Lochhead on Marketing Christopher Lochhead

On this episode of Lochhead on Marketing, we are presenting some Pirates Perspective from our newsletter, Category Pirates about consumer spending trends.



Eddie Yoon, Christopher Lochhead and Katrina Kirsch of Category Pirates discuss the latest consumer spending reports and what they mean for the retail category and retail category queens. They also dive into a category opportunity for McDonalds and how it could impact the future of food delivery.



Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

The Changing Retail Landscape

Eddie Yoon examines the evolving economic landscape and its impact on U.S. consumers. Employing a Category Science lens, Eddie highlights significant disparities in economic indicators. Disposable personal income in July saw a mere 0.15% uptick, the year's lowest, while personal consumption expenditures (PCE) surged by 0.82%, marking a 2023 high. This income-spending disconnect raises concerns.



Eddie notes the imminent return of student loan payments, averaging $503 per month, which may strain disposable income. Loan delinquencies, nearing 2020 levels, signal financial challenges. Notably, a fourfold increase in young adults aged 25 to 34 living with parents since the 1960s reflects economic constraints driving lifestyle changes.



Prompted by Christopher, Eddie also identifies two contrasting trends: robust growth in experiences and personal transformations versus declining interest in traditional goods. While international travel and categories like medical aesthetics flourish, traditional retailers like Target, Kroger, and Home Depot report declining revenues. Eddie predicts a future marked by consolidation and M&A, with only a select few brands and private labels surviving.

Navigating the Shifting Consumer-Driven Economy

Christopher Lochhead and Eddie Yoon then tackle the intriguing dual signals in the economy, driven by increasing digital influence on consumer behavior. On one hand, positive indicators suggest the American consumer remains a key economic driver, with retail sales growing by 0.6% in August and a forecasted real GDP growth of 3.5% for the third quarter.



However, Eddie Yoon emphasizes the underlying shifts: Consumers are driving economic growth through increased credit spending, but it raises questions about sustainability. Many are making significant changes in their financial habits, including declining college enrollments, reduced home purchases, and a lower birth rate, all contributing to a redefined economic landscape.



The trend toward single-person households, now at 29%, signifies a fundamental shift in the traditional nuclear household model. While the macroeconomic picture may still appear positive, these changes point to a significant remaking of the American economy, shaped by evolving consumer preferences influenced by digital transformations.

McDonald's Dilemma

Christopher and Eddie then discuss McDonald's recent announcement to phase out fountain drinks inside their stores by 2032, which highlights a significant shift in consumer behavior. Currently, 40% of their revenue is generated through app purchases, delivery, and drive-thru, indicating a decline in physical store visits. This trend reflects the changing preferences of Native Digitals, who prefer digital-first experiences and the conveniences they bring.



As consumers become more discerning and value experiences over material possessions, businesses need to adapt to these mega trends. Eddie Yoon points out that while some trends are favorable, like digital and app-focused sales, the shift in product mix poses challenges. McDonald's heavily relies on the profitability of fountain drinks, which drive a substantial portion of their margins. However,

On this episode, we have a powerful dialogue with our guest, Josh Greene about what it really takes to build your reputation online and do legendary marketing in the digital world.



Josh Greene is the CEO of The Mather Group. In a world of digital marketing BS, sophomores hacks and self-congratulatory vanity metrics, Josh is the real deal.



Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

Josh Greene on Marketing and Reputation Management

The episode starts off with a discussion about marketing trends and reputation management with Josh Greene. They touch upon the impact of AI on marketing strategies and delve into reputation management techniques. Christopher highlights how individuals with negative reputations try to bury their past misdeeds in online search results. Josh explains that reputation management involves manipulating search engine rankings to push down negative content and make it less visible, while at the same time providing more positive information about you or your company.



They also touch on the evolving landscape of SEO (Search Engine Optimization), with Josh emphasizing that SEO is not dead but constantly changing. He notes that traditional SEO tactics, such as keyword optimization, have evolved due to changes in Google's algorithms and the increasing importance of AI-driven queries.

