BMW MINI and Sales Promotion

In the NY Times article “Marshmallows and Public Policy” David Brooks describes a research project about the consequences of instant gratification. Children are offered the option between having one marshmallow immediately or two if they wait for a while first. It was the latter group that performed significantly better in their life later on. The article thus discusses the fundamental role of self-control and delayed gratification for a person’s favorable development and success.

At the same token, it can be argued that these values are of fundamental importance for the victory of any brand- often short-term gains must be sacrificed for long-term viability. While often being evaluated on quick results- often in quarterly reports- maintaining self-control is therefore the biggest challenge of the CMO. This need becomes particularly relevant regarding the concepts of brand extensions as well as sales promotions. I recently worked on a college project about the BMW Mini and would like to apply this concept to this example.

The need to engage in sales promotion remains the biggest threat for the long-term proposition of marketing. Already during introduction the average car brand faces the risk of falling into this trap. There are overlapping categories and hundreds of models- too many to conveniently fit into the mind of a consumer. The two major American car manufacturers- GM and Ford- try to launch every car model imaginable, eliminating the importance of well-differentiated brand in the decision making process. The cluttered environment resembles the dilemma of an average CPG brand in a retail store, resulting in the need to attract the attention of the increasingly price-conscious consumer. In that context, as it turned out, it was the need of instant gratification of GM that led to its decline. More than 55% of Automobile ads in Print were for Sales Promotion during 2008. The consumer is getting used to the rebates and increasingly wouldn’t even consider purchasing a car at full price.

Fortunately, upon its introduction in2001, the Mini could avoid these startup problems. First of all, by opening up a new car category, the consumer did not yet have a precise price frame of reference. More emphasis has been placed on the brand, while the Mini marketing did its best to maintain it like that. And secondly, selling predominantly through its own dealerships provides control as well as the possibility to abstain from any sort of trade oriented sales promotion. The initial sales objectives have been set intentionally low at 20,000 units for the first year, so that sales promotion efforts became superfluous. The company did not want to over saturate the US market and rather establish an aura of exclusivity through scarcity- a dream for all CMOs to live up to their sublime aspiration to delay gratification.

Nevertheless, as a result of the maturing market environment as well as the influence of the recession on new car purchases, the Mini is currently reaching a slowdown of it rapid growth. Sales promotion suddenly becomes a viable option again, due the requirement of defending market share and reaching new markets. In the past, the company had a unique approach: market to the owners, not potential mini buyers, hoping that a strengthened community would itself go out and proselytize others to the brand. However, in these times further incentives to attract nonusers could be essential to keep sales figures up- sales promotion as classical acceleration tool. It is hereby important to not risk any of equity. Mini needs to carefully complement the promotional efforts into its Marketing communication program and brand mantra in order to achieve franchise-building effects. For current drivers and prospects, to strengthen its community and provided incentives, Mini could for instance continue organizing contests and sweepstakes with prices such as a mini road trip through England and France. For prospective buyers, with regard to the economic situation, promoting leasing fares could be powerful to provide incentives. Value adding premiums such as offering a classy British-style navigation system in cars or unexpected service supplements also seem imaginable.

To sum up, with marketing being a long-term proposition, brand managers often are severely challenged to exert delayed gratification in their programs. Ever changing, uncontrollable market environments sometimes require to slightly deviate from their natural stance to practice self-control, but- when exerted with care- even short-term promotional programs can keep the dream of building brand equity alive.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Starbucks move into social media with its Holiday 2.0 campaign

After its nationwide debut in mainstream advertising, Starbuck's move into social media seems like a more promising route to further manifest the brand mantra in the mind of the consumer.


The company offers branded holiday playlists on Pandora that lead into a "All You Need Is Love" CD that is available in its stores for free when making a purchase of $15. Moreover, on a microsite called the “Starbucks Love Project”,
consumers can draw their own Christmas cards, send them to a friend and have it posted in the online gallery. With each card each contributed, Starbucks donates 5ct to a good cause. The whole initiative is supported by interactive online ads.


Not only is the Starbucks initiative a great example of how to create an entire integrated campaign around the web, but has the potential to boost the emotions affiliated with the brand. Starbucks clearly seeks to associate itself and the values of the “third place” with the emotional spirit of the holidays: Love (cards to friends and family), caring (donation to underprivileged) as well as coziness (seasonal music). All this is done subtly but brilliantly, rather than jumping on the bandwagon of using the holiday craze for overt commercial interests. This promotional latency suits the character of the most high-end coffee retailer in America and can itself turn out to be a strong point of difference during the holiday period, when every company in the nation will fight for out money .


