Kim Palmer

Friday, 28 June 2002 06:27

Computer cop

Sometimes good ideas come from strange places. In the case of Don Heestand, CEO and co-founder of e-Merging Technology Group (ETG), a good idea was inspired in part by a very horrible event.

"We were in Washington on 9-11," Heestand says.

He and his co-founders Ann Katigbak and Jeremy Samide could see smoke rising from the Pentagon. Witnessing the tragedy sparked a high-tech response.

"Sending reports out about staying off bridges is the government's way of dealing with it, but what we want to do is more specific," says Heestand. "We've spent a lot of time thinking about cyber security and the ability of people like Osama bin Laden to hide data.

ETG wants to lend its expertise to assist in securing our domestic cyber space.

"We've been feeling very red, white and blue lately," says Heestand.

The idea is to use students to monitor cyber space and warn companies when new computer viruses and other threats are developed and sent out. That would require getting a technical fingerprint or the "cyber DNA" of each company to create a database.

Heestand wants to use students from a local college and Cleveland as a test site.

"Wouldn't it be great to do something like this and be first in the country?" he says.

In a world in which the United States is relying more and more on foreign computer programming, hardware and telecommunications, Heestand wants to focus his staff on creating a domestic high-tech infrastructure and wants a good part of that happen in Cleveland.

Implementing the idea may take a huge amount of work, but Heestand says cyber security is as important as any other security.

"Getting hit by a (computer) worm is more likely than getting hit by a tornado," he says. How to reach: e-Merging Technologies, (216) 433-9668 or www.etg1.com

Wednesday, 02 January 2002 05:46

Bellwether

Jess Bell, the second president of Bonne Bell Inc. and son of founder Jesse G. Bell, recalls the time he was speaking before a group of senior citizens and posed the question: "Have any of you heard of Bonne Bell?"

Somewhat to Bell's surprise, a dozen hands went up. One member of the crowd actually pulled the company's most successful product, a Lip Smacker, from her pocket and held it aloft in the air.

If you're unfamiliar with Lip Smackers or Bonne Bell odds are that you never have been a teenage girl. For the uninitiated, Bonne Bell and the three generations of Bells that have run the company since 1927 are in the business of beauty.

A key component of the company's 75 years of success has been well-timed product launches – 10-0-6 in the late 1930s and Lip Smackers in the early '70s. Another is the family's ability to latch onto, and continue to appeal to, the teen and pre-teen market.

When it debuted in 1973, Lip Smackers was the first flavored lip gloss to hit the market. For those of us who grew up then, it was more than lipstick. It was a social necessity. But the appeal of the big fat tube of grape-flavored lip-stuff is just one part of Bonne Bell's story. That's because being first to market doesn't ensure success.

So how has this 75 year-old family-owned firm remained an industry leader in the company of the corporate powerhouses in the cosmetic world?

Innovative ideas? Yes. Quality products and good timing? Absolutely. But what has really kept Bonne Bell a leader is its ability to stay cool and understand its target market – teenage girls.

The simple fact is, teenage girls like make-up. That's one of the few constants there are with Bonne Bell's audience. Tween and teens have always influenced some of their parents' purchases, but now they have markets of their own and they know exactly what they want.

"Today, both parents work, so grandparents tend to indulge," explains Jess Bell, who also points out that many teens work or have sizable allowances to augment their purchasing power.

So not only has the size of Bonne Bell's market grown, but so has the spending volume of its customer base. Teens and tweens represent 40 million consumers that spend an aggregate $155 billion each year. And, according to the market research firm Teen Research Unlimited, girls and boys between the ages of 13 and 19 last year anted up more than $9 billion for cosmetics, fragrances and other beauty products.

A "tween," in marketing terms, is someone between the ages of 8 and 12, explains Jeff Stein, managing director of McDonald Investments. There are a few other things to know about this group.

They are growing. Census estimates predict the number of children in the U.S. between the ages five and 14 to reach 40.4 million by 2003.

They make money. About $12 billion a year by most estimates.

And, they spend money. Stein puts that number around $90 billion a year. They are, he says, "a very fickle group."

"It's a tough demographic to predict," says Stein. "They don't know that we are in a recession. They don't care when interest rates go up or down. It's all about what is the latest and greatest."

Teens respond to market influences in a very different way than adults.

With adult markets, a company's options are infinitely greater. A single brand can appeal differently to the family man, with promises of security and stability, or the working woman, with efficiency and quality. But the youth market doesn't look at things that way. With them, it's all about the latest trend. And trends are nearly impossible to anticipate.

