When does Green shine as an investment opportunity?

In my previous post “Can we invest in Green?”, I discussed the drivers behind the acceleration of the Green movement, and its value as an investment opportunity. However, I warned that we have to be cautious, really understanding the underlying value of what any particular company is doing to leverage this trend. Paraphrasing the old adage, I indicated that not everything that is Green shines.

Everyone is jumping into the Green trend. Not everyone is doing it right though. Adopting ecologically friendly initiatives cannot be just a marketing plot. This is what is called “green-washing” and consumers see right through it. A company needs to be sincere in its approach. It is a fundamental component of the authenticity consumers are looking for in their dealings with a company (please see my article “Consumer values to look for” for a more detailed analysis on the topic of “authenticity”).

For a Green initiative to be successful -and therefore interesting as an investment opportunity-, we need to look for three key components: a) integrity; b) performance; and c) affordability. Let’s discuss these requirements:

Integrity: There are different levels of features a company can incorporate in a product in order to make it more eco-friendly. Some measures can be limited and represent just a small step in the right direction: for example, a change in packaging, using a little less plastic or incorporating recycled cardboard. Others can represent a radical and thorough re-design of a product or type of products, ensuring that everything in it significantly reduces its impact to the environment. All these steps are good: they all represent progress in the right direction. What is not right, though, is making just a small change and then try to hype it as major breakthrough in ecological responsibility. As indicated, consumers see right through these hypes and judge them as insincere attempts to prey on their genuine concerns. If as a company all you are doing is including 30% recycled post-consumer content in your cardboard boxes, just say it that way, and devote a little corner in you packaging to let consumers know; they will notice it and appreciate it. But don’t suddenly launch a full campaign touting that small change as the new “eco-friendly pack” for your product and thump your chest about how concerned you are about the environment and how seriously you are taking your ecological responsibility. Nah… that does not cut it. It's not authentic. On the other side of the spectrum, the more comprehensive is the change or the innovation, the more evidence consumers can see of a thought-through, purposefully designed product that comprehensively addresses their environmental concerns, then the stronger will be the manufacturer’s grounds to genuinely support the innovation in force and the higher the potential for consumers to pay attention and ultimately adopt the product. This thoroughness in the offer is what we need to look for in considering a potential investment opportunity.

Performance: There is one absolute truth with respect to Green. Consumers are willing to adopt products that are ecologically sound as long as those products perform as well or even better than conventional products. Period. As much as consumers want to do the right thing, they are not willing to wear soiled clothes, or eat tasteless food, or sacrifice aesthetics for the sake of the environment. The brands and products that promise to be environmentally friendly must also provide convincing arguments to make consumers believe they will perform well, and finally, they have to deliver on that promise.

Affordability: Consumers are willing to pay a little more for a more responsible product. But not a whole lot more. The closer the price of the eco-friendly product is to what the consumers are used to pay for that type of product, the higher it is the likelihood that consumers will switch to it. This is no surprise, though. Ultimately, we are playing with the good old value equation. Consumers are willing to pay more for products that have a greater value for them, that is, the ones that solve for a wider range of needs. What is the value of feeling good for fulfilling your responsibility with the planet? Hard to tell, but not that high in the big scheme of things. Yet, at a competitive price, it is a very relevant differentiator, and may tip the market share balance dramatically in favor of the eco-friendly contender. Therefore, look for competitive pricing when gauging a potential investment. The real volume and profit potential will be there.

Good! Now we know what to look for. I have some ideas of my own that I will be sharing in future posts. Do you have some ideas that can enrich this discussion? Your comments are always welcome. Invest well and prosper!

Can we invest in Green?

The Green movement is expanding like a wildfire across America and the world, and many companies are scrambling to jump into the bandwagon. I find it fascinating: the “greens”, (or “tree-huggers” or “environmentalists”) have been out there for decades, warning us about the catastrophic damage our way of life was causing to the planet. Most people would see them as a small group of naïve idealists (or radicals, in some cases) that made some good points, but that for the most part, grossly exaggerated the severity of the situation. As such, they were mocked and not taken very seriously. Now, they are not alone. Now, more and more people are becoming conscious about the environment and actively doing something about it. Green is quickly becoming mainstream.

What has changed? What made everyone suddenly pay attention? Most importantly perhaps, is this for real? Or is it just another fad like the carbs craze that will just fade away when consumers find another cause to embrace?

