with our new leadership in place we are very focused on building on this stronger foundation to execute our long-term growth strategies.”

Lululemon shares were down $9.19 at $50.40 on the Nasdaq market at mid-day Monday, but the stock had been even lower earlier in the morning.

The stock also dropped dramatically on Dec. 12 after its previous guidance announcement was below expectations. Lululemon said at that time that it was expecting between $535 million and $540 million of revenue and earnings of between 78 and 80 cents US.

Prior to the December guidance for the fourth quarter, which spans the important Christmas and new year shopping period, Lululemon shares had been trading above $65 per share for most of 2013 and usually between $70 and $75 per share.

Retail problems

Lululemon isn’t the only retailer facing headwinds, however, as American shoppers deal with an uncertain economic recovery and more U.S. giants like Target move into what’s already a competitive space in Canada and put pressure on pricing.

But the company has also suffered some specific setbacks of late — including its handling of a problem with its black Luon pants, which were sometimes so thin they were see-through.

Lululemon said the problems were due to a style change and production issues and moved to fix them, but new complaints emerged later about the quality and durability of the pricey workout gear.

Chief executive Christine Day, who had been seen as a key part of Lululemon’s recent success, announced in the summer she would leave. On Dec. 10, the company hired Laurent Potdevin as Day’s successor and said Lululemon founder Chip Wilson would step aside as chairman of the board but remain a director of the company.

Wilson ignited a public relations crisis for the company in November by suggesting to Bloomberg TV that Lululemon’s yoga pants don’t work well for some women.

His comments about “the rubbing through the thighs” and “how much pressure is there” when some women wear Lululemon pants led critics to accuse Wilson of shaming women’s bodies. He later posted a video message online taking responsibility “for all that has occurred.”

In December, the retailer warned of a tough holiday season as it worked to win back customers after those missteps, and said same-store sales for the key holiday period would likely be nearly flat even as it reported improved third-quarter earnings.

“This was a company and a stock that could do no wrong for so long and it’s a good reminder for investors that even the most pristine of stories in the stock markets can lose a bit of lustre over time,” said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.

“When you’re in the consumer space, you not only have to fight the financial issues, you also have to fight the public persona, the PR issues,” he said.

“It’s a pretty big storm for them. Not to say they can’t weather it, but they are certainly up against a lot of scrutiny from the investment community.”

Despite Lululemon’s troubles, analysts had been expecting the company’s actual results to be slightly above the previous guidance on revenue and earnings, estimating 79 cents per share of adjusted earnings and $542.4 million of revenue, according to Thomson Reuters.

RBC Capital Markets analyst Howard Tubin noted that while the guidance would lead to the first negative same-store sales for the company since the second quarter of 2009 if it plays out, “management also noted they were on track to deliver on their initial guidance through December.”

“However, since the beginning of January, sales and traffic trends decelerated meaningfully,” he said in a note to clients Monday morning. “The updated guidance assumes these trends continue for the remainder of January.”

How not to apologize, with Chip Wilson of Lululemon

November 12, 2013

Ah, apologies.

The Lululemon founder came under some fire for saying that his pants were not for everyone because “some women’s bodies just actually don’t work.” Seriously? Their bodies don’t work? I thought the pants were designed to fit the person, not vice versa. What are these, Procrustean Pants? I thought the containers were supposed to take our shape. Are we liquids now? “It’s about the rubbing through the thighs,” he added. Pants don’t fit people. People fit pants. What?

Fortunately the pants are generally more forgiving than he is. The whole point of yoga pants is that, while some alarmingly fit people do wear them to do All Their Activities, which you discover when they bustle past you with large armfuls of kale, for the rest of us they are what you wear on your way to becoming Alarmingly Fit, or maybe just on your way to sit down with a good book, because they are quite comfortable and have spandex in all the critical areas.

Look, if the company’s founder is going to try to discourage people from wearing Lululemon pants, far be it from me to stop him. Maybe he’s trying to pull a Tony Stark and sabotage his own industry, just for kicks. My biggest objection to lululemon yoga pants is that some of them are less “yoga pants” than “yoga leggings-worn-as-pants.” But we don’t need to get into that.

Now, after noticing that everyone is upset, Mr. Wilson has emerged from his burrow with a classic Paula Deen-style apology, the kind where you stand in front of a white wall, tear up, and don’t actually apologize.

Pretty much everything about this apology is terrible. “I am sorry that you are not happy with the thing that I said. Please, stop being angry now.” You take responsibility for what you said? What does that mean? Of course you’re responsible for it. You said it. No one was standing in front of the classroom in an inverted posture gently urging you “Now say something about how it’s the people, not the pants, that are the problem.”

