mforstell

[mforstell]

$380 Billion Global Market

Its really hard to wrap your head around a $380B Global Cosmetics Market but when I think about how much of my budget goes to some sort of ‘self-improvement’, it makes sense. Wanting to look better is part of the human condition. I will never forget one of my grandma’s most insightful lesson she shared with me. Mind you, she grew up in the age of Mad Men, actually worked as a copywriter on Madison Ave. I was in middle school and would spend hours torching my hair with a straightener and she remarked “Women all want what we don’t have. I spend hours a week on a perm to make my hair curly and you flatiron your beautiful curly hair to become straight. What’s wrong with us?”

The business of cosmetics is quite thorny. Selling myths of anti-aging, lighter skin for darker people, or darker skin for lighter people, essentially the opposite of what is natural. While I think there is some new focus on a natural look, embracing who you are, Real is Beautiful, and Dark is Beautiful campaigns; there is also an equal but opposite reaction of hours of makeup tutorials on TikTok, a new craze of a threading facelift, and Botox parties the new Tuberware party.

I think there are some ethical concerns of advertising that people in these industries have to personally come to terms with but I don’t think there will ever be a world in which we live in that doesn’t have some aspect of people wanting to ‘self-improve’. This may be a harsh, pessimistic viewpoint, but the size of this market only supports it.

[mforstell]

Predicting the success of 4 Products

Sliced Peanut Butter

First, I should say that I am an AVID peanut butter eater. I have 3 kinds of peanut butter in my cupboard right now: Skippy’s Natural Chunky, Skippy’s Natural Smooth, and PB Fit Peanut Butter Powder. I decided which to eat depending on my mood. So while I may be an avid peanut butter eater, I can tell you right away that peanut butter slices are not targeted to me. I enjoy the taste, the process of spreading it on my fruit, and rarely eat it in a sandwich (I try to avoid bread). This product is marketed to families where you are looking for convenience for your child’s lunch. I would predict that this would not be a success for the following reason of relative advantage: while its slightly convenient, spreading peanut butter on bread takes about 30 seconds maximum and the consumer still had to slap on jelly for a complete PB&J. The value proposition of this product is simply not there and this I doubt it will be able to catch on, let alone quickly.

Collapsible Bike Wheel

I believe that this bike is creating real value for the end user (offers a relative advantage) but will be unlikely to diffuse quickly. It will be unlikely to diffuse quickly due to the fact of compatibility, there haven’t been many major innovations in bicycling design and this disrupts the space. People that buy bikes aren’t looking for a totally new design but rather an improvement in something in particular. I do think that the value proposition is clear: being able to easily fold up your bike to easily carry it or store it is quite helpful, especially for its target market of commuters or couriers.

Stave Jigsaw Puzzle

The Stave jigsaw puzzle has appeared to capture the minds and hearts of a famous and prestigious group of ‘innovators’ with the Bushes, Clintons, and the Queen of England herself. Yet, becoming mainstream is unlikely for this brand due to the level of complexity and that it requires much patience and determination to finish. Its also quite expensive, which limits its adoption from a majority. If its intention is to be a gift for a limit prestigious group or a one-time purchase with a rich group of early adopters, then it may be mildly successful.

Polytrack

Polytrack is the most interesting of all the products due to its relative advantage of decreasing horse injuries. Yet it suffered from a lack of quick adoption due to its limited amount of trialability and observability. It took race tracks in England as their early innovators to then prove enough value to the American race tracks. 

[mforstell]

Can you taste the difference of expensive wine from cheap wine?

As someone who likes to take pride in my increasingly refined wine pallet, I think I can. But I’m pretty sure if I was blindfolded- I couldn’t differentiate between a $20 and $60 bottle of wine. My approach to buying wine is as follows. I took a wine class 7 years ago with a friend's sister who was a Sommelier. We tasted the difference of old vs new world, Chardonnay vs Sauvignon blanc and Pinot vs Cabernet Sauvignon. I learned that I love a good Chablis, Sancerre, Australian/ NZ Sauv Blanc, Californian Cab and an Italian Sangiovese. For the last 7 years, I have ordered some variation of those 5 types of wine. It took a good amount of education to learn this, and know that I know, I rarely deviate. This is why I do think there is some brand or region loyalty for me at least. But this was due to good customer education from someone I deemed an expert.

To contrast, my fiancé’s wine purchasing process is very ad hoc. He likes red wine, Cab in particular. He goes to an overpriced wine store in New York’s FiDi and gets a wine in the $20-30 range. This kills me, because they markup $10 wine to $20-30. I try to buy in bulk, Costco has great wine selection for great prices, but since it’s really hard to go to a Costco in the city, we are relegated to this process. I think Mike is like the majority of wine consumers.