Every element of the campaign encompasses and immediate call-to-action, while word-of-mouth will probably be the most valuable measurement index for the brand. And wasn’t Starbucks built on word-of-mouth? Online initiatives like this make it possible to revitalize the brand in a way that is authentic to its true essence. If the initiative drives traffic, the campaign seems likely to create high levels of engagement by energizing its consumers and loading the brand emotionally.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Obama Branding Strategy - one year after the triumph

Obama's campaign is often compared to the biggest success ever in the history of marketing. First, he was a relatively unknown African American man, younger than all his competitors, with a strange-sounding name. He was campaigning against two major opponents: Hillary Clinton, one of the most well-known woman in America, and John McCain, a well-known war hero and long time, experienced U.S. senator. In the end it didn't matter.

Barack Obama seemed to have the better marketing strategy than either of them. First of all he demostrated clear focus and consistency by ancheroing the concept of 'change' in the minds. And secondly, he managed to energize the base. Not only did the president use major social media in his campaign, like Facebook, Linkedin, Flickr, Myspace and Youtube, but also set up his own interactive community with Change.com. In addition, his campaign team engaged with other social media based communities such as Asianave, Blackplanet.com, Faithbase.com and many more. The campaign team took the time to interact with the social web, encouraging ratings, reviews, and opt-ins for follow up direct marketing information.

With this online engagement, Obama could convey the values of transparency and closeness that are fundamental for a politician. Polls showed that the youth base had been energized by his campaign. Without this word of mouth, grassroots movement, the elections would probably never have been won. The campaign team encouraged peoples’ natural desire to depend on others and engage in conversations for an outcome meaningful to them. In an article of the Washington Post, DNC spokesman Hari Sevugan said "We think that change happens with neighbors talking to neighbors, and these rallies reflect that".

Undoubtedly, president Obama fulfilled the criteria of successfully energizing the base, as it if often referred to in political terms. The campaign was believable, self-reinforcing, and self-spreading. Moreover the basic techniques for connecting with the brand enthusiasts have been met: tapping into the enthusiasm with ratings and reviews, create a community to energize the customers (change.com), and participate and energize online communities of the brand enthusiasts (asianave, black planet etc).

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

The commoditization of Brands

In discovery of the US airline industry, my respect goes to JetBlue for its attempt to stand out in the jungle of equality. With its credo of being the “fun airline”, reflected not only in the motto of “Happy Jetting”, but also in the 36 direct TV channels, free wireless, and the Customer Bill of Rights, I think there is something we can learn from this company not only in terms of the product itself, but also of how successfully engaging customers might look like.

The airline industry actually drifted away from being having differentiated brands, towards commodities. Whats the difference between Delta, US Airways and American airlines? Having trouble? Well, I can name you a similarity: They all try to squeeze you in like sardines, treat you like cattle and rip the last penny out of your pocket for a little bit of incremental revenue (I recently read that some airlines are considering to charge customers to go to the toilet). Whenever I get on an airplane nowadays, I end up checking my watch every 10 minutes, surprised at how slow time can pass. What happened to the experience? Big respect therefore to Jet Blue for its attempt to reestablish some points of difference to stand out in market like that.

Another example of how entire industries are becoming commoditized is what is going on in the conventional retail world out here. However, when going to Trader Joe recently, I figured out how much they are standing out as well from the industry standards. What’s the difference between Shaw’s, Food Master and Stop & Shop? No idea. A similarity? Maybe that they seem to spend 99% of their promotional budget on attracting the worst customer base imaginable- the cherry pickers who come in there only to go hunting for the special offers of the week. They have trained us to be like that. Or is there another reason a customer would choose one supermarket over another,- (except for the proximity to their houses)? So again, my respect goes to Trader Joes, which managed to really stand out in the retail jungle out there. It is price stable, offers a different shopping experience and true brand value. People are drawn to the great products rather than the price tags. Compare the online presence and that shows everything: Trader joe’s web site tells a truly unique story; giving an insight into the great brand world. Shaw’s homepage -on the other hand- consists to 90% of the latest coupons and saving strategies. Sales promotions remain the most dangerous tactis in the marketing communication portfolio. When not handled with great care, they can destroy a brand that has been built up over a lifetime- in the blink of an eye.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Starbucks vs Starbucks