Believe it or not, the carbs craze and the green movement are related. They are expressions of the same set of values that are shaping society today. Paul Ray, in his book “The Cultural Creatives: How 50 Million People Are Changing the World”, coined the concept that has now been adopted to explain this set of values: LOHAS or Lifestyles of Health and Sustainability. LOHAS is described as “…a market segment focused on health and fitness, the environment, personal development, sustainable living, and social justice.” (http://www.lohas.com/). It sounds like a pretty hefty segment, doesn’t it? How is health and fitness related to social justice?? I addressed that in my post entitled “Consumer values to look for”: it all boils down to the pursuit of transcendental satisfaction. Inwardly driven consumers who look for holistic well-being: mind, body and soul. Consumers today demand more than the satisfaction of mere functional needs. A cup of coffee is not just a cup of coffee anymore: it must be an indulging, deeply satisfying sensorial experience that also makes them feel good because is healthy (cue in organic), allows them to help fellow human beings (enter Fair Trade) and fosters a pleasant, safe and clean environment they can enjoy (mix in sustainable and ecologically sound). Yeap, all that in a cup of coffee… or a shirt… or a car.

OK, but is this for real? There are a number of factors that tell me the underlying values behind this trend are not a short-term fad, but a new set of core principles and beliefs that are taking hold and truly dictating the way we run our lives. These principles are becoming the frame of reference in the decisions of what we buy. Some of the expressions may be temporary (like the carbs madness), but the values are here to stay. Some of those determining factors I referred to are:

Inward-driven mindset: As covered in depth in my post “Consumer values to look for”

Connected globalization: Globalization is not just an economic phenomenon, but a social and cultural one. We just can’t escape the world anymore. Technology and instant communications make us witnesses of the limitations and struggles of people around the world to survive and prosper. We can’t ignore it any more than we would ignore our next-door neighbor going through hard times. A good book on this topic is Tom Friedman's The World Is Flat 3.0: A Brief History of the Twenty-first Century

Scarcity: We are finally realizing that natural resources are truly limited, and that the competition for them is increasing. This is affecting us all through increased cost of living and eroded quality of life.

Global warming: “- So, you were not kidding! It is for real, then??!!” Thank you, Mr. Gore.

Accessibility: I would dare to bet this is perhaps the most important factor in the change of attitude. People are doing something because now they can. Information, availability and cost make taking the right decisions easier and affordable.

Now that we’ve discussed the Green trend with some detail, let’s try to answer the pivotal question of this post: can we invest in Green? The answer is a categorical yes… but we have to be cautious: not everything that is green shines. In future postings, I will be covering companies that I think are doing a great job in understanding and embracing this new set of core values in their product portfolio and communications, and because of that, will capitalize on this trend and generate significant value for their shareholders.

For authentic growth, turn to SAM

If I mentioned Boston Beer Company (SAM), most probably you wouldn’t recognize the name. But if I say Samuel Adams, chances are it ranks among your favorite beers. Founded in 1984 by Jim Koch, Boston Beer Company positioned its Sam Adams beer as a meticulously crafted brew for connoisseurs. The rest is history. Sam Adams has been gaining awareness and popularity throughout the years, by consistently staying true to its essence as a handcrafted beer, developed by beer-lovers for beer-lovers.

The key to Sam Adams success has been its allegiance to the fundamental consumer values discussed in my previous post "Consumer values to look for", which are masterfully integrated in both the way they develop their product mix and the way they talk to the consumers.

The current advertising campaign is a superb example of the insightful integration of these values. With Samuel Adams, it’s all about the beer. No flashy commercials, no fancy –and incredible- lifestyle cues, no talking animals. It’s all about real artisans describing with pride the fruits of their passion. It’s all about a detailed explanation of ingredients of the highest quality that are carefully blended to brew a superior beer. This is exactly what the consumers mean by authenticity.

The other important component in Sam Adams story is the promise of exciting experiential discovery. Forget about the regular and the light versions of the mainstream beers –with the occasional odd and short-lived spin-off-. What about trying a White Ale? Or a Cranberry Lambic? In total, 18 different styles that promise beer-lovers a rich, exciting and almost unlimited source of exotic and enjoyable new experiences.

With Sam Adams, is not about mindless beer drinking. It’s about personal, indulgent enjoyment. It’s about savoring the brew and discovering subtle undertones of earthy flavor or the burst of spice and hops. It’s about a higher pleasure.

Sam Adams is an extraordinary example of how a brand can live and represent what consumers value today. This understanding of their customers, and the Company’s determination to remain true to their demands, has turned into handsome returns for Boston Beer Co.’s investors. SAM stock has tripled its value in the last five years, achieving an all-time high above $55 in October 2007. The recent stock market malaise has knocked its price down to around $45. This might be a great entry point to start building a position in Boston Brewing Co. The company has a huge potential for growth, and I am convinced the current advertising campaign will surely generate a very high interest among beer drinkers to experiment with the brand; it is just the type of story they crave and love. A quality product and a company that knows what is doing will do the rest.

Consumer values to look for

In my last post "Cracking the consumer code", we discussed how crucial it was to look for companies that, through their products, are meeting the needs and values of today’s consumers. There are some key values that characterize this generation of consumers. These values are embraced with passion and drive people in their selection of the brands that they trust, buy and endorse. In continuing with the discussion on what to look for when evaluating investment opportunities, in this posting we will review some of the most relevant ones.

