Branding Strategy Insider

Auto Brands: Ignore the Future, Become the Past

What will consumers do in the future? This question leaves marketers dolefully scratching their heads. The combination of market complexity and a huge number of potential economic and cultural outcomes can produce an enormous array of market permutations.

Despite this, predicting future consumer behaviour - or at the very least hedging your bets against potential outcomes - has never been more important. Take the big three US automotive manufacturers: Ford, General Motors and Chrysler. Each is, to use a technical marketing term, absolutely screwed. This is not because they could not see the future, but because each chose to ignore the big bend in the road ahead.

Ford won plaudits last week for chief executive Alan Mulally's rescue plan, under which truck plants in North America are to be re-equipped to produce more fuel-efficient European models such as the Fiesta, and greater numbers of Ford's hybrid cars.

Ford does not want you to remember that in 2000 it committed to reducing the fuel consumption of its cars by 25% and selling 250,000 hybrid cars by 2010, before getting cold feet and opting for business as usual.

The lag between the two commitments could prove problematic. At present rates, I would estimate that Ford will run out of cash in 2011, and there is no guarantee that its new output will prove popular when it goes on sale in the US in 2010.

However, Ford staff can at least be glad that they don't work for Chrysler.

Branding Small Municipalities: Visitor Attraction

What does it take to get visitors to stop in your town? Better yet, what does it take to get them to make your town a destination?

As with all other brands, your town must deliver each of the following to become a strong brand:

•    Awareness
•    Relevant differentiation
•    Value
•    Convenience
•    Emotional connection

Let’s start with relevant differentiation. That is the most important driver of strong brands. Why should someone stop in your town or, better yet, plan a trip to your town? What makes your town unique or more compelling than others?

To determine relevant differentiation, you must first identify your municipality’s assets. Is it near a lake, a mountain or a cave? Does it have a large waterfall? Is there a whitewater river nearby? Is the weather particularly nice at certain times of year (or year-round)? Does it have a well-known golf course? Does it have a unique museum? Does it have an interesting history? Did a famous person grow up or live there? Does it have unusual architecture? Does it have a rich cultural life? Is it the home of an annual fair? Does it have an annual art, music or film festival? Does it have an annual sporting event? Does it have interesting ethnic neighborhoods?

Next you must determine what types of people are most likely to be attracted by your municipality’s assets.

Marketers Are Weakening Marketing

I had a wonderful experience with Harrison Troughton Wunderman a few years back. I was invited, along with Martin Thomas, then with Nylon, to discuss 'responsible communications' in marketing.

Thomas's point was simple. Marketers spend their lives ensuring that wherever and whenever the consumer looks, they see the message. Usually this results in a diagram of an unfortunate consumer being assuaged from all sides by an army of communications arrows. We 'immerse' the consumer, with 'total communications' that are experienced '360 degrees'. We trade utility and discernment for ubiquity and repetition.

And as we do this, the clutter that marketing communications has become, increases. Three billboard ads where once there was one. Four pop-up web ads per hour on a screen when once there was none. As an industry, our prime goal is to discover ever more annoying, repetitive and unwelcome ways to immerse our unfortunate target segment (and the rest of the population) in the brand. Our response to clutter is more clutter.

The marketing communications industry must pull itself out of this ever-decreasing spiral of clutter. But how is this possible? The only communications industry exempt from clutter is public relations. PR has avoided the clutter trap, not through any advanced approach from PR professionals (that'll be the day), but because any and all PR attempts are limited by the discretionary force that is the editorial team.

Establishing a 'Branded Language'

Disney, Kellogg's, and Gillette are three completely different brands with one commonality. Over the past decade, they've established a branded language, whether they know it or not. In my latest book, we found 74 percent of today's consumers associate the word "crunch" with Kellogg's. Another 59 percent consider  the word "masculine" and Gillette as one and the same. Americans formed the strongest association of masculinity to Gillette, by an astounding 84 percent.

Disney scored higher in purloined language than any other brand. This brand welcomes you to its kingdom of fantasy, dreams, promises, and magic. If you've stayed at a Disney resort, taken a Disney cruise, or eaten in a Disney restaurant, it doesn't take long to hear "cast members" greeting guests with, "Have a magical day!"

For over half a century, Disney has consistently built its brand on a foundation much larger than its logo. A substantial chunk relies on songs and voiceovers that almost always include Disney-branded words. Associating words with brands comes at no extra cost. Disney's manages to "own" six of them: "dreams," "creativity, "fantasy," "smiles," "magic," and "generation."

Our BRAND sense study shows over 80 percent of the world's population directly associates these generic words with Disney.

Marketing's Great, Untold Stories

Great marketing is great storytelling. All great religions are sold via storytelling, or parables as they are often called in Christianity. This is a good strategy; people are inherently interested in stories, whether in films or novels or, even, brands. The problem is that the stories often go untold. If you're still a skeptic, let me tell you some amazing stories you've never heard about some very well-known companies and brands. Let's start with the world's largest company.

Wal-Mart: Founded by Sam Walton in 1945, this company now has 1.3 million employees and is the largest retailer in the world. While everyone knows about its low prices, very few know the story behind them. To deliver these prices, the company uses some amazing technology and computer systems. It encourages suppliers to shrink package size to reduce shipping weight to save money; it buys local produce to avoid transportation costs. Sam's Club buys coffee directly from growers to avoid costly middlemen. The company works hard to save people money, but it's a story never told.

Southwest Airlines: Herb Kelleher set out to launch a different kind of airline. He flew out of secondary airports as a way to avoid costly hubs. He flew point to point so his customers didn't have to change planes. He flew only one kind of airplane to reduce training and maintenance costs. He decided not to have expensive, lousy food. This saved money so customers could go to a better restaurant when they arrive at their destination. He replaced costly reservations systems with re-usable boarding passes. Herb turned the airline industry upside down, but it's a story never told.