This research and case study made me realize that most wine (alcohol) in general is perception and branding. While I like to think of it as a new experience and educating myself, I do think most people chose their next bottle of wine based off of price ranges and perceived status of the region (France > Chile).

[mforstell]

Power of Nudging

'A Practitioners Guide to Nudging' is a great article about the different types of nudges and serves as a guide on how to create effective nudges. As I read this article, two clear but very opposite examples came to mind: P Diddy's 'Vote or Die' campaign to get people to vote and MIT's policy to fill out a FAFSA for private scholarships.

In 2004, Sean Combs (or P. Diddy at that point) created a non-partisan voting initiative targeted at young voters and minorities called 'Vote or Die'. As explained in a WWD article:

“The same way we make a Biggie album, a Sean John shirt or a ‘Spider-Man’ movie, or a ‘Matrix’ movie hot, we’re going to overwhelm you and excite you with the urgency of our message,” Combs said. “We have the power to make things cool, hot and sexy, from the clothes we wear to the cars we drive to the bling we buy.”

Combs wanted to make voting sexy, and channel his dominance in pop culture into a public good. Because of its mindful, encouraging nature of a nudge, it was effective from a marketing perspective and iconic in the early 2000s. The campaign showed Usher, Ellen Degeneres, Paris Hilton, Nelly, Pharrell, and Naomi Campbell. It appears from a data source that young people increased their voting by around 9% in 2004 from 2000.

To contrast from this mindful, encouraging nudge is MIT Sloan's policy on requiring a FAFSA application before accepting private student loans. After much careful deliberation and many steps to acquire a competitive private student loan (3+ month process), MIT required me to fill out a time-intensive FAFSA application, even though I had explained that I had no intention of taking this federal loan. While MIT's intention was to encourage students to take out a federal loan, it actually made me more annoyed and less likely to take a federal loan or advocate for a federal loan.

These two examples highlight the customer experience: from a successful branding campaign that gives me happy nostalgia to a frustrating, negative, time consuming process for student loans.

[mforstell]

Cerveza vs Bier: Who will be the next King of Imported Beer?

Heineken and Corona both want to be the #1 American Imported Beer, but their can only be one king.

Heineken has been the #1 American Importer of Beer in the mid-90’s but has faced increasing competition from Corona. Heineken’s vulnerabilities are serious – an arrogance that stems deep, from executives in the C-suite to out of reach advertising campaigns. This condescendence is seen in Heineken’s US distributor calling Corona a ‘quirky little alternative beer in Texas and California’ when in fact in 1986, Heineken’s sales were in a concerning decline. Another example of arrogance is seen in their ad campaign a few years later calling out other competing beers as part of a fad. I believe that this made Heineken appear out of touch and haughty, hindering their brand. Heineken needs to protect against this brand image but re-centering their brand to me more approachable. Their revived advertising campaign of Heineken nights where bar patrons are filmed drinking their beer can help repair some of that image.

To contrast, Corona has an approachable, relaxing brand. Connotations with vacation and the beach (reinforced with adding a lime to the beer) make it fun and not pompous. Its for Americans that want to get a little out of the comfort zone from Bud by crossing the border for a fun Mexican vacation. Having just come back from Mexico myself, I crave the comfort of the beer, just as must as I miss the amazing Mexican meals I ate. By drinking a Corona, in a way, I can transport back to my lovely vacation. Unfortunately for Heineken, there isn’t as much of a positive connotation. While there is a hint of their Dutch roots, Heineken doesn’t have as strong of an identity. In fact, right now I am struggling to distill what Heineken is in one word. I guess I would say ‘green’ comes to mind but a color doesn’t have much meaning compared to the beach, vacation, and Mexico- all words that come from Corona. To summarize this point with a concrete example, I posted this video below to my Instagram story yesterday. 5 people responded (which is a lot for me) and all had some reference to ‘finding your beach’. I would imagine if I posted a case titled Heineken, I would get no responses related to ��Cheers to all’ Heineken’s current ad campaign.

I think the key for Corona’s positive brand is the simplicity and cohesion. While Corona has two American distributors that have input pricing and promotion, Modelo has absolute control over all advertising content. This means that’s the image is not diluted and remains very strong. The Corona you order in a bar in Southie will look the same as on a beach in Tulum. Whereas Heineken allows for customization per region, which in turn dilutes the meaning and brand of Heineken. If I had to bet on one imported beer - my choice would be Corona.