Josh Greene on what is the Internet thinking about you

They also discuss the topic of the evolving landscape of SEO and the impact of AI, particularly in large language models like ChatGPT and Bard. As mentioned earlier, Josh highlights how SEO has evolved beyond optimizing for Google to also include considerations for AI-driven queries. He then emphasizes the importance of managing one's online reputation in this context.



On the topic of AI, Christopher shares his experience with ChatGPT, mentioning how it produced relevant results related to category design, which led him to ponder the connection between AI training data, the internet's content, and these AI models' abilities to provide meaningful information. He also mentions that experts in various fields, including category design, are actively teaching AI models to enhance their understanding and capabilities.

Josh Green on how to stand out from the crowd

They then discuss how to stand out in the digital landscape, particularly in the context of AI and SEO. Josh explains that AI models like those used by Google rely on credible sources, with Wikipedia and Google's patent tool being primary sources. He emphasizes that credibility, links, and signals play a significant role in determining the relevance of content for AI models. Much like in SEO, authoritative content with strong signals will have a more substantial impact.



Christopher adds that AI is evolving similarly to SEO and mentions that some individuals are already trying to exploit AI for personal gain by selling courses on how to manipulate AI models. He highlights the importance of providing valuable content to help people rather than merely trying to stay ahead of trends or exploit emerging technologies.



They both agree that the key to success in the digital age, whether in AI or SEO, is delivering valuable content and expertise to genuinely assist others rather than chasing quick fixes or trends promoted by self-proclaimed gurus. They also note that having a real impact requires substance and credibility, not just buzzwords.



To hear more from Josh Greene and on how you can build your online reputation, download and listen to this episode.

Bio

Josh Greene

Links

Connect with Josh Greene!



a href="https://themathergroupllc.

On this episode of Lochhead on Marketing, let’s take a look on what the movie Barbie did to reach such an overwhelming success, and what Tech CEOs can learn about their approach to marketing.



Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

Barbie’s Approach to Marketing

Christopher Lochhead opens up the dialogue with pointing out the things that the Barbie producers did that made it a blockbuster win, particularly with what they did on the marketing side. According to Christopher, Barbie pulled off the greatest “lightning strike” framework of any brand in 2023.



One of the notable things that stood out was that Barbie spent $145M on producing the film, while spending almost $150M on marketing.



Let that sink in: $145M to make it, $150M to build it up.



Most companies would consider it outrageous to do such a thing, opting to focus their resources on building the product and spending what’s left on marketing, if any. And this is why most of those companies fail to make a mark and carve out a market early on in their product’s lifecycle.



How about Barbie? Well, it spent a combined $295M, but that marketing approach resulted in $1B in sales. $145M to make it, $150M to build. $1B in revenue.

Barbie’s Missed Opportunity

That said, Christopher did point out a few missed avenues that Barbie could’ve made to take advantage of their marketing strategy. For one thing, they left the digital space widely untapped, spawning newsletters and enticing new generations of girls to getting into collecting Barbies and other related merchandise.



Another thing they could’ve done is get older fans together and start building out a community in the digital sphere and talk all things Barbie. Not only does it heavily hit people in their nostalgia, but it can also help expose those older generation’s children into Barbie, and then you are back to point no. 1.

The Recession that Never Came

One of the things that Christopher also noticed with Barbie’s approach is that people are still bracing for a recession that seemingly never came, or at least was not as full-blown as we were expecting it to be. While everyone else was still timidly testing the waters, Barbie decided it would make a big splash instead.



So for Tech CEOs out there, it may not be the time to be holding down the fort. Rather, it should be a good time to try and hurl some lightning strikes in the market and see if you strike gold.



To hear more about Christopher Lochhead’s views on Barbie’s success and how it can teach tech CEOS about marketing, download and listen to this episode.

Bio

Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger.



He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur.



Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist.



In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion.



He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive.

Don’t forget to grab a copy (or gift!) of one of our best-selling books:



*  a href="https://www.amazon.com/Snow-Leopard-Legendary-Writers-Category-ebook/dp/B0B7Z7RT86/ref=sr_1_1?crid=1IMCZRW6O5SAN&keywords=snow+leopard+category+pirates&qid=1659956548&sprefix=snow+leopard+categor...

