“Monkey wants my burger!” So do I…

I think we are looking at a tasty opportunity here. A few months ago, I started to see on TV some clever –and quite appetizing!- commercials from what for me was a little known restaurant chain: Red Robin Gourmet Burgers (RRGB). These commercials caught my attention. I had seen Red Robin restaurants here and there when travelling around the country, but I had never had any interest in visiting one of them. I didn’t know what they were about, so I assumed they were just another one of those fast-food joints that dot our malls and commercial areas. Likely, nothing special. Suddenly, I see this fun and irreverent TV spot that describes a rather interesting gastronomic offer: the Banzai Burger. A burger with, among other things, teriyaki sauce and grilled pineapple. Well, there’s a thought! And this burger was offered by a restaurant that claimed to specialize in a concept that I found rather captivating: gourmet burgers. See, if you are like most Americans, it’s likely you’ve been embarked for a good part of your life in an inspiring and not quite yet fulfilled search: the quest for the perfect burger. I know I am! And what I know is that I usually go from disappointment to disappointment in that quest. Burgers are mainly the monopoly of the dull fast food chains, which seem to make a very deliberate and concerted effort to ensure that the burgers they serve you are as underwhelming as possible and as distant from the mouthwatering ones they show in their advertising as they can. Most casual restaurants also include burgers in their menus, but apparently consider them the undeserving underlings of their gastronomical line-ups: “Burgers? Please!! Just toss in a mundane beef patty with some lettuce and tomato in a bun, plenty of greasy fries and call it a day”. Have you noticed that, even though at some of restaurants they even ask you how you want your meat cooked, you invariably get it in just one way: burned, dry and tasteless. In this context, here it comes this restaurant chain, Red Robin, that seems to understand that there can be creativity behind the way to prepare a burger, and that also understands that there are people –lots of people- who are willing to pay a premium for a great burger experience. In my case, the advertising worked and, intrigued, I decided to pay them a visit. Now, as I have indicated before, good advertising is not the only condition to profile a potential great investment. The company has to deliver on its promise. And this is exactly the reason why I decided to write a posting about Red Robin. During my visit, they delivered in spades. The Red Robin restaurant created a great impression from the moment we stepped in: the place just emanated this fun, positive and optimistic energy. The decoration was quite lively, but not loud. The place was just fun, modern and clean. Even though the place was packed –good signal!-, we were promptly taken to our table. Our waitress, Samantha, was young, outgoing and very well trained. When she knew this was our first time at Red Robin, she took us through the menu with excitement and conviction, and offered to bring an order of their famous steak fries for us to try, which she later did along with a side of Ranch sauce that, according to her, most people enjoyed with the potatoes (they were great indeed!). The menu was a burger-lover’s dream: alluring burger creations that make taking a decision an unduly tough process. Even the drinks were intriguing and different. After we ordered, and during our meal, Samantha was always attentive, making sure that our experience was great. I can go on and on, but let me just summarize it this way: I was genuinely impressed with Red Robin. The whole experience was just great. But what I found more striking was not the quality of the food –which was superb-. It was the people. The Red Robin people were really charged up. Their service was caring and genuinely warm. And that is gold. For me, the attitude and disposition of the employees in a Company is one of the best indicators of its future and potential, for at the end it is people who can create and build success. It is the cook making sure that the burgers are well done and tasty; it is the server taking care of the customers so they feel comfortable and welcomed; it is the managers, keeping the environment fun and exciting. That is what I witnessed at Red Robin.
Red Robin has a lot of room to grow: currently they have around 380 restaurants in the US and Canada, far from saturation. This shrewd advertising campaign is going to dramatically raise the awareness and interest in Red Robin among the huge segment of casual diners in the US, and those who visit will not be disappointed by the great experience offered by the restaurants. This is, in my view, the start of a great investment story. Get in before the monkey takes your burger!

General Motors: Like nothing else...

