Former Pepsi exec
retools market strategy
By: James Bourne
When Darien-based AEI Corp., a provider of global transport and distribution logistics, saw its 998 revenues bruised by economic crises abroad, it took a number of steps, including an acquisition, opening a new distribution center and committing funds for both external expansion and internal re-tooling.
The company also created a new position, vice president and cheif development officer, whose occupant would be charged with sharpening the marketing prowess of an organization that refers to itself as a "stealth company;" that is, one that has never gotten around to tooting its own horn.
It marked a shared beginning of sorts for both AEI (full name: Air Express International Corp.) and the man it tapped to heighten and define its profile.
As AEI embarks on the first concentrated branding effort in its history, Micheal K. Lorelli, a veteran of marketing and expansion campaigns with Pepsi-Cola, Pizza Hut, Playtex and others, joins a company with no history of organized self-promotion.
Can they make it work, starting from scratch?
Lorelli, 48, said the only pressurehe feels is self-imposed.
I wouldn't have come to AEI if I didn't feel that all the ingredients are in place." he said. "Failure is not an option. We are number one in this business and most people don't know that. This is a huge company."
Lorelli sad he is comfortable being a pupil in a new field, far from the familiar teritory of mass-marketed commodities such as pizza, cola and cosmetics.
AEI, which customers use for everything from moving frieght to managing inventory to negotiating customs, dosn't own a single plane, ship or truck, and few of its warehouses and distribution centers.
"Its fun to be in a learning situation," Lorelli said. "It's interesting to be at the very bottom of the learning curve - but nof ro long."
Winning track Record
Lorelli has ridden the learning curve before, usally to the top.
He joined Clairol fresh out of New York Univeristy's Graduate School of Businness and by the time he was 30, had directed the company's successful respose to overnment questions about some Clairol hair products.
At Playtex in the early 1980s, he managed an ambitious global marketing and expansion program.
From 1986 to 1994 Lorelli was with PepsiCo Inc., where he guided Pizza Hut's winning "Global or Bust" campaign to establish restaurants in more countries than Mcdonald's, the hamburger giant.
"This is a great company," he said of AEI, "and this is a great industry to be in. Nothing happens unless goods move. The company is doing well, and we feel it stil hasn't unleashed its full power. Effective branding is the way to do that."
Lorelli has already stepped into the branding breach at AEI. The company is in the final stages of selecting a name for a proprietary order management information system.
AEI's brass asked him to come up with alternatives to some of the choices that were under consideration when he arrived and he produced a logo concept and a few possible names and ruled out a few others that were already on the tape. It was his first command brandind decision.
Another potentially more lucrative opportunity looms with the impending development of FastShip, a revolutionary hull design that could halve the time it takes cargo vessels to cross the North Atlantic.
Lorelli said AEI has made a commitment of future cargo to the Philadelphia, Pa., company that is developing FastShip, and AEI's role might not stop there.
I'd like to get involved in branding that," Lorelli said. "This is like briinging a 707 to the land of DC-3s."
Aviation analogies crop up regularly in Lorelli's speech. A lifelong lover of airplanes, and a licensed pilot since he was 18, he owns a single-engine four-seater that he keeps at Westchester County Airport.
"When I was five I liked aviation, and I said I'd get my license," Lorelli recalled. "In college a lot of the engineers were pilots. They took me up one day and I didn't go to class for three weeks. My professors knew that if the weather was nice Lorelli wouldn't be in class."
"When I was president of Pepsi-Cola East I could hit three franchise bottlers in one day becuase I could get into those small (air) fields."
Although he has flown to the Bahamas and Hilton Head, S.C., he said his favorite flights are "anywhere," adding, "as long as you have equal number of landings and take-offs."
"I can leave my house at 8," he said," he said, "be on the Vineyard having clam chowder at 9:30, and be back by 11."
Lorelli tried skydiving when he was in his early 20s, but gave it up in favor of being a down-to-earth family man.
"I did about 40 jumps - probably 39 jumps to many," he said. "I think you don't do that and be a parent at the same time."
"In the late 1980s, he joined Business Executives for National Security (BENS), which sometimes counsels the military about the business end of issues such as base closings and personnel matters.
One of the perks of BENS membership is the chance to ride in military aircraft, which even for passengers requires hours of training in flight simulators and ejection seats.
Lorelli has flown in an Air Force F-15, and has fond memories of swooping over the New Mexican desert at daybreak in a B-1B bomber, it's CB radio tuned to the chatter of truckers on the roads below.