Starbucks definitely redefined the coffee business and showed what a strong brand can add to a mere commodity such as coffee. It is selling an experience, rather than a product, in a way that can serve as a how-to guide for many brands out there. Nevertheless, they too, have tried jump on the bandwagon of being everything to everybody. Introducing such item as Starbucks liquor or ice cream in the past, it fell victim to the typical management thinking that hurts us marketers: expand the business, rather than the brand and market share. That didn’t go anywhere. As a result, they lost the position of America’s No. 1 coffee retailer to good old Dunkin. Fortunately, the new CEO Howard Schulz, decided to get back to the roots of the business, which is coffee (surprise, surprise).

But now they try to get into the instant coffee business. That hurts anybody concerned the nature of building brands. And the taste test are supposed to prove that the powder stuff tastes as good as the real thing? Common, lets be honest. That move devalues the loser as much as it praises the winner. And that in its own stores! It would have been a great attack of an instant coffee brand against Starbucks, similar to the Pepsi Challege in the 80s against Coke. But the world’s leading gourmet coffee brand rather decided to set up blind tests directed only against themselves. That hurts.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Traditional journalism’s reincarnation into the blogsophere

This article doesnt have much to do with my usual posts on brand strategy. However I feel like sharing, as it can give us bloggers something to think about.

Do you believe in Karma? This article from today’s Fastcompany (10/22/09) “Blogging Is Dead, Long Live Journalism” deals the fall of the bloggosphere and the rebirth of journalism.

It is nowadays possible to make a good living out of blogging with an average of $122,222 for full time engagement! This is a huge opportunity for small start-up journalists, as well as old, established journalists who suffered from the decline of traditional print media. Looking at these numbers it appears as if the scaringly inevitable force of globalization is finally reaching the blogosphere- the big ones get bigger, the small ones get smaller. If this consolidation continues, it seems as if we might soon have to redefine what blogging actually means. The medium risks loosing its essence.

So far it has been the hobby nature that made the medium so particular. However, in case in the future the primary interest will be of a financial nature, the medium risks becoming just as mainstream as traditional print media in order to attract the widest user base possible. Bigger bloggers might start to increasingly fight for our attention in order to receive more advertising dollars. And the big losers will be the everyday, hobby bloggers- those that so far gave the medium its fundament.

Our attention spans are shorter than ever and everybody prioritizes, following only a selected amount of blogs. There seems to be a significant danger that -over the long run- only the big blogs make it into our consideration set, while the smaller ones merely coexist. We could be the ones killing the traditional form of blogging.

On the other hand, its often talked about that the days of traditional journalism are coming to an end. And euthanasia of the medium should be the best solution. However, reading this article gives hope that there will be some kind of journalism Karma. Its spirit might just be reincarnated into a new medium- the blogosphere.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Subway and the "$5-footlong" Beast

“$5 foot long”- that jingle of the Subway advertisement seems to have pursued me on nearly any of the rare occasions I switch on the TV. Was it a just coincidence and a great way of targeting; or was the media planning intentionally that bold to ensure highest frequency and reach? Surprisingly, my friends also knew the spot and could hum the melody easily. This makes me wonder: Is a big campaign around a simple sales promotion the new way of recession advertising? And is such exposure and ability to be recounted really favorable for a (short-term) sales promotion? I believe no.

First of all, with that jingle still ringing in their ears for a long time, consumers might become accustomed to the new prices, and expectations might shift- this is dangerous as the promotion is only for a limited time and because the $5 deal not even exist in all Subway franchises. Disappointment seems predetermined. Just as with any kind of sales promotion, a 5$ foot long is motivating and exciting the first time, and perhaps the second time. But eventually customers come to expect it, so companies must cut prices further to create excitement and drive sales.



The second danger is that it the campaign has nothing to do with promoting the Points-of-Difference of the brand and is destined to prompt a competitive reaction. In weakness there is strength for the competitor. One does not have to be a clairvoyant to predict that in no time somebody would come along and destroy the bold campaign, simply by negating the promoted advantage. And surprise, surprise: Quizno as well as Sheetz's now offer the $4 footlong.