In the traditional manufacturing town of Cleveland, Bonne Bell is one of the oldest and most successful family-run businesses. But instead of large steel beams and machine parts, the Bells deal with big vats of sweet smelling pink wax and glitter powder.

The company was founded in 1927, after the senior Jesse G. Bell moved his family across the country. Today, Bonne Bell is run by Jess "Buddy" Bell, grandson of Jesse G. Bell, and son of the charismatic Jess Bell. Two other Bells are key members of the senior management team – Hillary Bell, Buddy's wife and director of brand development, and James Bell, Buddy's brother and the company's senior vice president. And, as it is with many family businesses, every member of the Bell family can recite the story of Jesse G. Bell and his trek to Cleveland to start the cosmetics company.

"My grandfather started by producing products on a hotplate in the back of an apothecary," says James Bell, senior vice president of international business development. Back then, cosmetics were sold door-to-door out in the field. Bell saw an opportunity. "He realized that women's cosmetics was recession-proof. He could go to any community, no matter what the economic level, and sell."

Bell then sought out a central location from which to sell his product.

"Whenever he heard of a salesman wining an award, the guy was from Cleveland," James recalls.

The senior Bell tells the same story.

"He had never been to Cleveland before," says Jess, picking up the tale from where his son left off. "What he did know is that Cleveland is within 500 miles of half of the population of the U.S. and that it must be a salesman's paradise."

The company, named after Jess Bell's sister, Bonne, began by offering a limited line of women's face powder and cleansing or vanishing cream. With that as its core product, Bonne Bell survived the Great Depression. But it wasn't until 1936 when the company's first signature product left its mark on the cosmetics industry. Until then, Bonne Bell was just another in a growing line of adult cosmetics firms. Formula RX1006, which was later shortened to 10-0-6, marked a turning point for the company.

"From that day the company had direction," explains Jess Bell.

As an astringent face cleanser, 10-0-6 was initially marketed as a woman's product. But it was more than that. Ten-oh-six was, in fact, a harbinger for the direction the company would eventually move.

There's a distinct odor that hangs in the air at the Bonne Bell production facilities in Westlake. You can smell it the moment you reach the parking lot. That smell attaches itself to your clothes and leaves with you. It's the smell of childhood, of giggling girls, and roller skating parties.

The company's production facility is housed in what can best be described as a Kentucky farm house. It's large, meticulously clean and well lit. In the middle of the facility are huge 700-gallon vats of pink thick goo that fill a half-million bottles, sticks and pots every day.

James Bell says the proprietary blended base of Lip Smackers is not what makes it one of the leading products in the cosmetic markets. "It's the flavor and the fragrance that gives it the real pop," he says, adding that the basic ingredients of Lip Smackers are not very complex. "We have a blend of five waxes. With the truth-in-labeling laws, anyone with a basic knowledge of chemistry can reproduce (it)."

In fact, for the first time in its corporate history, Bonne Bell executives applied for a patent, for Lip Sours, a tangy, citrus flavored lip product.

"It's innovative," explains Bell.

When asked if Lip Sours is the first sour lip product in the market, Bell is quick to say, "It's not the first, but it's the best." And, while that doesn't mean the product will definitely be another Lip Smackers, it does indicate one thing – in this highly competitive marketplace, the Bells have learned to move fast.

"One of our strengths is that we can react quickly and have a good knowledge of the consumer," James says. As proof, he points to the moisturizing and protecting ingredient in Lip Smackers, the improvement in raw materials and the meticulous testing and quality assurance at the Westlake production facility.

The more you learn about the company, the more you realize that although it's all part of the finished package, a Bonne Bell product is more than a sum of its parts.

Ironically, it was during the make-up minimalist '70s when Jess Bell brought to market the company's most successful product line, Lip Smackers. In 1973, when the first iteration of Lip Smackers was rolled out, it was the first flavored lip gloss to hit what was a suddenly expanding teenage and youth market.

By then, the company had long abandoned the adult cosmetic market to focus on girls in their late teens. It was in response to a landscape that changed dramatically after World War II. The Bells recognized the emergence of a distinct teen market, and with it, vehicles like the new Seventeen Magazine, where Bonne Bell could properly target its products.

"Nineteen fifty-seven brought the beginning of the baby boomers," says Jess. "We saw that a market was developing in the teenagers. We realized we were up against too much competition with the 35-and-older market."

