Essays

A collection writings and thoughts by artist Gary Llama.

A Tale Of Modern Business

Brands are seen as the most valuable asset a company has. The reason? The brand represents the vision of the company behind a brand. Accordingly, as a vision, the reality of experiences with a company may or may not match the vision, much like the believers of a religion may or may not meet the demands of their religioun. In business, the brand is the religion.

Happy Co.

Let’s say there is a company called Happy Co. The company was made up of some people, and like most people, they were some pretty decent folks. They were formed by two of these people. These two people had a vision a while back to try and make a new tool, one that they though would change, or atleast enhance, the world. And they had a way to make it a profitable product. And it was a very decent product. The market already had similar products, but not quite the way these folks products were. Happy Co. made a product that was different. Not starkly different. But a little different. What they needed was a way to convey, explicitly, that this was a different product; IE, product differentiation.

The way they used to do this, you made an Ad explaining the product. Thats the way we do it now as well, but we also make an Ad explaining the brand. Instead of arguing that this product is indeed better every single time, make the argument that Happy Co is better, and therefor every product of Happy Co is better.

Of course, we are all so different as people, maybe it’s a better product for you but not for me. This is market segmentation. So Happy Co has to sit down and figure out, who is our core customer? How can we make exactly what they need, or atleast more of what they need than anyone else.

They hire a firm to reasearch their core customer. Perhaps sales have been slipping, and they realize their core customer isn’t their ideal customer. Perhaps they’ve been running too many sales, and their core customer’s only allgiance to the brand is based on the low prices they offer. Happy Co wants to increase profit, and isn’t in a position to lower production costs just yet, so in order to grow to a point where they could build in mass at a rate sufficient to lower costs, they decide they need to raise their prices.

The research firm says that this will lose their current customer base, and that they will need to find a new one. The research firm shows Happy Co statistics they have gathered on new markets that seem to be on the rise, in particular, niche markets. The downside of a niche market is you have relegated yourself to one demographic of sales. The upside is that if you meet the needs of this niche market, you may have a core customer base of supreme dedication to your brand. Like a man who brings food to the starving, Happy Co would be the first group to take these customer’s needs seriously. They would respect Happy Co for that, and probably buy more of their products.

Happy Co takes a few days to think about this. While they do like turning a profit, and the sales they have run have had that effect, it seems that overtime, the sales have been being undercut by other business doing the same. And they were bigger businesses, business that could buy product in large enough quantities to influence supply costs, and actually lower those costs for the products they buy and sell. So $1 at their competitor might mean $0.58 profit, wheras at Happy Co, it meant $0.18 of profit.

And in talking to the research firm, the founders of Happy Co reminicesed of the reasons they went into business in the first place. To sell their product, sure, but also to do it in a way that benefitted other people’s lives. To make the world a better place. Even if just a little better, from the time saved using Happy Co’s product. The company thought about it, and then made a decision. They would take the leap.

Research firms for business gather lots of data. They do this by doing consumer tests. Through trial and error, test panels, and surveys, the research firms know a bit about how people buy the things they do, and why. Understanding the ‘why’ and the ‘how’ means that the firm can offer a business insight into how a type of customer shops, and why they shop, allowing the business to tailor their sales floor and product inventory to one that reflects what the customer wants.

Traditionally customer expectation has been handled the GM way. Make a bad-ass, top tier car, the cadillac, then incorporate bits of that cadillac into every lower model, down to the base model. This has worked for many companies, and is still in use today. And it works very well.

But the founders of Happy Co. always resented the upsell model. They were more utilitarian folks. They believed a tool should be a tool, and get out of the way and let you work. So, with the help of the research firm, Happy Co rebranded itself as a simple company.

They decided to limit their current product offering down to just a few items. For some products, there were specific features that some customers may want, but other customers might not need. So they made a ‘good’ and a ‘damn-good’ version. For other items that were more utilitarian, they just made one. Maybe you could pick a specific color, or maybe not. The research firm gave advice on colors.

The other area would be their stores. Happy Co stores looked like any other store of their industry, and suffered the same pitfalls. The research firm had tons of data on floor sales and customer psychology in retail settings. They urged Happy Co. to extend te new simplicity of it’s inventory to it’s retail stores. Happy Co had traditionally carried products by other companies alongside their own, especially accessories. But the research firm said that by doing that, Happy Co was admitting there are equal options to their own products, in their own store. That would seem to customers as though these other products offered something that Happy Co could not offer themselves. It would seem as a failure of Happy Co.

