June 21, 2009
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
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
June 10, 2009
„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
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
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