Businesses like Arden and Revco held a veritable lock on the mature audience. Bell and his father understood that the competition was simply too steep to continue in their current market space.

"At the time, no one was promoting or marketing to the teenager, so we moved totally in that direction," Bell says.

It was an easy decision to make because the company had been struggling. It paid off, injecting Bonne Bell with new life.

The junior Bell, like his father, found that it only took one product to suddenly change the company's fortunes. "It was a bit happen chance," says Jess. "There was not a great deal of studies done or market group research completed."

Nevertheless, Lip Smackers had an immediate impact. Says Bell, "It was our most successful product."

Bonne Bell plays in a market space in the midst of massive expansion.

Research shows this group is growing at an exceedingly quick pace. "We figured if we get them young enough, we would have a good share of the older market," Bell says.

The "older market," teenagers, is a prized consumer group. According to the market research firm Geppetto Group, teenagers shop as often as 54 times a year, much more than their adult counterparts. Today's teenagers also receive larger allowances than ever before, and a sizable portion of that money is spent on cosmetics. This year, sales of teenage beauty products are expected to reach $10 billion.

In 1998, the youth market accounted for nearly 20 percent of the $28.4 billion spent in U.S. cosmetic and toiletry sales. That has been growing at a rate of close to 8 percent a year.

It hasn't taken very long for Bonne Bell's competitors to understand the vast potential of the youth market and adapt. Old-line cosmetics firms have expanded their product lines to include lip gloss. A host of start-ups such as Too Faced and Jane's Cosmetics joined the race to introduce the next cool thing. And, retailers like Wal-Mart have opened their own in-store teen beauty centers to tap into the market. Bonne Bell may be a brand to be reckoned with, but in the fickle mind of the teenager brand loyalty is not enough to stay ahead of the pack. In 2000, new product launches in the cosmetic industry accounted for 6 percent of total sales with lip gloss remaining the fastest-growing segment.

Since 1999, sales have increased by more than 40 percent. All of this reveals that Bonne Bell's competition has not only grown quite a lot, but there seems to be no end in sight.

On the surface, it sounds like it should be a no-brainer to jump into this market space. The only problem is that teenagers tend to be stingier with their money than adults. That's because they don't always know when they can expect more cash in their pockets. Teen incomes also tend to be more sporadic, with fluctuating allowances accounting for a large portion of what they view as income.

So capturing and hanging onto this consumer group is a true challenge that few companies have been able to master.

Doing it consistently is what separates Bonne Bell from the pack.

It should come as no surprise that Jess Bell Sr. is passionate about the company's seniors program, which provides jobs for several dozen retirees over the age of 55.

Apparently, there must be something about working in a perpetually youthful industry that keeps people perpetually young.

At 76, Bell looks like a man at least a dozen years his junior and still runs marathons. He compliments his son – and successor – on the new glitter body powder using words like "neat" and "really cool." But the senior Bell is quick to direct all questions about new product development, marketing and international expansion to the two people who are responsible for that growth – his son, "Buddy" Bell, and Buddy's wife, Hillary.

"You reach a point where you can't contribute as much if you're not reading teen magazines and watching the news enough to keep abreast of the changes," says Jess Bell on his retirement a few years ago, when he passed the company reins on to his two sons, Buddy and James.

Officially, Jess is still chairman and acts as consultant, but his main responsibility is oversight of a rather successful senior's work program that operates out of the Lakewood headquarters. While Jess focuses there, Buddy and James, along with Hillary, have undertaken extensive market research initiatives and acted accordingly. They've engaged in trend analysis and product expansion. Since 1995, Bonne Bell expanded its product line to better encompass the cosmetic market instead of primarily focusing on lipgloss. They've also moved from department stores to big box retailers.

International expansion, says Jess, marks the next new era for the company.

But product expansion since the new management team took over has been the key driver to the company's recent surge.

"It is a whole different brand and line of cosmetics," says Hillary. "It's Lip Smackers, its gloss, lip lites, lip rush."

Buddy says everything about the expanding product is important – the flavors, colors, packaging style. "We try to create point of difference," he says.

Presentation, the Bells maintain, is everything. So it should come as no surprise that visitors to the Bonne Bell headquarters in Lakewood, or the production facility in Westlake, find themselves leaving with a purple box filled with goodies. For the most part, journalists shy away from accepting gifts from the subjects of their articles, but there is something about a tissue-lined purple box of fruit-smelling, glitter laden girly-stuff that no red-blooded American woman can resist.