And third, as with any kind of this sales promotion, the brand may weaken because brand-building programs were cut. That will force the Subway manager to implement more short-term programs, continuing the vicious cycle and sending the brand into a dangerous downward spiral. But even in these times, Subway marketing must balance building short-term numbers with building a long-term brand.
Subway could clearly profit from maintaining consistency in its messages in order to break the clutter with its “eat fresh” message. As market leader, it still has the pioneering advantage, and rather than engaging in price shouting matches, message consistency and a promotion of the sandwich category could be more beneficial.

The toughest sub competitor Domino which has waged war against subway itself (“Domino beats Subway 2:1 in national taste tests”) could even serve as an additional frame of reference : After the recent food scandal, the freshness value has once again become a serious matter of public concern. If Subway should have followed the No.1 branding rule to keep consistency. Even when times are difficult, it could now allocate the millions wasted on the $5 foot long campaign to really build on its selling proposition in a meaningful manner. It could further offer consumers a more abstract, emotional benefit related to how good and healthy the consumers will feel as a result of eating subway subs. “Eat fresh” is also linked to the fact that subway regulars have traditionally ordered their sandwiches in highly personalized ways. (“one 6 inch, sesame roll turkey sandwich, with extra olives and just a little honey mustard on top”). A trip to Subway can promise self-expression and self-indulgence in an otherwise unfulfilling recession day. Both are examples of how to embellish the brand positioning to changes in the time.

This laddering up from a tangible feature to a functional benefit to an emotional consumer benefit could provide a means of powerfully sustaining Subway’s position. If these points of differences were sustained and consistently highlighted in communication, the brand equity could rise to an extent where customers would not choose to go to Subway only because a footlong sandwich costs $5 instead of $6 for a limited period of time- loyal consumers would even be blind to it. In contrast, Subway needs to stay (at least slightly) higher priced than its competitors to highlight the perceived quality value. With the bold 5$-footlong campaign, Subway has weakened itself. And because it is less protected by a set of powerful, unique perceptions that define it, the brand made itself more vulnerable to direct attacks in the long run.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Dos Equis- In Focus there is Strength

The Dos Equis campaign is a perfect example of how targeting on the basis of behavioral and psychographical factors can connect much more efficiently with consumers than the conventional demographic segmentation strategies. The Dos Equis benefits clearly infer the user type of the beer- male, occasional beer drinkers of any age who desire excitement and adventure. The beer category is heavily advertised and there is an army of different brands seeking their piece of the pie. However, surprisingly, the segment of occasional users has never been targeted explicitly by any of the numerous brands out there. It is a segment that does not care or cannot differentiate between rational beer attributes (half the carbs, coldest, less filling etc), but rather wants to make a statement about their persona when drinking. The ad is a great example of how brands can connect emotionally by focusing on consumers’ aspirations. In all advertising, the judgments of consumers are rather outcomes of inferential than literal processing- an approach that Zaltman clearly outlines as advantageous in his renown book “how customers think”. Consequently, the link to excitement, socializing and adventure are a clear reflection of the Dos Equis consumer’s desired self- the things that they aspires to in life. Just as older people often aspire to be younger, and younger people want to be older, many people in our work-oriented culture have subliminal aspirations of a life such as the “most interesting man in the world”. In above-the-line-communication, only the brands that manage to connect emotionally with consumers have a chance to break through the clutter and make an impact. And what about the exclamation at the end to “stay thirsty my friends”? The ad indeed made me thirsty for a Dos Equis- or was it the desire to go on an adventurous journey? Well done, Dos Equis!

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Heinekens new commercial- so funny, but effective?

The recent Heineken commercial was a big success in terms of reach and frequency. Originally created by their Dutch advertising agency for the domestic market, the spot soon became a viral hit in the web and is now also aired internationally in mainstream TV (at least in the US). It has been lauded mostly because of its originality and creative wit. However, the fundament of successful advertising is its strategy. Creativity usually only assumes the role of magnifying the brand’s point of difference. Probably because the spot was initially destined only for the Dutch market, it fails to accurately fit into the international beer landscape.