Happy Co. thought about it. For some items, accessories was the biggest sales item. They said they could not do away with the accessories. The research firm looked at their data and realized keeping accessories may actually bring some customers back to Happy Co after the intial purchase. So accessories stayed in. But for big items, like items that competed with Happy Co, they had to go. Happy Co. products alongside other brand name brands made Happy Co. appear to be a store-brand, usually the equated with discount merchandise in the eyes of shoppers. Happy Co decided to make it’s products a brand-name brand themselves, and use their stores to stand behind them as validation of this.

And so, armed with a new inventory and a new sales list, Happy Co and the research firm set about re-building Happy Co. The first order was to take what it had discovered from it’s products, and build a visual language around the company, one that said “Happy Co” when a customer saw it, though not literally. They decided on a vision: “to make great products that make people happy”. They hired a design firm to go through some of the color schemes that the research firm had determined capable of making folks happy, and a new color scheme was created. The crown jewel, a new logo, was also designed, tied into the color scheme. The research firm tested the new color scheme and logo on customer test groups. They asked people what the logo made them feel. The firm was shooting for two words, “safe” and “happy”. They made some changes to the logo until tests provided good results. They even built a test store, and brought customers in to observe how they responded to it. After a few weeks, the framework of the new Happy Co was in place.

(note: If this were a high quality production, or If I felt so inclined, you would see here two images. One would be of the Happy Co childrens area before branding, featuring a man displaying a pistol next to a child. The child is crying. The next image would be of a child holding a much nicer, funner, happier looing pistol. Smiling. Yes, Happy Co manufactures firearms.)

The research firm and the deisgners compiled a new manual for Happy Co operations, designed in the livery of the new Happy Co. The company managers were excited. After so many years of the old ‘brand’, they were ecstatic to have an environment around them that actually attested to the things they believed about Happy Co. They felt purpose on the sales floor. They felt part of a good organization. They believed in their company again.

Happy Co. set a transition date for it’s stores and brand, and set up the logisitics to make the transition occur gracefully. It would happen on sept 12 at 12:00 AM. Temporary trailers were given to drivers the days before so the company-owned trailors could be wrapped in the new graphics. Deliveries that day would be made in the newly wrapped trailors. The store managers spent the week having firesales of inventory clearing out everything for the new merchandise. A crane truck sat idly by the entrance to company headquarters, next to the cloth draped frame of the new signage. Employee clothing was shipped to the stockrooms insructing the employess to not open them until 12 AM.

When 11:45PM came, all the mangers appeared at the stores all across the country. Corporate had a man from the company come out to each store to assist. At midnight, every Happy Co store across the country was filled with the sound of moving display cases, electric drills, and the soft thump of rubber mallets knocking cabinets into place. Eventually they drowned in echo as the store floors became empty. And then the wheels of dolleys squeaked across the country; the new pallets being hauled in from the back. Soon it was a symphony of box cutters and the clack of metallic things being set down upon fresh melamine. At corporate; the crane balanced the sign, illuminated with floodlights, and the canvas cover was pulled off. Happy Co. had been reinvented.

Sales that week were peculiar. While the newspapers had run feture stories about the launch of the new happy co (at the advice of the research firm), the public wasn’t ‘fully engaged’ with new brand. But things like this take some time. Winning people’s trust, the utlimate goal of every brand, takes time. And convincing old customers that you are something different now, customers who may have been loyal more to price than to core vision, takes time. A drop in sales was seen. The research firm had warned Happy Co of all of this, as stepping foot in a specific direction means stepping away from another. But the company made the decision to stick to it, despite the fears of some internally. And then March happened.

Happy Co usually rolled out products when they were available, no hoopla, no big-time press releases, but on the heels of the newspaper stories about the businesses rebranding, and the public interest in the dramatic quickness it occured, many eyes were on Happy Co. So when it came time to release what would be one of their new, streamlined core-products, they played up the fanfare. They hit the press in cities they had stores, they went on television showing the cameras around the way the new stores worked, and they showcased their new product in magazines, as something important. Not just another tool. But THE tool. A specific tool. A tool for people who wanted to be both “safe” and “happy”.

Public Interest was piqued. The press set itself ablaze with speculation about whether the brand would actually meet the expectations being put on it by the media. Business critics lauded the company, some saying it should have even been shut down. But most media remained positive, almost disconnected in expectation, just enjoying the novelty of the spectacle that was occuring around such a particular product.