"That's what's cool," says a co-worker about my Flip Gloss, a slim, trim lip gloss I received during my first interview with the Bell family. "Everyone in my daughter's high school has one of those," she adds with a nod. And it is cool. The actual lip gloss moves in a fluid motion as a small lever on the side is pushed up and the top flips up.

"Through the years we have developed a following," says Jess, who smiles when he thinks about his customer base. "The economy today favors our audience."

Each Bell used the same word separately when talking about their product – loyalty. That loyalty is evident in today's consumers, who live and die by the color of their Lip Smackers, and by the mothers and grandmothers who have grown up with Bonne Bell's products.

"Business continues to be steady for cosmetics," says Stein. However, steady doesn't mean consistent. "With teens, the market shifts radically and is a challenge to predict."

For any line to sustain longevity, it has to maintain a certain perception.

"Brands mean a lot," Stein says. "And brands that are positioned to appeal to a lifestyle rather than an age group will have a broader appeal."

This is another piece of the Bell legacy.

Although the Bells focuses mainly on the teen and tween market, lately the product line has been expanded to include an older consumer.

"We try to not to look at chronological age," explains Hillary. "It is a mind set – a young at heart spirit. We have 20- and 30-year-old women who use it. It has a universal appeal."

And, while Bonne Bell's target market may be relatively specific, what affects those trends is much more widespread.

"The hot thing in the last five years is glimmer and shimmer," says Hillary. "It's part because of technology and part because of societal trends."

Hillary and her staff look at everything from the metallic paint in cars to what Britney Spears wears to the MTV awards.

"The trick," she says, "is how to pull those trends down to our specific market."

Spears may be a woman now, but Hillary points out that it wasn't that long ago when the pop superstar was a somewhat innocent make-up wearing teenager.

"Britney Spears changed when girls wear cosmetics," says Hillary.

Not just when, but also how much. It may be tempting not to take Spears seriously, but it is important to understand the influence music plays in the tween and teen psyches. Music spending is on the rise and ranks higher even than popular video games.

When you consider that these age groups are more affluent than ever, with the average tween receiving $10 each week and teens as much as $32 per week in personal spending money, the buying power of this group quickly adds up.

By the beginning of the 1990s, it was apparent that Bonne Bell's products needed a shift from department store sales to the world of mass retail. Jess Bell says department stores simply weren't promoting youth cosmetics effectively, and the company's sales during the '80s reflected that erosion.

"Chains like Wal-Mart and Target are very interested in the teen and preteen audience," says Jess. "We had to go after (them), but first we had to prove ourselves to them."

Getting space on the shelves wasn't so much the issue as getting the fickle chains to place and promote Bonne Bell's products as cosmetics of choice for the teen crowd.

"These chains were not in the business of promoting product," Jess says, adding that now the big box retailers are one of the company's most powerful sales outlets. Once again, part of Bell's decision to change strategy arose from necessity.

Because they're a privately held company, the Bells don't disclose exact sales and earnings numbers. But they do say the company's sales were more than $100 million last year. And, with the continued growth of the youth market, Buddy and his team have cast their gaze overseas.

The universal appeal of Bonne Bell's products, and the similarity of marketing to a global audience, makes the move easier to undertake today than it would have been a decade ago.

"Culturally, kids and teens are not that different," Buddy says. "The U.S. is such a strong influence. And now, we are more focused on consumer trends tastes and preferences."

How to reach: Bonne Bell Inc., (216) 221-6256 or www.bonnebell.com

Monday, 03 December 2001 09:04

To whom much is given, much is required

Howard Lewis can recite the survival rates for childhood leukemia off the top of his head. More important, he can cite how St. Jude's hospital in Memphis, Tenn., has affected those rates over the last 30 years.

"Before St. Jude's, the survival rate was 4 percent," says Lewis, president of Family Heritage Life Insurance. "Today, those rates are up to 80 percent survival."

Lewis' passionate devotion to St. Jude's, as well as a number of other cancer and cancer-related causes, is contagious. To date, his company's cumulative giving to St. Jude's is more than $500,000. But he does more than give money to a cause; he also promotes awareness and will hold next year's company meeting at the hospital to underscore the importance of St. Jude's work.

Family Heritage's commitment to St. Jude's is just one of the reasons Lewis and his firm were honored with a 2001 Pillar Award for Community Service. Family Heritage is also actively involved with Daffodil Days, a program in which Family Heritage employees deliver flowers to cancer patients at the Cleveland Clinic. And throughout the year, sales agents are encouraged to wear caps and pins in the field to promote awareness of National Cancer Survivor Day.