In contrast to the US or most Western Europe, Holland is a much more horizontal culture, where individualistic proliferating is not regarded positively. Sayings such as “the nail that sticks out gets hammered down” or “if you put your head above the water, it gets chopped off” may well describe the archetypical Dutch culture. In the Netherlands, Heineken is not the leader, primarily because it is perceived as a global powerhouse. I studied there for three years and my feeling is that people prefer beers like Grolsh, because they are more modest and down-to-earth. Consequently, hoping to not lose track, at least in recent years, Heineken seems to have built upon the social value and friendship-forming ability of beer as its USP- a positioning that also becomes obvious in the recent “walk the fridge” commercial.

However, the beer’s major markets are abroad, and therefore also the communication strategy needs to be adapted more to the local audiences. Think global, act local. Heineken cannot take their ethnocentric approach and extend its domestic brand equity smoothly over the borders of its small country.

Interestingly- probably as a result of the failure of communication to steer the brand into the desired direction- in the international arena, Heineken seems to have drifted into the exact opposite position, as in its domestic market: The beer seems to possess a rather upscale image, and people don’t buy a Heineken for its great taste or because of its association with friendship, but rather to make a statement. Heinken stands for wealth, prestige and (arguably) style. Heineken should elaborate on what is already in the mind of the consumer, in order to make a difference, and clearly target a specific market segment.

Does this mean that Heineken should exclude all the average beer drinkers as a target? No, the target is not always the market. Just as much as Marlboro cigarettes are not only smoked by rugged, male cowboys, Heineken does not have to be consumed exclusively by upper class, social braggarts. Consumers assume different roles in their lives, and also the ones who just wish to be perceived as the latter would be potential consumers. One of my favourite branding quotes by the author Wiliam Feather - (also indicated on the right) illustrates this notion: "The philosophy behind much advertising is based on the old observation that every man is really two men -- the man he is and the man he wants to be."

Just as many other marketers, Heineken seems to view consumers’ minds as blank pages on which they can write anything they want- if only they can find a clever enough way to do so. But people don’t passively absorb these messages, but rather create their own meaning by mixing the brands messages with their own memories. And the Heineken ads might subconsciously confuse the perception they have build up in their own minds.

And the claim “serving the planet” seems to be misplaced as well- basically another meaningless slogan in a sea of meaningless slogans. What consumer benefit does it offer? Upon the question why does one choose Heineken, no consumer would respond “because it serves the planet”- the reason-why is missing. Even though the slogan fails to elaborate on people’s perception, the message of “the leading global beer” might be more appropriate, as people often equate “leading” with “superior”.

It seems a big waste of marketing dollars to try to jump on the positioning bandwagon of 90% of global beers with its focus on friendship and social ties. In its communication messages, Heineken fails to differentiate itself from the rest of the beer brands out there and therefore stays far behind the potential.

Francesco Wesel MA
Integrated Marketing Communication
www.francescowesel.com
www.brandnewtimes.blogspot.com

Record low in voter turnout for EU elections- what Bruxelle can learn from Marketers

During the first election in 1979, 63% of the people still voted in the EU parliamentary elections; last week we have reached a record low turnout of only 43% - a clear sign of a weakening trust in the institutional government. What are the reasons? Already years ago – before the eastern enlargement to add 10 Eastern European countries to the EU core of 15- the debates circled around whether the EU will be able to sustain all the growth initiatives at once. “Integration vs Enlargement” were the key words in the argument. In many ways- I wondered- the political move resembles the characteristics of a typical brand extension. And while a brand manager would have argued that the EU and its prospective new members are not ready for an extension, politicians in Bruxelle chose the opposite. Let’s enlarge first, and then take care of making the system work, especially bringing the EU closer to the people.

When looking at certain brand categories such as vodka with Absolute (Sweden), Finlandia (Finland) or Smirnoff (Russia), it becomes obvious that not only for an international organization -like the EU brand- countries can be powerful symbols of brand association. Take a careful look at a Louis Vuitton watch, and you’ll note that it is ‘Swiss Made’. Switzerland’s legendary watch- and clock-making history seems fundamental for Louis Vuitton to keep its perceived quality during the transfer phase, just as Louis Vuitton’s migration into the shoe business was associated with the claim ‘Made in Italy’, because it is the well-known origin of elegant shoes. Louis Vuitton higlighted its decade-old strategy of using country-of-origin as part of its a branding strategy. The key for the succes of these extensions seems to have been that the consumer was able to believe that the core values surrounding the mother brand sit comfortably with the newly introduced product. This match between the original EU values and its new member states has not been very prevalent until today- as it became obvious in the preface to the Iraq war, for instance. There are few brand links beyond the EU logo.

