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KOZMO CASE STUDY Azman Mohd Yusof Nor Malini A.

Hamid Mohd Elmi Izha Md Alwi Tg Aliff Faisal Tg. Ahmad Khairol Anuar Bin Ahmad

FAILURE TO DEVELOP BRAND Despite its best efforts, Kozmo was unable to create a brand image that was much different from that of a convenience store on wheels. Kozmo found it difficult to convince customers that having snack food items and videos delivered made those items significantly more valuable. Most of Kozmo's product line consisted of items for which most people were accustomed to paying low prices. Kozmo lacked the integration of customer needs, a brand that communicated an ability to satisfy those needs, and a set of operations that, in fact, fulfilled those customer needs. Kozmo's failure to integrate would prove to be fatal to the company. The company also doesnt has concept of the logistics of such an operation.

DEATHBED INTEGRATION ATTEMPT In March 2001, just one month before closing operations, Kozmo announced a marketing plan that included spending $2.5 million to print and circulate 400,000 catalogs The plan was a last desperate attempt to increase brand awareness, gain new customers, and convince people who did not have an Internet connection to use Kozmo's phone order service. Unlike RedEnvelope, however, the Kozmo catalog was not a part of an integrated business plan. Kozmo's tactic did not provide the same kind of added value that RedEnvelope's catalog provides. Unfortunately, a bag of potato chips does not gain much appeal by appearing in a full-color catalog photo.

CONCLUSION: LESSONS LEARNED Kozmo's experience illustrates that using one element from a branding strategy that has worked for another company is not a magic key to success. Branding techniques are effective only when implemented as part of an integrated strategy that fits the company's products and gives customers a compelling reason to buy. RedEnvelope found that a print catalog could be an integral part of branding and promoting its online sales. However, a print catalog is only a good idea if it provides customers with recognizable value and augments the rest of the company's branding strategy.

FUTURE RESEARCH The elements of offline branding strategies are well understood and have been used successfully by many companies for many years. The use of new online information delivery approaches has been the subject of some research, but not much has been done regarding the integration of the new and old approaches. Also, the use of older approaches to enhance the branding of new online businesses has not been studied carefully. These are two areas of research that could produce useful results that could be applied by practitioners as they move forward in the brave new world of integrated online branding. To succeed in delivery service, Kozmo needs to target a more affluent consumer, set a minimum order size for delivery, establish procedures that will allow the service to fill delivery routes and deliver other kinds of goods that require rapid delivery, such as items from medical labs or machine parts