On this episode of Lochhead on Marketing, we are presenting some Pirates Perspective from our newsletter, Category Pirates.



Eddie Yoon, Christopher Lochhead and Katrina Kirsch of Category Pirates discuss Elon Musk’s recent move to rebrand Twitter to X. They also speculate why Elon made such a move, and what he could have done from a category design perspective.



Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

Twitter to X

Elon Musk's choice to rename Twitter as X has left people puzzled, questioning why he would give up a well-known brand and introduce a new one. Katrina follows up that the others think the move might be aimed at entering a different category, possibly related to financing. She wonders whether it would have been wiser to create a new company instead of rebranding Twitter.



Eddie Yoon discusses the debate surrounding the cost of rebranding and the value of legacy brand identity. He highlights that classic economic theory suggests ignoring sunk costs, which are expenses from the past, and instead focusing on future opportunities.



Eddie mentions that while some argue against rebranding due to the value of Twitter's legacy brand, most consumers prioritize what a brand can offer them in the future rather than its past reputation. He suggests that rebranding can make sense when a company wants to enter new categories and emphasizes the importance of looking towards future opportunities rather than dwelling on the past. In Musk’s case, he’s not banking on the legacy of the brand itself, but the established userbase that Twitter has, who have a high potential of also buying in to what new category Twitter, now X, might become.

Elon Musk’s Mistake with the rebrand

While Christopher Lochhead agrees with Eddie Yoon’s points, he also believes that Elon Musk made a mistake by rebranding Twitter without clearly unveiling his vision for the new category of service he wants to create. He argues that a rebrand should be part of a strategic launch of a new category and not just a standalone action. The value of a brand lies in its perceived leadership in a relevant category, and in this case, the microblogging category may not be as impactful as before.



Although Elon Musk's approach might not align with the ideal category design strategy, his reputation and influence will likely still garner attention when he eventually presents his big vision for the new category. But it definitely will lose some steam because the rebrand has become open to interpretation, rather than being focused on the intended category creation.

X as a financial category

The three further discuss the possibility of X creating a new currency or incorporating cryptocurrencies into its platform. Eddie mentions that X is already experiencing a shift in money flow, with revenue coming from both advertisers and users.



They also speculate that Elon Musk might have plans to introduce financial services or a new token (X token) on Twitter/X, incentivizing creators and potentially offering various payment options, including cryptocurrency. They compare this potential move to American Airlines' frequent flyer program, which essentially created a currency in the form of loyalty points.



While they acknowledge they don't have insider information, they highlight that Musk's background with PayPal and his desire to make X a vital part of everyone's life might lead to interesting developments.



To hear more about the discussion on what Elon plans to do with X, download and listen to this episode. If you want to join in the discussion, subscribe to Category Pirates and find more Pirates Perspective buried around the beach.

On this episode, we welcome Mike Bruno, Senior Category Designer at Play Bigger. Today, we dig into what it takes to make Category Design your career, and how incredible it is working with some of the most advanced technology companies in the world on category design.

Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

 

Mike Bruno and his first year as a Category Designer

Mike, who has been a category designer for about a year and a half, started his career working in agencies and social advertising. Transitioning into category design was a return to a beginner mindset for him, which he found interesting. In his previous role, he helped people solve problems and develop strategies based on business objectives and existing products. This experience translated well to category design, where the front door is identifying the problem that the category solves uniquely.

Mike also mentioned that category design involves many new concepts and a broader aperture, as it requires structuring not only the client's business but also influencing the entire market. While it was a humbling experience trying to figure it all out, he also had a sense of familiarity, knowing how to approach problems and strategize effectively.

Overall, his first year as a category designer was challenging and exciting, with a mix of the familiar and the new, which kept him engaged and interested in the field.

 

The way people think about Category Design

Christopher and Mike discuss the challenges of transitioning from traditional marketing to category design. They emphasize that category design involves creating new markets rather than catching existing demand. Mike points out that realizing someone invented categories was a facepalm moment for him, but it made him realize the importance of solving unsolved problems.