In the marketing world, some corporate names (such as Kraft, GE or Ford) are on so many products that they lack strong specific associations. Their value then is primarily to provide feelings of recognition and perceived quality. However, the EU brand also did not seem to be well established at the time in the mind of its people at this stage. Only if the original EU 15 brand associations were very strong, transfer of negative associations (of the new members) to original brand (the EU core) would be less likely.

Because this was not the case, the extension not only dramatically watered down the key asset and brand name of the EU in its original setting, but also in the new context- the voter turnout was the lowest in Eastern Europe, with some countries only reaching around 20%.

To return to the initial question: From a brand manager’ point of view, was it wrong to enlarge the EU rather than integrating its core first? Probably yes. While the political implications are complex, a brand manager would have criticized the EU for another strong reason: the extension has not been supported by communication to transport the EU core values to the new members and enhance the brand image altogether. Mental associations that are shared, are strong, shared by many and affect consumer behavior should have been promoted strongly. Only that way, the enthusiasm and trust in the institutions can be substantially leveraged, in order to ensure a solid operational basis to the EU functioning through the mandate of the people in the long run. Branding and politics do not exclude each other. The Obama election campaign can serve as a great example for this endeavor. Change - and Positioning - You Can Believe in.

Francesco Wesel MA
Integrated Marketing Communication
www.francescowesel.com
www.brandnewtimes.blogspot.com

„Reinvention of GM“- why not earlier? The filing for bankruptcy of GM can serve as a future case study of big time branding failures.

While the media landscape generally traces the General Motors disaster back to tangible factors such as the failure to build cars of contemporary taste (small and fuel-efficient) or too high labour costs (aren’t they even higher in Germany?), one view is generally neglected: the failure to build brands, rather than merely automobiles.

Once upon a time, GM successfully catered to the needs and wants of the American car buyer: well distinguished sub brands that made it possible, and desirable, for customers to easily upgrade their style, changing to other brands within its portfolio. You could start by a smaller model such as a Pontiac and, in line with the notion of the American dream, just get a Cadillac once your in your career skyrockets - no need to end your love affair with Detroit. In their book “the 22 immutable laws of marketing”, Ries and Trout argue that the law of the category indicates that every category will divide into smaller subcategories, requiring that every brand shall be treated with caution in order not to lose focus. GM started with a single model, then divided into eight sub brands (Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, Saturn) which then line-extended in pursuit of gains in (short term) market share. Cadillac, for instance, has diluted the power of its “luxury” brand with low-end models such as the Cimarron or the Catera. All of GMs sub brands ended up going after everything- while ultimately standing for nothing. They jeopardized and lost the most valuable asset they could have: their position in the mind of the consumer. For instance, what is the most advertised GM brand, Chevrolet today? The answer would be quite difficult: It is “a large, small, cheap, expensive automobile or truck”, as Al Ries notes in the Ries Report. None of the new models could be nurtured in a way to have a strong and distinctive positioning but rather gave room to a vast, confusing overall brand architecture. GM provides a vivid example of teh risk of a so called house of brands strategy: Over time their once uniquely positioned brands became more and more similar. In a bid to increase efficiency, the company came to sell essentially the same car under different brand names. As a result, GM brands not only lost its meaning, but also competed with each other, the company became forced to divide the resources, and the portfolio lost ground to the competition

Interestingly, Ford realized this flaw earlier and cut their portfolio from 97 models to merely 40 within the last two years, in order to gain more brand focus and synergize with the 80/20 rule- that 20% of their products account for 80% of the gross profit anyway. Consequently, Ford did not have to go on government life support, which could be viewed as one of the major reasons for its (relative) success during the last months. GM, on the other hand, had its back broken by the acceptance of the bailout money. In a category that is so much determined by brand image and emotional touch points, nobody wants to buy from a ailing automobile manufacturer. Hence, the loss of equity resulting from the bailout is worth much more than the actual money itself. And the indirect consequences of the crisis are even more severe: government and the public have taken the legitimacy of the company’s only solution to the crisis: marketing and communication. With everyone of the former management still present (except Wagoner of course) and without the possibility to market effectively, making over the corporate image and ultimately driving more people to buy its brand seems virtually impossible. The perception of the brand in the consumer's mind seems too much damaged. Interestingly, GM now at least chose to jump on the band wagon of a more focused brand portfolio through the reinvention of GM- less brands with more focus. However, whether the company can rise from the dead with this measure remains highly questionable. Even generally futile marketing moves are worthless, when not timed accurately.