Lewis and his employees have an intimate knowledge of the problems associated with prolonged and critical illnesses. The company sells supplemental insurance, including cancer, intensive care and accident insurance. This brings him and his staff face to face with the devastating effects of cancer and other diseases every day.

Not long ago, Lewis founded the Lou Massey Memorial Fund after Massey, one of Lewis' workers, lost his battle with brain cancer. Each year for one week, Family Heritage drives donations to the nonprofit fund that was specifically created to help affiliates and family members who suffer from cancer and cancer-related illnesses.

Lewis and his senior management are the driving force behind the company's giving culture. In fact, Lewis even ties company success to giving. The 200 sales agents that work mostly out of the main office aren't let off the hook. The better sales are each month for Family Heritage salespeople, the higher the amount of the donation the company makes in each salesperson's name.

For example, at the end of the year, donations to Toys for Tots are tied to sales numbers. It's a program that continues to expand.

"We had 10 major outreach programs this year and we have 12 for next year," says Lewis.

And, Lewis says, talk is cheap. That's why he and other senior managers are involved in outreach projects such as Harvest for Hunger's month-long campaign. He divides his company into teams and builds incentives to encourage giving.

"Outreach is part of the culture," he says. "They know that it is expected, but people have responded to what we have promoted."

Another program involves teams of employees and their families, who donate time and financial resources to health-related causes. Called the "For a Healthy Life" team, they solicit donations from sales incentive programs to support National Donor Day, Easter Seals, the National Day of Prayer, the American Red Cross and Breast Cancer Awareness Month.

There's one more motivating factor behind Family Heritage's culture of wanting to give back -- every year, Lewis puts on a black tie event, at which he gives a recognition award to the employee who best exemplifies outreach work and philanthropy. It has, he says, become very competitive.

"The award is all about what you have done in outreach," Lewis says, "regardless of sales or other work."

How to reach: Family Heritage Life Insurance Company, (216) 520-2800

Kim Palmer (kpalmer@sbnnet.com) is managing editor of SBN Magazine.

Monday, 03 December 2001 08:57

Did you wash your hands?

For better or worse, recent events have thrust infectious and contagious diseases into the public spotlight in a way they've never been before.

But even with all the attention on anthrax and small pox, the fact is the average American is more likely to be stricken with the common cold or seasonal flu than to even know someone who knows someone who may be affected by biological warfare.

Your chances of coming down with any of this season's garden variety illnesses are even greater if you work in an office with other employees, have children in day care or school or work with others who have children. In short, you're taking a risk just by leaving your house and going to the office.

For those determined to side-step our seasonal affliction, there are flu shots, homeopathic remedies, juice and vitamins. But, often the best prevention is a simple awareness of what causes and what prevents the common cold.

According to a study by Harvard researchers, 60 percent of parents erroneously believe some colds are caused by bacteria. Nearly half of those surveyed believe colds should be treated with antibiotics. But colds are viral, and antibiotics have no effect on them.

In addition, 90 percent of parents believe colds are more likely to be transmitted by sharing drinks or utensils, or even kissing. Only three-quarters of respondents correctly thought that shaking hands was a major factor. Most often, colds are transmitted through contact with the nose and eyes, making the hands the most likely vehicle for spreading illness.

No matter how simple basic illness-prevention measures like hand washing are, there seems to be an awareness gap. According to Stephen Musgrave of the Wellness Council of Northeast Ohio, a not-for-profit that promotes wellness at the workplace, even though a healthy lifestyle will protect the majority of office workers from the common cold, programs advocating weight loss, stress management and nutrition don't draw the crowds that other health programs do.

"If we have something about flu shots or water quality, we draw a huge crowd, but if we do something on lifestyle changes, we get seven to eight people," he says.

The domino effect that one co-worker's illness can have on an entire office is legendary. Some businesses devote a lot of resources to combat health-related losses in their offices.

According to Laura Adams, manager of wellness and fitness at Progressive Insurance, "People that are well perform better at work and at home."

One of the components of Progressive's health service program is wellness/fitness. Flu vaccinations are offered free to employees and their spouses and the company teaches a class on the proper way to wash your hands after dealing with children. In addition, quiet rooms are available for employees who are feeling ill.

With more than 55 percent of employees participating in the wellness programs, Adams and Progressive are tracking results in part by evaluating medical claims in correlation with the cost of the programs.