The Future of Branding

The Future of Brand Management: My Prognostications:

•    Building emotional connection will be key
•    Brands will focus more on creating/engineering the total customer experience
•    Customer-relevant innovation will be a key success factor
•    Outstanding customer service will also be a key success factor
•    Hiring the right employees and creating the appropriate culture will be essential
•    More and more, brands will co-create the customer experience with the customer
•    More and more, brands will need to "stand for something" to survive
•    Strong brands will not only "stand for something," they will also provide forums for people who believe in what the brands stand for
•    Organizations whose employees become consultants to and friends and partners with their customers will be the most successful
•    One-on-one marketing will become more and more important
•    The Internet will also become increasingly important as a brand building vehicle
•    For larger organizations, customer relationship management (CRM) will become a critical success factor
•    Fast, flexible and agile organizations will increasingly "win" in the digital age

Social Responsibility: The Nike Story

An odd couple was featured in the 1992 edition of Harpers Magazine. One was a sports phenomenon called Michael Jordan. The other was a young Indonesian worker called Sadisah.

Sadisah, the article revealed, earned 14 cents an hour making Nike running shoes. After working six days a week, 10 hours a day for a month, he earned enough money to buy a single Nike shoe at its US retail price. The article also claimed that Sadisah would have to work for more than 44,000 years to earn as much as Jordan had recouped from his Nike endorsement deal.

The darkest chapter in Nike's history and a new era in brand management had begun. Over the next five years Nike experienced a remarkable public backlash. Critical reports appeared in publications as diverse as The Economist and Rolling Stone and charities such as Oxfam and Christian Aid joined in.

Around the world, the opening of NikeTown retail stores were turned into tense, often violent, standoffs between local police and protesters. On US university campuses, students protested against Nike's links with slave labour working conditions and forced their sports teams to sever lucrative sponsorship deals with the now infamous sportswear brand. The internet was ablaze with anti-Nike sites, many featuring cleverly altered versions of Nike's identity such as the 'Swooshtika' and slogans such as 'Nike: Just Don't'. As then-chief executive Phil Knight observed in 1998, the brand had become 'synonymous with slave wages, forced overtime and arbitrary abuse'.

For decades, Nike had tendered almost all of its production to factories in developing markets, but so had almost every other big clothing company. Why was Nike so heavily criticised?

The Corporate Reputation Factor

In his white paper, “Communication as Value Builder,” Dr. David Jensen, Senior Vice President with Ketchum in Atlanta, cites a 1998 study by the Wirthlin Group, which concludes that:

•    “Companies with good reputations are 7 times more likely to command premium prices for their products and services,
•    5 times more likely to have their stock recommended,
•    4 times more likely to be recommended as a good place to work,
•    3 times more likely to be recommended as a joint venture partner, and
•    1.5 times more likely to receive the benefit of the doubt.”

Sponsored By: Brand Aid

Defying Demographic Segmentation

I started to feel it in late 2006. An inchoate sensation in my knees that gradually moved up my spine as the weeks progressed until it finally started to influence my thought processes.

Looking back on my actions it is clear that my behaviour patterns had begun to radically change long before I actually realised anything was different.

My growing interest in plants and sudden attraction to gardening implements should have tipped me off. Then there were the protracted conversations with colleagues about superannuation and pension plans that were genuinely exciting.

Most telling of all was my increased predilection for real-estate agents' windows. Even when in Tokyo visiting friends last month, I found it impossible not to stop and scan the properties on display, despite the fact that the words and numbers that accompanied each picture were as indecipherable to me as they were irrelevant.

Consumers, you see, don't age. Instead, we leap from one demographic segment to the next. Rather than following the gradual chronology of life, marketers have always clustered us into classic sub-groups.

I have been ageing all the time, but as far as marketers are concerned, whether I am 18 years and two days old or 34 years and 300 days, I am the same man. Until, of course, I cross the threshold into the next market segment, then I change completely.

I turned 35 on December 20, 2006. While it is not a milestone for most cultures, we marketers realise its significance. I left behind the 18- to 34-year-old segment that accounts for 64% of lager consumption, 68% of football attendance and 79% of soft-core pornography. I became a card-carrying member of the 35- to 55- year-old segment that dominates market sectors such as barbecues and erectile dysfunction.

Interactive Marketing: A Friend of Brands?

A+b+c> 3a or 3b or 3c. It is the formula that explains why integrated marketing is such an important concept. Rather than spend their total budget on advertising, for example, marketers should spread it across a range of channels that can include advertising, but also comprise tools such as product placement, PR and interactive media. The synergies, 360-degree impact and disparate strengths of each channel ensure a better return on investment.

Consider the US launch of Chevrolet’s 2007 Tahoe. Rather than the traditional advertising-heavy launch, Chevy's ad agency Campbell-Ewald created a highly integrated campaign.

First came product placement - the Tahoe was the featured challenge on the opening episode of the fifth series of NBC's The Apprentice. After the show, the interactive kicked in at Chevyapprentice.com - a site where visitors could complete their own apprentice challenge by creating a 30-second execution for the Tahoe using Chevy-supplied clips, soundtracks and their own text. During the four-week competition, public relations would then promote the site through traditional media, while viral communications would allow users to display their self-created ads online.

Marketers, however, have a passive view of interactivity. In our trade, interactive means visiting a web page or responding to marketing in an active, but intended, manner. We rarely use the term interactive in its true form; where two equal parties meet, share viewpoints and engage.

Interactive marketing is an oxymoron. The first half of the concept stands for equality and discourse, the second for control and monologue.

Chevy's Tahoe campaign turned out to be a perfect illustration of the paradoxical perils of interactive marketing.