Christopher and Mike also talked about the power of not doing anything, meaning finding a category that has already been solved, and how this is often underestimated in the business world. They use Apple's example of launching a new category called "spatial computing" instead of just a new product like most marketers do. They compare it to Magic Leap, which failed to create a category despite having inspiring visions. Mike believes Apple succeeded because they could bridge the gap between their vision and the technology needed to achieve it.

 

Mike Bruno on the Difference between Category Design and Product Design

Christopher and Mike discuss the difference between launching a product and category designing a market category. They use the example of Magic Leap, which had a product but failed to category design the spatial computing market. Christopher explains that category design involves framing, naming, and claiming a new problem, creating an ecosystem of partners to solve that problem, and evangelizing the solution.

Mike shares his surprise about the comprehensive nature of category design, realizing that it's not just about coming up with a new term but involves a rigorous process to make the category successful. They also mention Apple's success in category designing the spatial computing market, positioning themselves for significant market cap growth while other players who only launched products may miss out on the opportunity.

To hear more from Mike Bruno and his experiences as a Category Designer, download and listen to this episode.

 

Bio

Mike Bruno

Mike is a Senior Category Designer with a background in psychology and communications strategy. He finds hidden problems and unspoken truths, and connects those with companies, brands and products to drive businesses and, importantly, the people they serve.

Mike’s style of Category Design is simple, straightforward and playful.

On this episode, we are presenting some Pirates Perspective from our newsletter, Category Pirates.



Eddie Yoon, Christopher Lochhead and Katrina Kirsch of Category Pirates discuss why it's crucial to frame, name, and claim a problem when designing a category and marketing it to customers. They also discuss why companies struggle to articulate their problems, and explain what happens if they fail to properly language it.



Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

The three most important things a company does at the highest levels

When asked about the problem that category design solves, Christopher emphasizes three key aspects. Firstly, it is important to believe that there are three crucial elements for a successful company: designing a legendary company/business model, offering legendary products/services, and creating a legendary category. These three aspects are considered the most important things a company does. If someone does not agree with this belief, he thinks that there is no basis for further discussion.



Secondly, it is necessary to acknowledge the significance of taking ownership and authorship of the category. If someone is willing to assume this responsibility, then assistance can be provided. However, if they are not interested in this aspect, there is no intention to convince or persuade them.



“That's the difference between you walking in the dojo and us standing outside the dojo and dragging you into it.”

– Christopher Lochhead



Would you rather capture the 76% or compete for the 24%?

Eddie Yoon emphasizes the importance of category design in capturing the market. He argues that if one does not recognize the significance of category design, then other considerations become irrelevant. If it is agreed that category design is important, it must be acknowledged that it should be pursued wholeheartedly.



Eddie suggests that the question of why naming, framing, and claiming are important is essentially a question about the importance of category design itself. He states that if one does not understand the essence of category design, they cannot effectively address the first question.



He presents a scenario where capturing 76% of the category economics is compared to competing for the remaining 24% with a better or faster, cheaper version. Eddie suggests that many people are actually comfortable with the smaller percentage because it is familiar and known. However, if someone is content with competing for the smaller share, Eddie acknowledges their choice and states that traditional business strategies and teachings will suffice for that situation.



Ultimately, Eddie highlights the importance of understanding one's preference for a larger or smaller market share and reframing the perspective accordingly.

Unlearning the 24% way

Eddie Yoon discusses the necessity of unlearning old and "comfortable" ways in order to capture the 76% of the market. He emphasizes that choosing to pursue the larger market share requires a significant amount of unlearning.



Part of this unlearning process involves freeing oneself to focus on understanding and articulating the problem at hand. Eddie compares it to Mark Twain's quote about not having time to write a short letter, which highlights the importance of concise and effective communication. Framing, naming, and claiming the problem are essential because without the ability to express it clearly, important details can be lost in subsequent conversations with coworkers, investors, or customers. This loss of clarity can lead to a diluted understanding of the value proposition.



Eddie explains that without a clear understanding of the problem and its articulation, customers may not perceive the worth or premium ...