Inwardly Driven: Today’s world is exciting for the consumers. In a society of abundance, high living standards and instant connections, consumers can go beyond the satisfaction of immediate needs. The basic problems are taken care of, and consumers increasingly focus their attention and energy in satisfying what Maslow defined as higher-level needs, or, in their terms, higher pleasures. A high pleasure is one that transcends the mere functional and/or sensorial satisfaction, and involves emotional, intellectual or spiritual fulfillment. This pursuit of transcendental satisfaction means that the consumers nowadays are inwardly driven, that is, they are focused on fulfilling their inner motivations and aspirations, and are comfortable with putting their needs first rather than meeting others’ expectations. By contrast -and as a way to complete the illustration of the concept-, a consumer in a situation where the main focus is addressing primary needs –i.e. the post-war era mentioned in my previous posting- would be outwardly driven, because their satisfaction is heavily reliant on external factors –i.e. peers, economy and environment-.

Experiential Enablers: The world is full of possibilities –more than never before- and consumers want to experience them all. In a comfortable and predictable society, their quest is for new experiential opportunities that allow them to enrich their lives, make them fun, exciting and energizing. This is another critical value then: beyond products, consumers are looking for the new experiences they enable.

Authenticity: The third value to review is authenticity, also referred to as being real. Authenticity is a tricky value to grasp, and even trickier to activate. Many marketers hear “authenticity” from the mouths of their consumers, and immediately think of heritage, the original, the first. In reality, all what consumers are asking for is to just being told the truth. To just forget the hype, stop trying too hard, and tell them what a product is, what it stands for and what they can truly expect from consuming it. Consumers are just disappointed with products and companies that promise the stars, when in reality they can only deliver a flashlight. The glamour and glitz I mentioned in my previous posting do just not impress them anymore: they just do not need it. In principle, consumers are just sick and tired of being marketed to with hyped offers and false promises, as if they were fools that can’t see through the smoke and mirrors and make their own choice. It makes sense, doesn’t it?

In my next posting, I will be bringing to your attention a company that is very successfully leveraging these three values to define and support their flagship brand.

Cracking the consumer code

In "Investing by Advertising", it is my purpose to share with the reader my analysis on companies that, in my view, have been able to not only garner the right consumer insights, but have the skills and talent to translate them into great products with tremendous business potential; products that respond to the key fundamental values and needs defining the consumer today. I don’t pretend to be a financial analyst: there are plenty of sites and blogs that deal with balance sheets and revenue forecasts. I am a Marketing professional, and my evaluation is solely based on what I see companies doing in the marketplace and how those initiatives fit with the aspirations, lifestyles, emotions and trends that I know, through research and direct exposure, shape the behavior of this generation of consumers. That’s what I think makes this blog different. There are lots of great resources on Marketing. There are hundreds of sites and thousands of authors writing everyday about stocks and the financial markets. But so far, I have not been able to find a resource that links the two together. It is filling this gap what I intent this blog to be an initial stimulus for. To think of this blog as anything else but a starting point in merging these two fascinating fields would be very pretentious, and I certainly encourage the readers to participate in expanding this effort through comments and other contributions.

There are more brilliant examples of great companies and ingenious marketing initiatives than the time available to write about them. Nevertheless, I truly believe that anyone can spot a great investment opportunity by just keeping the eyes wide open and paying attention to his/her surroundings. We are all constantly exposed to extraordinary marketing initiatives with huge potential pay-off; most of us, though, are just too preoccupied with our own activities and everyday pressures to stop for a moment and just observe. However, even if we stopped for a minute to watch what’s around the corner, it would be good to count with some guidelines, some tools to help us better define what to look for, where to focus our attention. This blog could play a role in generating that guidance, so I thought it would be a good fit to also use it to share with the readers some of the criteria I use to identify products –in the most ample sense of the term- that show great potential.

To start this process, let’s talk a little bit about Marketing itself. Much is talked nowadays about how conventional marketing is not effective anymore. Consumers have changed, media is fragmented, and the promises of glitz and glamour that used to work so well in the old days fall in deaf ears with today’s consumers. All this is partially true: consumers have indeed changed, media is certainly very fragmented, and therefore, new approaches need to be devised in order to better serve your prospects and communicate with them. This, however, does not mean that marketing, in its essence, has changed. Whoever talks about conventional marketing, I would argue, never really understood what marketing is all about in the first place. Marketing has always been about satisfying consumers’ unmet needs. It starts with designing the right product, in both its functional and emotional dimensions, and ends with establishing a long-term relationship with your customers. Therefore, when someone talks about conventional marketing and its ineffectiveness, they are really talking about companies that took a formulaic approach to develop and market their products, and lost track of the needs that they were supposed to meet in the first place. As the consumer needs evolve, a company needs to evolve its products and the way they communicate them. If as a marketer you don’t do that, is not that you are applying conventional marketing: it’s that you are not applying marketing at all. Sure, you may be investing in R&D, advertising on TV and spending in promotions. But if you lost touch with your consumers, those efforts will be in vain.

