Under the Influence with Terry O'Reilly - S3E01 - Looking Out For Number One

Episode Date: January 5, 2014

In our first episode of Season 3, we explore #1 Brands. We'll look at popular categories and identify the runaway best-selling brands and analyze why they are #1. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. From the Under the Influence digital box set, this episode is from Season 3, 2014. You're so king in it. Scores of it in an instant. Your teeth look whiter than noon, noon, noon. You're not you when you're hungry. You're in good hands with us.

You're under the influence with Terry O'Reilly. He was born on March 30, 1970. Time magazine said he had a neck like a buffalo and a back as broad as a sofa. He generated a crackling tension and excitement wherever he went. ESPN ranked him the 35th best athlete of the 20th century. By two years of age, he was a legend. His name was Secretariat. By all accounts, there has never been a greater racehorse.

He was a specimen. Author Bill Knack, who wrote a book about Secretariat, said that, anatomically, he was almost without flaw. His glowing reddish coat looked like it was a half-size too small, as all his muscles protruded at every possible opportunity. Owner Penny Chenery said Secretariat knew when he was being admired. The first click of a camera and his ears would go up. Then he would swell up and literally pose, making the photographers chuckle. Secretariat had a habit of starting a race dead last behind the pack. His groomer

said he did that because he liked the feeling of passing all the other horses when he turned on his jets. His trainer was French-Canadian Lucienne Lauren, and the jockey that rode him to greatness was Canadian Ron Turcotte. Secretariat had many great wins in his career, but none grander than winning the Triple Crown in 1973. He had lost the race before the Kentucky Derby, and many journalists felt he had speed, but no endurance. He started the Derby dead last, of course, but then switched into ultra-glide, winning the race by two and a half lengths in record time that still stands today. At the Preakness, Secretariat broke last, but made a startling last-to-first move on the

very first turn and maintained that lead to break another track record. But those two feats would pale to what came next. The last race of the Triple Crown was the Belmont Stakes. No horse had won the Triple Crown in 25 years. And you will see Secretariat being led. His number is two, but he goes into the number one post. Secretariat's only rival was a horse called Sham. He, too, was a magnificent animal and had beat Secretariat in the past.

Yes, he's in him well. And Sham now going in. He's the outside horse, and we're ready to go for this tremendous Belmont 6. Everybody's in line, and they're off. Looks like the early lead goes to Mike Gallant. Yes, Mike Gallant going for the lead with Price and Prince on the outside. Secretariat away very well, the gate he almost never did. He broke fast.

And now it's Sham. Sham and Secretariat are right together into the first turn. It was becoming a two-horse race, just as everyone had suspected. Secretariat and sham neck and neck those two together sham on the outside sham getting ahead in front as they move around the turn with secretariat second then there's a large gap make it eight lengths back to my gallon and third and bicep turns fourth there was an eight length gap between the two horses and the rest of the pack and that would only open up further.

They're on the back stretch. It's almost a match race now. Secretariat's on the inside, by ahead. Sham is on the outside. They've opened ten lengths on Mike Gallant who is third by head. Then a fear swept through the crowd. Secretariat and Sham were going too fast for too long. They couldn't keep that pace up. Their hearts would give out. It was just too dangerous. Then Secretariat did the most extraordinary thing. They're moving on the turn now. For the turn it's Secretariat.

It looks like he's opening. The lead is increasing. Make it three, three and a half. He's moving into the turn. Secretariat holding on to a large lead. He accelerated. He opened a gap between him and Sham that was simply inconceivable. You couldn't keep your eyes off the gap. Then, Sham began to fall back.

His heart couldn't sustain that pace. That's when Secretariat kicked into another gear. It was remarkable. into another gear. The Secretariat is all alone. He's out there almost a sixteenth of a mile away from the rest of the horses. It was remarkable. Secretariat was a sixteenth of a mile ahead of the other horses coming down the stretch. There in the stretch, Secretariat has opened a 22-length lead. He is going to be the Triple Crown winner.

Here comes Secretariat to the wire. An unbelievable, an amazing performance. He hits the finish 25 lengths in front. Secretariat finished the Belmont Stakes not 25 lengths ahead as the race announcer guessed, but a mind-blowing 31 lengths ahead of the pack. Sham finished dead last, hollowed out by trying to keep up with Secretariat.