Francesco Wesel MA
Integrated Marketing Communication
www.francescowesel.com
www.brandnewtimes.blogspot.com

CEO vs CMO

I recently read an article by Lloyd Truffelman titled "Blame CMO turnover on metrics mania" (originally published on June 18 edition of AdAge).

As markets, the media landscape and consumers are becoming more and more diverse, a strategic approach to marketing is fundamental. Undoubtedly, marketing and communication needs facts as a solid basis in order to be tailored to specific market segments and choose appropriate mediums from a wide variety of media channels if it wants to be successful.

Nevertheless, times have changed, making it difficult for traditional marketing difficult to be realized. The initial pure informational marketing efforts did not survive the constant social developments of time. An growing partial attention of the consumer due to the abundance of available channels, as well as an overflow of communication messages have created new challenges for the entire industry. It has become increasingly difficult for marketers to capture the attention of the audience, which is why creativity is has long been a buzz word in the industry. The common belief has been that marketing and communication needs to be creative, new and original in order to be successful. Consequently, while having a strong strategic fundament, today’s marketing needs to be of an entertaining or interactive nature and at the same time offer a strong emotional appeal.

In that context, it needs to be highlighted that marketing is not a battle of products, but a battle of perception, which often forms the major discrepancy between the mindset of a CEO and a CMO. People believe what they want to believe; and see what they want to see. Truth is illusive, making it impossible for marketers to change a consumers mind even if rational facts show promising focus points for their brands. Even though “fast” might be the major DMU to prefer one fast food chain over another, Burger King cannot use it as a central theme in it’s communication, as in the mind of the consumer the word is owned by McDonalds. Management however often focuses on facts, because they believe in objective reality. It is then of course easier to believe that truth is on their side. Armies of researchers are employed, focus groups conducted, questionnaires tabulated and what comes back in a two pound report is often a wish list of what consumers want. But if brands go after everything, they might risk standing for nothing. No two companies can own the same positioning in the mind of the consumer. It is therefore much more complex, involving a combination of issues and trends of the market and consumer environment with one’s own brand mantra. And that largely involves the intuition, the gut feeling of the CMO, in order to come up with a creatively original execution.

As the Trufelmans article rightfully points out, an “overreliance on metrics” can “crush creativity”. This pattern holds true for battles between general management and the CMO as for interagency dissension between –for instance- account planners and creatives. The big challenge therefore often consists of finding the right balance between strategy and creativity. If marketing was indeed like Jazz music, the musician would have to ensure that his music is unique and new, while being in line with the contemporary taste of the listener as well as general music market trends, in order to be successful.

Undoubtedly, a consequence from these constraints on the CMO is that companies often try to "communicate" when they should actually be trying to "position." And in today's over communicated society, it takes endless repetition to achieve this effect. For instance, as Al Ries repeatedly exemplifies in his columns, the BMW might not be the most fun car to drive, but with their consistent claim of “the ultimate driving machine” they have anchored the "driving" position in the mind. For a typical consumer brand to come to this point, that might mean years and years of advertising and hundreds of millions of dollars. Most companies don't have the money, vision and patience to do that and if immediate results are not visible, the marketing department is usually the first one to blame. Consequently, companies jump from one message to another, hoping for an eventual magic pick that will energize their brands. However, this approach does not work today. It appears as if Pepsi changes their logo, marketing messages and slogan continuously and with that never succeeded in surpassing “the real thing” Coca-Cola. The only thing that works today is the BMW approach of strict consistency. Integrated marketing Communication means not only a synergy of different marketing tools but also to have a brand with a common sound, look and feel over time. And that simply is not possible with an average CMO tenure lasting only 26 months. Marketing Managers need time, trust and creative freedom to achieve enduring success and strategic advantage in the market place.

For another interesting perspective on the subject, note this podcast episode of "The Ries Report" by Laura Ries:

Francesco Wesel MA
Integrated Marketing Communication
www.francescowesel.com
www.brandnewtimes.blogspot.com