"I like the military," he said. "And I like anything to do with flying."
Work and play hard
Lorelli grew up in Queens, where he said his father, and insurance broker, instilled in his four children an ethic of working hard and not forgetting to enjoy life.
"Life is too short - you've got to play hard, too," Lorelli said. "I've got my hobbies and I still manage to get a fair amount done in 24 hours."
A self-described "electronic tinkerer," he had a ham radio license at the age of 9, and an early ambition to be an electronic engineer. He switched to industrial engineering after entering New York University, when his interest in business took over.
He has lived in Darien for most of the last 20 years, minus short stints in Wichita, Kan., and nothern California. He is married and has two daughters.
He runs four of five times a week and watches what he eats, which means no red meat and a carefully calibrated minimum of 26 grams of fiber a day. (Hint: A bowl of fiber One ceral is 12 grams all by itself.)
Lorelli is one the board of the American Health Foundation, which preaches preventative measures against heart disease and cancer.
In 1996, inspired by his frequent business trips, he published a children's book called "Traveling Again, Dad?" in which the family hamster talks about the emotional issues that arise when one parents is often away. Proceeds were donated to the fundation. Lorelli said he and his wife turned into lessons for their daughters on geography and foreign currency.
He also plays golf, but makes no claim to seious skill. "I've lost a lot of golf balls," he said. "I figure if you can't play well you might as well play fast. I'm terrible, but it's fun."
Like a moon shot
AEI is Darien's largest employer; 280 people work at its tidy headquarters on a shaded road just south of Interstate 95 where, on a late summer afternoon, a cluster of Canada geese nibbled on the lawn.
The company employs about 7,400 people worldwide. In the Hartford Courant's December 1998 ranking of Connecticut companies, based on gross revenue, AEI placed 30th.
The 64-year-old company has a history of moving goods as sturdy as heavy machinery and as delicate as pharmaceuticals. Formative early growth came in tandem with the postwar expansion of Caterpillar, the construction equipment manufacturer, into less developed countries.
AEI's other customers include Pitney-Bowes, Compaq, Hewlett-Packard and GlaxoWellcome.
AEI has a presence at more than 700 locations in some 135 countries.
After growing through most of the 1990s, AEI's revenue and income stumbled last year when the economic downturn that began in Asia put a crimp in U.S exports.
Revenue, income and operating profit through the first half of 1999 are all down in comparison with 1998, according to the company's secord-quarter earning report.
Lorelli said he would like to recreate an atmosphere at AEI similar to the sizzle at Pizza Hut where the company took aim at Mcdonald's. Everyone from the cheif executive officer to the mailroom, he said, was aware of the company's strategy, fostering a collective determination to succeed.
Lorelli has given himself two months from coming aboard in August to formulate a written plan for marketing AEI. Not surprisingly, the theme of flight informs his concept.
"You remember when John F. Kennedy said we'd put a man on the moon by the end of the decade?" said Lorelli. "That was an awsome vision for the country. But it was easy becuase he found the right way to articulate it, and everyone understood and everyone saluted the flag. They found the way to get them from here. That's what I'd like to see happen at AEI."
"I don't know what the right tactic is yet, but I will. I know the objective - raising AEI's profile and doing some seious branding. We need to crystallize the vision, find the right words to articulate it, energize the whole organization and let's go take the hill."
Lorelli was involved in several marketing firsts while with Pepsi. He personally appealed to Steven Spielberg to release "ET" on home video, something the director had long refused to do, in order to link its gargantuan projected sales with a Pepsi promotion.
Lorelli helped pioneer commercial advertising on home videos by placing the first one on "Top Gun,' released in 1987. A visit to Paramount studios to lobby for the ad resulted in a commercial that mimicked the style of the movie and, in the ultimate marketing kudo, was screened and given two thumbs up by Siskel and Ebert.
The Pepsi logo was unfurled on the mainsail of Stars and Stripes before the 1987 America's Cup, after Lorelli asked skipper Dennis Connor to seek permission from the race's governing committee. The press got wind that Connor had taken marketing to heart and turned out in force for the unveiling.
"Every camera in the world was there to see what he was up to," Lorelli recalled.
It was the first time an America's Cup sail had borne a corporate logo.
Lorelli and Connor have since become friends, and Lorelli has offered Connor marketing counsel on Stars and Stripes.
Lorelli left Pepsi to join the turnaround effort at Tambrands, which, he said, "had gone two decades without growth." Tambrands was a more profitable and streamlined company when it was sold to Procter & Gamble.