Secretariat has accomplished the unbelievable task of breaking the mile and a half record by two and three-fifths seconds. That is a record that may stand forever. Secretariat didn't just break the record at Belmont, he ran the fastest one and a half miles in history. Demolish that field and absolutely demolish it. No contest, listen to the crowd, listen. He had broken the record at all three Triple Crown races. He was a super horse. The world of marketing has an interesting parallel. Every advertising category is a horse race. Every brand has hungry competitors.

Every race is run flat out, a lot of money is wagered, and the winnings are big. Today, we look at the number one brands, the ones that out-distance the pack, the ones with the best bloodlines, the smartest strategies, and the best jockeys. There are even a few secretariats in our story today, and which brand is number one in its category may even surprise you. You're under the influence. There are many horse races in the world of marketing. Tough horse races fought day in and day out.

And what makes a product number one is not just smart marketing. It's often a reflection of our own desires. So, let's start when your day starts. Mornings consume a large percentage of household goods. Think coffee, soaps, shampoos, shaving creams, cosmetics, and cereals. The cereal category is a $10 billion industry in North America. 93% of North American families buy at least one ready-to-serve cereal a year. Cereals are the third most purchased item at grocery stores.

With that in mind, can you name the number one cereal in Canada? The answer is Special K. Created in 1956, the cereal is marketed as a low-fat option and is mostly aimed at women. Several years ago, Special K produced an award-winning TV commercial in Canada where men made resolutions usually reserved for women. This year I will not freak out if I gain two pounds. I will stop asking, do I look fat?

Do I look fat? I will learn to appreciate my body. I will not let my dress size determine my self-worth. I have my mother's thighs. I have to accept that. Do these make my butt look big? I hope not. The final frame of the commercial asked,

Men don't obsess about these things. Why do we? Then it asked women to, quote, reshape your attitude with Special K. In the U.S., the number one selling cereal is Honey Nut Cheerios. Created in 1979, it is a sweeter variation of the original Cheerios, and its marketing mascot is, of course, a talking honeybee. What's a morning without a cup of joe? Canada and the United States differ quite a bit on their coffee preferences. Eight out of ten cups of retail coffee sold in Canada are served

by Tim Hortons, which puts as much distance between it and the rest of the pack as Secretariat did at Belmont. In the States, Starbucks sells the most out-of-home coffee. Interesting to note that 64% of Canadians are daily coffee drinkers, higher than the 58% rate in the U.S. As for home-brewed coffee, the number one brand in Canada is Maxwell House. In the States, the number one brand, by far and away, is Folgers, with a 15.6% market share. It is the secretariat of coffees, with the nearest competitor clocking in far behind at 10%. Time for a beer. One of the biggest advertising categories is the beer business.

Having a beer on a client roster is every advertising agency's dream. Like having a big automotive brand or a piece of the fast food business. They are the flagship accounts. So, what do you think is the number one beer brand in Canada? The answer is a beer that was created in 1876. And here's another hint. The brewery was owned by a family. If you guessed Molson Canadian, you'd be wrong.

But if you guessed Labatt Blue, you'd also be wrong. The number one selling beer in Canada is Budweiser. Long gone are the days when American beer was thought to be inferior, and when Molson Canadian and Labatt Blue fought tooth and bottle cap for the number one spot. In 1995, Labatt sold to a Belgian brewery called Interbrew, which has since become part of Anheuser-Busch InBev. Ten years later, Molson of Canada merged with Coors of the United States

to form Molson Coors Brewing Company. Those mergers have completely changed the beer landscape in Canada. While taste is important to beer drinkers, most choose beer based on the brand image. You see this clearly in focus groups, where die-hard beer drinkers claim their beer is the best tasting beer in the world. Then, when you bring in a tray of beers with the labels removed, those same die-hard beer drinkers can't find their brand. That's because, in some categories, we smoke the label and drink the advertising. More often than not,

we choose a beer based on the image it projects and how that lines up with our self-image. And in the case of Budweiser, the great American lager has been working hard to link itself to hockey in this country and is winning the race with the

help of large media budgets. In the U.S., by the way, the number one selling beer is Bud Light. And we'll be right back. If you're enjoying this episode, why not dip into our archives, available wherever you download your pods. Go to terryoreilly.ca for a master episode list. You've got a headache.

