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01/02/02 - The Blame Game

Staggering out of the painful odyssey of 2001, the collective year end yearning for renewal has never been greater.

In many corporate quarters, this is accompanied by a yearning for an explanation of economic woes that shifts blame to conditions beyond control.

While the September 11th terrorist attacks have certainly had a direct effect on the travel and tourism industries, they have, unfortunately, been used as a convenient excuse by others.

Truth be told, the economy was spiraling downward into a recession right from the start last year, with the sock puppet leading a pack of dotcom dogs into oblivion.

All that remains of their 15 minutes of venture capital funded fame are screen shots at Ghostsites, the "museum of e-failure." That's the final resting place of Webvan and etoys, too.

During 2001, at least 537 web companies folded or went bankrupt. That's over double the 225 dotcoms that died in 2000.

Ironically, Steve Baldwin, creator of Ghostsites, recently had to add his employer of three years to the collection as well.

This isn't to suggest the web is dead. The past year's dotcom deaths only represent 10% of an estimated 7,000 to 10,000 internet companies.

Most of the victims of this shake out existed solely because they'd found financing rather than a solid concept with paying customers.

The gruesome details about cuts in benefits and staff by both web and conventional companies is chronicled daily on the site

Peruse the memos and press releases posted on this site and you'll see plenty of excuses wrapped around the phrases "the tough economic climate" "failure to obtain additional funding" and "the terrorist attacks."

Traditionally, after the excuses and staff cuts, marketing budgets are slashed by companies in trouble. This knee jerk reaction helped the Industry Standard go from the the most annual ad pages in history (7,558) to out of business in less than a year.

Withholding ad dollars might go straight to the bottom line, but what does it say about a company's commitment to a consistent marketing program?

It says they think it's expendable. That they can "coast" in the public consciousness.

Hopefully, some of these marketing doubters will come across recent comments made by K-Mart's CEO, Charles C. Conaway. He admitted that his company's"drastic" cuts in sales circular newspaper inserts earlier this year resulted in lower sales.

Interestingly, these cuts were made to fund a broadcast branding campaign which did little to drive traffic into the stores.

The campaign promoted Bluelight Special everyday low pricing with spots derivative of Wal-Mart's computer animation smile face campaign. (Hope Wal-Mart's flattered by the imitation.)

And what's this about Bluelight Special everyday low pricing?!? As I recall, Bluelight Specials were just that--special. They were spontaneous, time sensitive in-store promotions that only lasted 15 minutes.

The branding campaign blanded the Bluelight concept out. At least a circular filled with limited time specials would shout "attention Kmart shoppers."

It seems Kmart got rid of the Bluelight specials in an effort to upgrade its image with the Jaclyn Smith line, and later Martha Stewart. Their inspiration here was probably the "Softer Side Of Sears" campaign.

Then, like so many troubled companies, they sought to get back to their roots and unearthed a dim bulb version of the Bluelight special.

Kmart might have realized the error of its ways when it comes to cutting back on sales circulars, but the damage has already been done. In fact, the damage has been compounded by its reactionary, mixed marketing messages.

So now Kmart enters the new year with cash flow problems and a good possibility of filing for Chapter 11 bankruptcy protection if business doesn't pick up in the next few months.

And like other confused marketers, it only has itself to blame.