To close this series of postings on General Motors (GM) and its potential as a long-term investment, I want to briefly cover the last great example of sharp marketing in GM’s portfolio: the Hummer.
When Hummer was finally made available to the mass consumer market with the introduction of the H2 model, GM was capitalizing on two key equities the brand had already developed. The first one was the mythical, larger-than-life personality the humvee had built through its successful performance in the armed forces. The second: the mystique created by its rare appearances in civil society as a coveted symbol of power and exclusivity for a handful of players able to foot the $100K+ tab for the privilege of flaunting an original Hummer (later dubbed the H1). Marketed as a luxurious, yet rugged and masculine vehicle, the success of the H2 was immediately obvious, and very quickly the Hummer made its presence being felt in the national highways. The H2 made many drool and a few others mad: the huge, powerful vehicle launch came to be at a very inconvenient time, exactly when the price of oil started to climb. Many would-be Hummer owners hesitated to commit to this gas-guzzler’s unquenchable thirst, and the fewer that embarked on it, were stung by guilt. It didn’t help that he Hummer became the preferred target of the green crowd, who heavily criticized the wasteful fuel consumption of the Hummer and the frivolity of those who would buy this all-terrain behemoth just to take it from their driveways to the office and back. GM’s reaction was quick and brilliant: the H3 was born. What made H3 such a masterful move was GM’s ability to position it as a smarter, more nimble Hummer, without undermining at all its powerful and virile image. The H3 preserved the rock-climbing, trail-blazing, river-crossing, neighbor-impressing capabilities of the Hummer proposition, at a far more acceptable price and fuel-consumption levels. GM’s message: indulge! GM got it right, and they’ve continued supporting the Hummer on an ongoing basis with enticing communications that pay off the emotional driver behind the desire for such an unstoppable all-terrain: facing a fairly routinary, structured and all-too-convenient life, sub-urban consumers dream with the freedom and the challenge of overcoming every obstacle in a boundless discovery of new, remote places… of course, in the comfort of leather seats and a top-notch audio system. It’s all about personal power. The amazing array of exciting TV commercials and print ads developed to support Hummer is mind-boggling. Every single one conveys exactly the same message: an extraordinary vehicle that will negotiate any obstacle to take you anywhere you want to go. But it is brilliantly done by molding the message to address –and feed from- vastly diverse lifestyle and value contexts, so as to be relevant to different consumer segments. From the promise of transferring your strong and daring video game self into the real world, to nurturing your subconscious desire to transcend through heroic deeds: it all is possible with a Hummer. The relevance and quality of Hummer’s positioning and support is evidence of GM’s ability of not only obtain in depth consumer insights, but most importantly, leverage them and translate them into relevant product propositions. And that exactly is the key to build long-term leadership and growth… like nothing else.