I've got some strange disease. Don't worry about it. This pill will set your mind at ease. It's called progenitoria vox. It's made by Squab Merle Co. It's a life-enhancing miracle, but there are some things you should know. It may cause agitation, palpitations, excessive salivation, constipation, male lactation, rust-colored urination, hallucinations, bad vibrations Mild electric shock sensations

But it's worth it for the drugs I need Another big advertising category is pharmaceutical drugs. You see dozens of pharma ads on TV every night. So, what do you think is the number one selling prescribed medication in Canada? Viagra? Cialis? the answer is crestor it's a prescribed medication that lowers cholesterol helping prevent coronary artery diseases as well as heart attack stroke and angina this is another category where canada differs greatly from the united states the number one one prescribed medication in America is Ambilify.

It is an antipsychotic medication used to treat schizophrenia, depression, and bipolar disorder. Viagra and Cialis, by the way, don't make the top ten list in either country. Let's make a detour and take a look at pop culture for a moment. What do you think the number one best-selling vinyl record was last year? Answer? Jack White's Blunderbuss. Number two, by the way, was...

Abbey Road. Do you know who the number one best-selling novelist of all time is? She's sold over 2 billion books. According to the New York Times, the answer is Agatha Christie. The number one most retweeted tweet of all time? Four more years, from President Obama on November 6, 2012. And which company do you think has the most likes on Facebook? That would be Coca-Cola. As of this writing, it has 74 million likes,

dwarfing Walmart at 34 million and Pepsi at 28 million. Few purchases in life express your personality more than your car. Even when people who buy plain, nondescript cars because they reject the notion that a car is an extension of their personalities are, in the end, expressing

their personality. Therefore, it's interesting to see which model is the number one car in Canada if you're listening to this in your car right now look around and see if you can tell which is the most predominant model in the traffic around you Ford Focus perhaps Chevy Cruze Volkswagen Jetta nope The best-selling car in Canada is the Honda Civic. Not only is the Honda Civic the best-selling car in Canada, it has been the best-selling car in Canada for 15 years. It's the secretariat of automobiles. Surprising, isn't it? Especially since it's not the least expensive car

in its category and doesn't come with the most accessories. So, what is it that attracts the majority of car buyers? I asked the creative director on the Honda account, Dave Crichton. When his advertising agency, called Grip, was doing their research

to pitch the Canadian Honda account, they quickly realized there was an unbelievable affinity for Honda Civics among its owners. They were a unique group, a community, and incredibly vocal in their love for their cars. There are several reasons for this. It starts with the Goldilocks design of the car itself. Not overly fancy, not unattractive, just right for the masses.

Then, there's the quality. The Civic is often an entry-level car, bought by people with limited budgets. This demographic prizes reliability because repair bills can be more crippling than car payments. Honda's reliability was born of company founder Ichiro Honda's passion for racing. The interesting thing about racing is that if you really want to test an engine or an alloy or a manifold design, the best thing you can do is run it at 200 km an hour for six hours in the desert sun or at 3,000 feet above sea level. In 2006, Honda powered the entire 33-car starting field at the Indianapolis 500. And for six years in a row, the only six times in Indy 500 history not a single driver dropped out of the event

with an engine-related problem. As my friend Gary Lennox says, who wrote a lot of Honda ads in his time, if a car can handle that, you've got yourself an engine. And all that learning from the track went directly to the production line. Many people grow up with a Honda Civic in their families.

Then, many of those Civics are handed down to kids when they turn 16. That's why you see a lot of young males driving tuned-up Civics, giving it a youthful image. Another factor was that Honda was the first major Japanese carmaker to open a plant in Canada back in 1986. It's an import domestic. Civic owners have a lot of pride in their ride.

And that pride has kept the Honda Civic the number one selling car in Canada for the last 15 years. In the States, it's a different story. The number one selling car in America is the Toyota Camry.. The number one selling car in America is the Toyota Camry. But the number one selling vehicle in America,

above all, is the Ford F-Series pickup truck. Just as Secretariat won the Belmont Stakes by an astounding 31 lengths, the Ford F-Series has been number one for the past 31 years. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff season meditations, whatever your vibe,

Peloton has thousands of classes built to push you. We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. Cars, in a way, gave birth to the fast food category. The first ever McDonald's location was actually a drive-in restaurant. What would you guess is McDonald's number one selling menu item?

The Big Mac? The cheeseburger, perhaps? Nope. The best selling item at McDonald's is French fries. An original menu item, fries were served at the very first official McDonald's restaurant in 1948. One of the best marketing strategies in the history of fast food was when McDonald's started asking this simple question after customers had ordered. Would you like fries with that? That question was an upsell strategy that had a huge impact on McDonald's sales, and the company now serves over 9 million pounds of fries a day.