Release day was met with enthusiasm. Managment came to the stores to oversee the affair. Not only was the product part of the brand of Happy Co, but the way it was sold had to be as well. “We can’t make people Happy, if they are unhappy with the way they had to purchase it”, said Mike Kenner, VP of Retail Operations. In an unheard of move, cashiers took the purchase lines with handheld point-of-sale devices, ringing up customers while they stood in line. Staff then brought the product, already bagged, to the waiting customers. The lines dissapated quickly, and by the end of the day, the sales numbers were tallied. Management could not believe it. Not only had sales surpassed the numbers of any of the industry-specific competitors, but they had surpased those of all retail business in their respective shopping complexes. It was thought, that they might have even surpassed the numbers of every individual retailer in the entire country. Happy Co. brand transition, had been justified.

Over the next few years, Happy Co grew and grew. And as it did, it purchased from lower and lower levels in the supply chain, growing to the point where it had signifigant influence on the cost of the materials it was purchasing. Leveing this power, Happy Co could bring things to market cheaper than other companies could afford to do. So even when it priced itself a little above the competition, say 10%, the price the quality of it’s brand allowed them to do, they could make a 90% profit, wheras it’s competitor could only retain 30-50%. Some materials where purchased in such great supply that the cost to all buyers, and all competitors, actually decreased, due to the increased effort and infrastructure dedicated to producing them. In other cases, the exact oppostive effect happened; their quantity purchases left less of the resource available, driving costs up for everyone, including Happy, who only discounted by buying so many at one time.

They found themselves in a unique position, one where the conglomerated auto companies had found themselves years before. Because of their purchasing power, they could build a high quality product, relatively cheap. If they were willing to sacrifice a bit of their profit margin, they could extend the mission of Happy Co and the benefits of owning a Happy Co product, to those that had been deicidely left out of their market. The founders considered it. Perhaps the old upsell model, trickling down features to the most inexpensive model, wasn’t a bad idea. The research firm agreed this would give them the ability to ‘sell the middle’, a strategy of bringing rational folks in on discounts, then leading them to buy the more feature filled models. Or for the more monetarily challenged, to be able to own a piece of the high-end model, much like a smaller, high- quality home to the new urbanists, or conversely, a cake crumb to the communists.

Regardless of interpretation, it meant Happy Co had the power to really change the world. They set out to prepare some prototypes, and after revisions and a numbers session with their manufacturing and finance guys, decided to embark on making a product everyone could afford.

From here, Happy Co made history. A history that crowned it’s founders as genuises, it’s designers as sages, and the marketing firm with a higher per-hour billing rate. And it filled the homes of many folks with lots of Happy Co products. Almost anywhere you looked, from the street corner, to business world, Happy Co was in full view.

But as time moved on, it’s founders moved on. Spured by the access of money and opportunities, they ventured into different areas of life. Both still passionate about making folks feel both “happy” and “safe”, they found other industries prime for their talents. One in medicine, the other in automobiles. As they both waned their interests, talk of selling the company began to appear in their conversations.

On March 3, 2018, almost 9 years after releasing their first hit product, the product that defined the success and direction of the company, Happy Co was sold to Cegal Inc, a family-owned company that owned many succesful brands, including a few of Happy Co’s competitors. The founders, appearing at a last product launch, expressed their thanks to the millions of people that had made Happy Co a success, and wished the company well in it’s future. The company would never be the same again.

Sure, they’ve had good products since then. But the drive was gone. That once legendary attention to detail, the highly supportive customer support, the strategic innovation, knowing that whatever would come release day WOULD be amazing, was not so amazing now, but more Ho-hum. As the company suffered small losses in sales, the new owners moved people around a bit, and when things started heading down hill, brought in their best people from the other companies they owned. But nothing seemed to work.

The problem was, Happy Co was a zebra. And tt had to be sold to customers as a zebra. And in a market filled with horses and donkies, you cannot try to sell a zebra as a horse. Only a fool would try to sell a zebra as a horse. What the Happy Co founders discovered was, you have to sell the Zebra as the animal the horses where all trying to be, and in turn, failing to be. And so they succeeded. Cegal were horse men. They had owned horses of every size, and knew how to make horses perform. So they treated Happy Co as a horse. And it almost bucked like one. But then it died.

Ten years later, Happy Co was sold to Brands United, a company that buys brands that once had strong draw, and tries to reinvigorate them, atleast well enough to sell subpar merchandise under it’s logo. And thats where it sits today. It’s kind of sad, knowing where it came from.

About The Site

Llamatism is a collection of things, a cabinet of curiosities, and reports from explorations on things, by Gary Llama.

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