Does it mean that advertising does not work anymore? Not at all! It works, and very well… if you have the right message for the right audience. TV still works; just not the same way it used to work in, let’s say, the 60’s. What about the glitz and glamour? Well, some consumers might still need it (emotional need), but is not a main trend anymore, as it might have been in, let’s say again, the 60’s, when the consumers were fundamentally outwardly motivated (more about this in a future posting). There is not such thing as conventional marketing: there are outdated values, formulaic messages and out of touch companies. No amount of money will solve for that.

This defines then one of the first criteria in evaluating a company by its marketing efforts: not everything that shines is gold. It is not the amount of advertising and promotion a company deploys what defines its potential. As indicated in the introductory statement to this blog, a company or product is not good just because it advertises. The product, and by definition the messaging supporting it, need to be uniquely relevant to the way consumers want to live their lives and represent the values they embrace as their own. Use your own experience to start separating the grain from the straw. Think of a recent TV commercial or promotion that really caught your attention. What did you think of it? What did they say in the commercial (or print ad or web banner) that you felt was speaking to you? How different did you feel the offer to be? Did you think something like “why didn’t someone think of it before”? You start getting the picture. Does this feel too simple or even mundane as a way to profile potential investments? That’s the beauty of it: it is simple! Beyond simple: it is intuitive. The point, though, is that, as mentioned before, most of the time we are not on the lookout for an investment opportunity. When we watch a TV commercial that speak to us, we think of the product that triggers our interest as exactly what we needed to wash the car, or to listen to music, or to feel cool and energetic; we might even act on it and go and buy it. But we rarely think of it as something other people might be interested in the same way we are, or even question (if not outright obvious) which company is launching it. That is the first shift in our mindset that is required to spot interesting investment opportunities: whenever you see a marketing activity that catches your attention, think of it as a potential opportunity first. Follow the thread from there to see where it can lead you.

I will continue discussing these criteria in other postings, interspersed with the specific product and company evaluations that are the main purpose of this blog. I hope you find these views useful; as indicated before, your contributions and comments can only increase their value.

For an interesting analysis on the topic, read Sergio Zyman's The End of Marketing as We Know It. Check the "Books to Invest By" section of this blog.

“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.

Full speed for General Motors

I am excited about the prospects for General Motors (GM) as a great stock for long-term investment. I see several of its divisions powering ahead with all cylinders running. And consumers are paying attention. I will be covering the different signs I am seeing about GM getting it right in a series of postings, just because there is much going on and much to discuss. I can’t avoid drawing a historical analogy to 1941: it seems that the relentless expansion from Japan’s Toyota may have finally awakened a sleeping giant.

To start this series of posting, let’s focus on GM’s efforts in the top end of the market, the luxury segment, where its lunch has been eaten for way too long by European, and moreover in recent years, by the Japanese offers represented by Infiniti, Acura and the indisputable leader, Lexus. A few years ago, Cadillac initiated an extremely well orchestrated effort to revive a brand that at that time, in the mind of the consumers, only stood for 30-mile-per-hour seasoned seniors indulging in their golden years. A complete re-design of Cadillac’s line and an energetic, cool campaign started changing those perceptions. The effort reached its pinnacle with the launch of the Cadillac Escalade, that immediately became the gold standard for SUV opulence and coolness among the young crowd -by the way, quickly displacing the then heavyweight champion, the Lincoln Navigator-. GM continues to support the brand, and the latest campaign around the Cadillac CTS is the best yet. It is great how, in its commercials, the perfectly targeted spokespersons, exuding a cool, unpretentious confidence, go in a rather matter-of-factly way over the features of the car. Yes, they are the features to be expected from a luxury car… but the difference in Cadillac, what is really important is that when you turn the car on… it will return the favor. This is a brilliant, insightful, and totally relevant way to speak to the affluent young professionals in their own language. What is most impressive is how compelling and personal the message is, and how precise it is at capturing the sensual nature of the pleasure associated with driving a powerful and luxurious car. GM dismisses the conventional and undifferentiating car talk, which everyone else claims time and time again –yeah, yeah, exciting, exhilarating… ho-hum-, and engages the luxury consumers in a peer-to-peer dialogue, reaching deep inside at their truest emotions and desires. The message is targeting the soul, not the brain. The campaign is superbly produced and the talent is spot on for the message. I can only see Cadillac comfortably expanding the space it occupies in the luxury segment. And that is high-octane fuel for GM’s growth.