"People that take advantage of the program perform better, and that it is worth the money," Adams says.

In the end, the best method of prevention is simple -- wash your hands and eat your vegetables. However, those actions are just not seen the same way as antibiotics or fad cures.

"Everyone wants an easy solution," says Musgrave.

But easy is not always better. Musgrave warns against fly-by-night cures or preventions.

"If it sounds too good to be true, it probably is," he says.

As boring as it sounds, your mother was right. Eating right, getting a good night's sleep and exercising are your best weapons against illness. How to reach: Progressive Insurance (800) 776-4737; Wellness Council of Northeast Ohio, (440) 953-9292

Kim Palmer (kpalmer@sbnnet.com) is managing editor of SBN Magazine.

Wednesday, 30 May 2001 20:00

What's your identity?

If you've ever pondered the thought process behind some of the more memorable advertising campaigns, you must read ''Be the Brand: How to find powerful identity and use it to drive sales,'' by David N. Martin (New Marketplace Books, $19.95, 220 pages).

Martin, founder of The Martin Agency and a 35-year veteran of the advertising world, has authored the definitive guide to advertising and marketing. He has worked with and beside some of the most well-known creative minds, and made quite a mark himself with his previous book, ''Romancing the Brand.''

Martin founded the Martin Agency with partner George Woltz in the early 1980s ''in a sleek penthouse with one client, no furniture and a single dream.'' Over the next 10 years, the agency became one of the largest advertising firms in the Southeast and created the ''Virginia is for Lovers'' campaign.

He's worked with dozens of Fortune 500 companies and several nonprofits, including Keep America Beautiful. In ''Be the Brand,'' Martin employs an anecdotal approach to what could be a dry subject and, although he spends more than 200 pages mapping out brand building theories and strategies, he peppers the lessons with stories of some of the most famous advertising and marketing campaigns to date.

What makes his approach different is that he boils the art of advertising down to one question: ''What's the simplest way to express what your company stands for?''

Core values
As the book's name suggests, Martin stresses the importance of recognizing a business's core values and its competitive edge. That, he says, must then be translated into brand recognition.

Taking a cue from the simplistic yet effective approaches of Volvo, Volkswagen, Perdue, Nike, McDonald's and the like, Martin says business owners must discover the core competency of their company by asking both employees and customers.

''Walk down the hall asking employees to give one defining word that represents the company,'' he says. ''You will be fascinated about what you hear or don't hear.''

Martin reiterates that a company needs a single focal point to build a rock-solid brand.

''Every brand has a unique claim to fame,'' he says. ''The secret to a long, happy brand life is to find out what that one thing is and, having found it, never let it go.''

He stresses the role of leadership in creating and maintaining brand identity and says owners must focus internally as well as utilize an outside advertising campaign.

''In order to have a strong brand, the people in the organization have to feel a part of it,'' he says.

Brand as expectation
''What the brand is, is expectation,'' says Martin.

Even the most creative advertising campaign can't make up for a subquality product or service. Just because you say it doesn't make it true. Eventually, the consumer will realize that.

''If you are going to have expectation of performance, you need actual performance in order to have a brand that really works,'' he says.

Martin drives home the point that quality is one of the foremost issues on the minds of consumers, even above price.

''It always comes back to quality,'' he says. ''In one study, consumers rated what was important to them about a product on a scale from one to 10 ... And price was only about a six or seven.''

Brand as business plan
''Great companies have a particular value,'' Martin says.

That's why he stresses the brand and the business must go hand in hand. One strengthens the other and in the end, that drives the value of the company as a whole.

''Your quest for a robust brand starts with a hard look inside your company,'' he says.

Core values drive the brand, which in turn reminds the company of its core values.

''A clear sense of identity guides much more than marketing and advertising tactics,'' he says. ''It guides the way you do business holistically in a competitive world.''

Keep it simple
Martin says there is a trend to simplicity. He refers to it as the real age of time when people live complicated lives. The key is to find a brand hallmark, stick with it and make sure everyone else does, too.

''Information is plentiful,'' he says. ''Memories are short.''

Martin points to studies in which test markets regularly misidentify advertisers shortly after seeing costly prime time television spots. Going back to the ''one thing'' philosophy, he warns against being too esoteric. When pondering, use the KISS rule, Martin says --''KISS -- as in keep it simple stupid.''

Good product, bad marketing
''Most of the advertisers today have to be very selective and pick their target market. It would cost you $15 million to advertise to everyone in America once,'' Martin says.