This isn’t a grown person’s apology! This is a child’s pose!* “I’m sorry you are so angry” is not apologizing. “I’m sorry. What I said was wrong” is. If you don’t feel comfortable saying that, then don’t call it an apology. It’s not. I could say that the thing I am doing in my yoga pants with one leg in the air where I teeter gently from side to side is a Warrior Pose, but that does not make it so. Apologies are about expressing regret that you said the thing that made people upset, not just regretting that they’re upset. If you can’t do that, I’m not sure why you’re bothering, except possibly so you can check off the “apology” box. But it seems pretty transparent. Speaking of lululemon pants.

*I have, at best, a dim understanding of yoga.

LULULEMON FOUNDER CHIP WILSON PLUNGES COMPANY INTO PR CRISIS

Lululemon has a big PR problem on its hands and it’s not just see-through yoga pants. Chip Wilson, founder of the Vancouver-based company, ignited a social media maelstrom last week after telling Bloomberg TV “some women’s bodies just actually don’t work” for Lululemon pants, which have been criticized for being too sheer and pilling easily. […]

Lululemon has a big PR problem on its hands and it’s not just see-through yoga pants.

Chip Wilson, founder of the Vancouver-based company, ignited a social media maelstrom last week after telling Bloomberg TV “some women’s bodies just actually don’t work” for Lululemon pants, which have been criticized for being too sheer and pilling easily. “It’s really about the rubbing through the thighs, how much pressure there is over a period of time, how much they use it,” he said.

Numerous media outlets picked up the story and Twitter erupted with responses to Wilson’s “fat-shaming” comments. Rebecca Hains, a media studies professor at Salem State University in Massachusetts, started a petition at Change.org urging Wilson to stop shaming women’s bodies and “desegregate” its stores, as the retailer has also been accused of relegating larger sizes to the back of the store.

“It’s a mess,” Deborah Weinstein, president at Toronto PR firm Strategic Objectives, told Marketing. “[Wilson suggested] it’s not an inferior product or inferior quality; it’s actually the fault of women with their fat thighs that the pants are pilling between the legs and are too sheer.”

That is “a weird and stupid argument,” added Weinstein, since Lululemon previously admitted to product inferiority. Back in March, the company pulled its black Luon yoga pants from store shelves because of complaints they were too sheer. The company said the sheerness fell short of its “very high” standards and that it was working with its supplier to replace the fabric.

“[Wilson] did two things at once: he disowned responsibility and he disparaged the wrong audience at the same time, which must have given heart palpitations to Lululemon’s PR people,” said Jeff Swystun, president and chief marketing officer atSwystun Communications.

Perhaps the whole fiasco would have blown over had Wilson apologized and said Lululemon embraces women of all shapes and sizes, a message even a PR intern could craft. But Wilson dug himself a deeper hole after an apology video was posted on Lululemon’s Facebook page with the headline “We hear you.” In the video, a teary-eyed Wilson talks about how sad he is for his employees and makes no mention of women, Lululemon customers or thighs.

“I’m sad for the repercussions of my actions,” he said. “I’m sad for the people of Lululemon who I care so much about, who have really had to face the brunt of my actions… I’m sorry to have put you all through this.”

The “apology” incited even more outraged and incredulous comments on social media channels, including Lululemon’s own Facebook page, where the video post now has more than 700 comments.

“An apology has to be sincere in every aspect. And a half-hearted apology is not necessarily better than no apology,” said Weinstein. “He’s being criticized for not dealing with the issue, which was about the women of the world he insulted, rather than just his employees. I think that’s a real problem.”

So, what can Lululemon do to get out of this mess? Swystun said the company needs to “re-instill the spirit of what made them a great company to begin with.” That starts with getting its leadership house in order: it’s been without a CEO since Christine Day left the company in June.

On the branding and communications front, Swystun said if he was in charge, “because they’ve gone from the youthful, energetic new company to something that is looking a little more stodgy and corporate, I would go through an exercise with them, which is: what new things do we need to instill in our brand, what is still good that we can leverage and what do we need to transform? And that’s a nice way of saying what the hell do we need to get rid of in our culture and our brand?”

Lulu Lemon Crisis Communication Questions

Crisis communication questions:

  1. Do you think Chip Wilson has made the situation better or worse by attempting to apologize on Facebook for comments he made on television?

 

 

 

 

 

 

 

 

  1. Do you think the situation is getting better or worse on the Facebook brand page as the company’s public relations and social media teams try to engage in a conversation with those who post comments?

 

 

 

 

 

 

 

  1. Here is something to consider: Each time the public relations and social media team replies to a comment on the Facebook post, it moves the discussion higher in the news feed of the page followers, increasing the odds that someone new will jump into the conversation.

This raises more questions:

 

 

  • Was it a big mistake to take this discussion to Facebook?

 

 

 

  • Could this apology have found a better home in the company’s employee newsroom?

 

 

 

 

 

  • Was the apology itself poorly worded, leading to additional negative comments?

 

 

 

 

 

 

  • Was the apology made only to employees and not to customers?

 

 

 

 

 

 

 

 

  • If the apology was to employees only, should it not have been posted where only employees would see it?

 

 

 

 

 

  • Could all of this crisis on the back end been eliminated by doing things differently on the front end?