According to Time magazine, a recent survey found that consumers make no distinctions, none, between American bank brands. The study suggested that banks all offer the same services, making for almost zero differentiation. So, where should banks turn to learn a few tricks about successful marketing? The toilet paper category. According to studies, 80% of us differentiate between toilet paper brands, and we take that product very seriously.

As Time pointed out, we're very brand-sensitive about a product we flush away and not so discerning with institutions we're trusting with our nest eggs. Interesting. Needless to say, the toilet paper category in Canada has a very unusual story to tell. Follow my math on this. In 1995, Kimberly-Clark bought Scott Paper Canada.

When regulators looked at that deal, they insisted that Kimberly-Clark divest some of Scott Paper's brands in order to ensure fair competition in the marketplace. One of the brands Kimberly-Clark was forced to sell was the leading toilet paper brand in Canada called Cottonelle. So Kruger, a Kimberly-Clark competitor, stepped up and bought Cottonelle. But when Kimberly-Clark sold Cottonelle to archenemy Kruger, it put in a stipulation.

Kruger could only use the Cottonelle name for 10 years. Then it reverted back to Kimberly-Clark. So imagine what Kruger faced. They had the number one toilet paper brand in Canada called Cottonelle. But within 10 years, they would lose the rights to that brand name and Kimberly Clark would start using it again. Which meant Kruger would eventually have to change Cottonelle's name and suddenly have to compete against Cottonelle. That is the craziest horse race I've ever heard of in the marketing business.

So, Kruger enjoyed seven years of profits, then started the transition with three years left in the window. They chose the name Cashmere and started putting the new name and logo on the packages in a very small size. Over the next three years, the new name got bigger while the old name got smaller. While doing that, Kruger increased its advertising and promotional budgets and also improved the toilet paper by making it softer. The toilet tissue category was dominated by images of kittens, puppies, and animated bears. But Cashmere made the strategic decision to target women instead of families and focus on,

quote, a softness women notice. During the first two years, the advertising objective was simply to introduce the new name. In year three, the advertising changed to include how much softer Cashmere was than cotton, aka Cottonelle. Then it introduced the tagline Cashmere was than cotton, a.k.a. cottonel. Then it introduced the tagline, cashmere, now in a bathroom tissue. So, with a softer product, increased advertising presence, and alignment with the fashion industry,

and sponsorships of TV programs, cashmere became the number one selling bathroom tissue in Canada. Not only that, it increased its market share to an unprecedented 30.3% by 2008 and did it while competing against Cottonelle in the market, its prior brand name. So next time you're in the washroom and reach for some toilet tissue,

remember the race that was fought over your bottom. Oh, and by the way, guess what the number one selling item is at Costco? Correct. The story of Secretariat's race to become arguably the number one horse in racing history is a remarkable one. When he died at the age of horse in racing history, is a remarkable one. When he died at the age of 19, in 1989,

the autopsy showed that his healthy heart was more than twice the size of a normal horse. A fitting metaphor, because Secretariat had more heart on the racetrack than any other competitor. The big difference between Secretariat and the number one brands we spoke of today is that Secretariat retired after only 21 races

and was put out to stud. Brands have to just keep racing. It is a racetrack with no finish line in sight. The products that are number one are the muscular runners, and sometimes they are the surprising ones. Who would have thought the Honda Civic is the number one car in Canada? Or that French fries outsell the iconic Big Mac? Or that a toilet paper product would become number one by competing against itself?

We're attracted to those products for compelling reasons. Sometimes they solve our problems better than the competitors. Sometimes we are persuaded by sheer media weight. And sometimes we see ourselves reflected in them. Steadfast, reliable, and pragmatic.

Am I talking about Canadians or Honda Civics? It's all part of the mystery of marketing when you're under the influence. I'm Terry O'Reilly. Hey, Terry. Dave Crichton here, creative director on the Honda account. There's no doubt we've worked really hard to keep Honda Civic in the race

as the number one selling car in Canada for the past 15 years. But my question is, when do I get a retirement package like Secretariat? Under the Influence was produced at Pirate Toronto. Sound engineer, Keith Ullman. Theme music by Ari Posner and Ian Lefevre. Series coordinator, Debbie O'Reilly.

Research, Lama Balagi. By the way, I know you've been dreaming of wearing an Under the Influence t-shirt. Or maybe I was dreaming that. But anyway, we have them for sale on our shop page. And if you listen to the show while sipping a tea or a coffee, have we got the mug for you. Go to terryoreilly.ca slash shop. See you next week.