He stresses the importance in print and media advertising of targeting your market, repeating your advertising and making it simple and creative.

Martin offers two examples: The market resurgence of Apple Computer and Volkswagen (VW).

It's no coincidence, he says, that sales rose after Steve Jobs returned to Apple. Jobs reignited the same core values that drove sales in the 1980s. Then, he combined that with a marketing strategy that spoke to a targeted audience.

VW had a similar problem. Even though the quality of the product stayed consistent, the message it put out to consumers didn't relate to the soul of the brand. It wasn't until VW found its target audience that sales began to rise.

Like any branding book worth its salt, Martin discusses the basics of marketing -- using emotion in advertising and how to speak to your audience.

''Through the years, many brands have become famous by tapping into true human emotion to show the end result of product use in human terms,'' he says.

He also says it's important to use color and emotion in sales techniques.

But what really makes this book stand out from others on the shelves are the real-life examples and stories that only someone with Martin's background can recount. He doesn't offer any quick solutions.

Instead, he lays the blueprints for integrating and fostering both a brand building strategy and the business as a whole. And that's something many consultants fail to provide.

How to reach: ''Be the Brand,'' (800) 295-4066

Oaklea Press website

Thursday, 28 June 2001 20:00

A mission to excel

"Be the best, learn the business and expand by applying what you already know."

It could be advice from any business leader at any conference or presentation, but this is the philosophy of Mark H. McCormack, founder, chairman and CEO of International Marketing Group (IMG), the largest sports representation, marketing and licensing company in the world and winner of Ernst & Young's Entrepreneur Of The Year Award as the 2001 Master Entrepreneur.

As the story goes, IMG had a simple yet poignant beginning. It consists of a young lawyer from Arter & Hadden, a handshake and a rookie golfer named Arnold Palmer. And it begins with McCormack's idea that golfers could earn extra money off the course to supplement what they earned on the course. The reasoning was that business owners would pay athletes to endorse their products.

From that beginning, and an early client list of Palmer, Rod Laver, Jean Claude Killy and Jackie Stewart, McCormack came to recognize and capitalize on what he saw as "the enormous potential of sports as a corporate communications medium."

As the father of sports marketing, McCormack devised innovative ways to package and market every aspect of the game. Thus, the sports marketing industry was born.

IMG represents some of the most famous and most highly paid athletes in the world, including Tiger Woods, Joe Montana, Monica Seles and Wayne Gretzky. But that's just the tip of the iceberg. Since the mid-'60s, McCormack has practically cornered the market on as many entertainment venues and performers as possible. Performing artists, writers, models, broadcasters, cultural institutions and corporations from all over the world look to IMG to negotiate deals, market events and manage licensing agreements. Clients include Wimbledon, the British Open, Itzhak Perlman, Rolex and the Nobel Foundation.

With 85 offices in 33 countries and 3,000 employees, IMG is involved in an average of nine major events around the world every single day. The size and scope of IMG has surprised even McCormack.

"If someone had told me 30 years ago, when I was traveling the golf circuit with Arnold Palmer, that my little management company would one day be booking violinists and singers in Malaysia, or, for that matter, that we would be involved in classical music at all, I would have shaken my head in disbelief," he says.

Despite IMG's size and perpetual expansion, McCormack has stayed the course when it comes to his core business.

"It all starts with the clients," he says. "They're the core of our business. Without this core, the fringe opportunities have a way of passing us by. It's no different in any other operation. If you don't know your core business, everything you do will inevitably become a fringe business."

For McCormack, it all goes back to learning the business and applying what you already know. Even as the company expands into new markets and business divisions, McCormack stresses the core value of the company is its relationships.

"IMG understands far better than anyone in the world the relationship between the athlete and their fans, between television and sponsorship and between events and marketing," he says.

McCormack's business ability has not gone unnoticed. In May 1999, ESPN's Sports Century listed him as one of the Top 10 "Most Influential People in the Business of Sports." Sports Illustrated called him "The Most Powerful Man in Sports." Golf Magazine and Tennis Magazine proclaimed him, respectively "the most powerful man in golf" and "the most powerful man in tennis."

Founding and running the largest and most innovative sports conglomerate in the world hasn't take up all of his time. McCormack has found some free time to write a number of books, including "What they don't teach you at Harvard Business School," which spent 21 weeks on the bestseller list.