General Motors: An Innovations Revolution

In this third installment of my analysis of General Motors’ (GM) rise as a marketing powerhouse, I want to refer to yet another pillar of GM’s resurgence: its Chevrolet division. During the last couple of years, GM has been engaged in an exciting turnaround of its once flailing Chevrolet division. Chevrolet has always been GM’s workhorse. Considered its “popular” brand, that is, the brand targeted at the mass, mid-priced segment, Chevrolet cars had been, at best, uninspiring. There was not a clear position for Chevrolet. The brand churned a massive number of styles, very much unrelated except for one thing: their lack of character –and, some would add, quality. In a very typical mistake made by many corporations, GM at some point considered that the middle-class consumers need for an affordable, no frills car meant that its customers could forego style and the fundamental drive to fulfill significant emotional needs within a mainly rational choice. Toyota and Honda did not make the same mistake, and their respective Camry and Accord models thrived by offering consumers affordable style, durability and reliability. In my view, GM learned the lesson, and took the initiative of carefully re-evaluating Chevrolet’s personality. GM addressed two fundamental questions: what was the brand to stand for? and, consequentially, what kind of cars should be developed and marketed under the Chevrolet brand name? I think GM cracked the code: if I had to summarize the chosen positioning for Chevrolet, I would define it as “the smart choice”, underpinned not by low price, but as technology-driven efficiency. A mindful brand that pursues innovation as a way to provide the best overall value to today’s conscientious consumer. The first step was to resuscitate a model that was pretty much written off: the Malibu, and make it the unquestionable flagship for the brand. Malibu provides Chevrolet with a clear focus and a base personality the consumers could first identify, and second, relate to. The Malibu was completely re-engineered. A generous dose of stylish design and technical performance to match its adversaries made the Malibu a remarkable contender in the leading mid-price category. But the real breakthrough was in also positioning Chevrolet as the innovator in fuel-efficiency and alternative energy vehicles, spearheading and bringing to market GM’s innovations in that area. Once again, this move fully pays off the brand’s chosen positioning: technology-driven efficiency. Please notice that Chevrolet’s innovations are not about performance, comfort or luxury. No frivolous (although nice!) heated windshield cleaning fluid here: it’s all about efficiency, lower costs and lower consumption of limited resources. It's what Chevrolet refers to as Fuel Solutions. Eureka! In one swap, Chevrolet is covering two relevant, very real and closely linked concerns of today’s consumers: a) the personal, financial concern with the rising costs of energy, and with it, b) the awakening to the reality that natural resources are indeed finite and that it's everyone's responsbility to do their part to conserve them. This is the drive behind the surging interest for sustainable and ecologically sound products.
General Motors has vigorously driven this positioning for Chevrolet. It started with their FlexFuel vehicles, uniquely suited to consume E-85 ethanol fuel, and taken to new heights with the much touted and highly anticipated Chevy Volt, a long-range –and cool looking!- electric vehicle slotted for launch in 2010. I am particularly impressed by the iconic system developed to represent this approach, whereby a very clever representation of each of the alternative-fuel types Chevy is offering or working on are shown under the theme “Gas-friendly to gas-free”. The vitality, breadth of innovation and commitment this simple array projects give Chevrolet instant credibility and appeal.
Once again, Chevrolet represents yet another proof of General Motors marketing prowess. I can see no flaw in their approach, and compared to the endless shots of fast cars running on smooth roads that are the staple in car advertising, GM is developing brands with real souls and personality. Consumers are paying attention. Your investment portfolio should too.

GM: renewing heritage

In this series of postings, I am discussing the various signals I am seeing that, in my view, point to a rebirth of General Motors (GM) as a leader –beyond sales volume- in the automotive industry, and therefore, profile the Company as an attractive investment. In my previous posting "Full speed for General Motoros", I explained why I think the work behind Cadillac is just right. Now, I’d like to turn my attention to another treasure been dusted by GM off from the antiques coffer: Buick. Support behind Buick is not new. Since several years ago, GM has been trying to rejuvenate this brand, but its efforts had been, at best, tepid and somewhat erratic. What was Buick? A family car? The launch of the Rendezvous seemed to suggest that. A sports car? Tiger Woods took a few swings at it. It feels like GM knew there was valuable heritage in that brand, but was not finding the right way to unleash it in all its full potential. Then Lacrosse and Lucerne made their debut. Mmmh… I am sure Buick dealers started to see a slightly different type of crowd asking about these models. Sleek, with an abundance of features, nicely appointed, yet with the promise of a brisk, fulfilling driving experience. A true sub-premium offering was born. GM had found the sweetspot for Buick. An elegant, pleasant, smooth experience but with the impetus of a thoroughbred. Beatiful!! Actually, not a bad positioning, is it? And hence “Drive beautiful” was coined. A great product vision does not need much explanation. Once you hit the “big idea”, the way forward becomes clear. The right concepts and communications just flow out of this big idea. And “Drive beautiful” has engendered a series of great Buick models that completely belie the previous perceptions of Buick as a stodgy, old and declining brand. The latest addition to the family is the Enclave, a bold yet sophisticated SUV experience. Buicks are beautiful, paying off a concept that is absolutely in tune with today’s inward-looking consumer, who gives special value to aesthetics, harmony and a personal sense of pleasure. Buick is then yet another great proof of General Motors promising revival.