But the best place to see McCormack's business knowledge in action is to simply look at what IMG does besides represent athletes. The company continues to bolster its core business by developing or representing every aspect of the entertainment industry.

For example, McCormack has successfully used licensing to add revenue streams, enhance consumer awareness and create stronger brand loyalty. Since 1962, licensing has been one of IMG's core business activities. Today, it is the world's largest independent licensing agency. In 1997, IMG Licensing was responsible for more than $5 billion in worldwide retail sales of licensed product.

IMG has also developed its own sports distribution channels. Through its broadcast division, Trans World International (TWI), IMG is the world's largest independent producer of television sports programming and the world's largest distributor of sports television rights. IMG's television production operation in India produced more than 70 percent of all sports programming shown on Indian television. IMG was also the first company to introduce virtual advertising (VA) technology during live televised matches.

McCormack isn't stopping there. How do you ensure that, as a company, you always have business? Why not create your own client base?

With a strategic merger in 1980, IMG began its comprehensive sports academies. Thousands of potential clients from more than 70 countries attend IMG academies on a multiple week basis throughout the year. The academies cover 190 acres and are used by 700 to 800 elite athletes per week. Nearly 400 students take part in the full-time academy semester programs each year.

It all comes back to McCormack's ability to innovate and grow with the changing sports business landscape, and is a testament to his ability to find and recognize good ideas and talent.

"To me, Arnold was a pioneer in the spirit of Thomas Edison or Benjamin Franklin," he says. "Tiger is a pioneer in the spirit of Bill Gates."

And for McCormack, the idea remains simple.

"The core foundation of IMG's success has always been and will always be the representation of individual athletes," he says. "Because it is they who have the power to advance sport to a new level."

How to reach: International Management Group, (216) 522-1200

IMG website

Thursday, 28 June 2001 20:00

The last mile

It's been five years since the historical Telecom Act of 1996, the first major overhaul of telecommunications law in more than 60 years.

As with all deregulation efforts, the idea was to open up the communications market to stimulate investment and market competition. Everyone saves or makes money, and all is right with the world, but as we know, that is not always the case.

"It (the Telecom Act) was to create a piece of legislation to stimulate the opening up of the local market by the ILEC -- Incumbent Local Exchange Carrier -- to competitors, and in return for opening that market to competition, Congress wrote in language that would let them have long distance entry," explains Doug Kinkoph vice president of regulatory and external affairs of XO Communications. "That is really the core gist of the Telecom Act."

As far as investment dollars are concerned, for the most part the act has been successful.

"We have seen about $29 billion dollars that has been spent to build up broadband communication infrastructure in the U.S.," says Kinkoph.

A great deal of those investment dollars has been spend on the increasing demand for new communications technology.

"They leapfrogged much more quickly than what it would have been if it had remained a monopoly," says Kinkoph

However, as we have seen, deregulation is not as easy it sounds. In the case of telecommunications, there are three aspects of service -- long distance, which has been deregulated since the '80s; local service and the infrastructure; and last "last mile," the physical lines that lead to a residence or commercial building.

The issue is that even in the atmosphere of deregulation, Ameritech not only competes in the long distance and local markets but also controls the infrastructure its competitors must use.

"They have the best of both worlds, still a monopoly," says Kinkoph. "The Bell companies have a 100-years head start and monopoly environment that guaranteed returns for them to build out that last mile of their infrastructure."

The other issue is in the ever-changing world of technology and telecommunications.

"When the Telecom Act was passed, this was a voice world for the most part," says Kinkoph. "Over the years, everything was viewed as voice -- that's what is regulated, and it is static."

The line between what is regulated and what isn't has been blurred.

"There are all these thin lines. It has rocketed past the existing regulations," says Kinkoph.

The problems of supply, confusing regulations that inhibit competition and companies scrambling for market share are familiar. Much as with other deregulation processes, there are many complicated issues. Even after five years, the telecommunications industry continues to grapple with the same problems recently seen with the newest round of utility deregulation.

It is a long and arduous process, and Kinkoph warns it should not necessarily be sped up.

"We are not at the point where we can open the local markets or where we can say. 'Let's deregulate' without considerable backsliding. We would have the virtual monopoly deregulated, which will crush the competition, and that's why it is a process of deregulation like it was with long distance."

Kinkoph explains that XO would like to see fewer regulations and more clarification of the existing laws in order to continue the deregulation process.

"Will regulations every catch technology? I hope it never does. That would mean that we have slowed in our technology development." How to reach: XO Communications, (614) 416-1148

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