Wednesday, October 31, 2007

The joy of selling less

Today’s Wall Street Journal reports on General Motors’ decision to limit production of its Buick Enclave. By intentionally restricting supply GM has kept the car “hot” months after its launch and avoided brand-diluting rebates and 0% financing deals. How many times have we seen car companies launch shiny new models for which they’ve invested five years and hundreds of millions to develop only to resort to bribing buyers within months after the launch.

United Airlines, a client of Barrie D’Rozario Murphy, has exercised similar restraint by cutting capacity in an attempt to align supply with demand and regain pricing power – a feat almost unheard of in the airline business. Consequently, United’s earnings are healthy and it can now invest in new services for its profitable business travelers, such as its new international premium service, which will further grow profits.

Automotive and airlines are two categories in which, for years, capacity has grown faster than demand as companies competed for top-line revenue and market share at any cost. The same is true in many manufacturing-based businesses - particularly consumer electronics. It's refreshing to see two companies remember the fundamental premise of brand marketing -- branded products create unique value for customers at a premium price. That’s why we brand.

Tuesday, October 30, 2007

Brand X for president

There is an increasingly blurry line separating politics and marketing. I’m sure one can make the case that this has always been true, but most political junkies will point to Lyndon Johnson’s groundbreaking “Daisy” campaign commercial as the tipping point that ushered in the modern era of political marketing.

Candidates today are neatly packaged like brands. They have catchy names (Barack!). Like brands they often need to be repositioned (Rudy, now kinder and gentler). Sometimes they launch line extensions to increase market share (Hillary, with 50% less Bill). And they employ many of the same media strategies embraced by successful brands – e.g., product placements on The Tonight Show, viral marketing on YouTube and social networking on Facebook.

With all these similarities, why don’t we trust politicians as much as we trust household brands? A recent survey from the Pew Research Center shows that Americans believe the federal government is ineffective and wasteful and that we are pessimistic about our elected politicians’ ability to do the right thing.

So what can we do? Well, if our politicians want to behave as brands and not leaders, then let’s treat them as brands.

We must demand the ability to evaluate a candidate’s content like we do a can of soup. Food products are required to carry clear nutrition labels, so should our candidates. Let’s insist that candidates stand next to a sign at all debates, photo-ops and stump speeches that clearly articulates their positions and that the sign, like food labels, be consistent and present at all times.

We must demand the ability to compare and contrast each candidate’s quality and reliability – a form of Consumer Reports for candidates. And I don’t mean some dusty and dense policy review from the League of Women Voters. We need something snappy like a J.D. Power rating or a CNET numeric score.

And while we’re shopping for a new president, how about insisting on a rock solid warranty with no fine print? We don’t buy our cars without a warranty. Why let our politicians off the hook? Let’s insist that a first-term president cannot seek re-election if, by his or her third year in office, they have not fulfilled at least 50% of their campaign promises.

I’m not going to give up on this democracy thing. Although it's a relatively new product on the world market, I think it will have a long shelf life.

Thursday, October 25, 2007

Wii need more fun

Sony’s recent earnings report showed continued weakness in its PS3 business relative to the booming fortunes of Nintendo and its hot selling Wii.

Industry analysts and gurus will likely focus on issues such as price and technology to explain the dynamics in the videogame category. But over a recent breakfast with a Sony exec I heard the clearest explanation yet: the Wii is simply more fun.

Fun. Now that’s something they don’t teach in MBA programs.

My friend made a powerful point, citing the Consumer Electronics Show in which Sony, Microsoft and Nintendo all made their competing announcements about their upcoming products. Sony and Microsoft spoke endlessly about power, speed, graphics, etc. Nintendo came forward and announced that the Wii was designed to be more fun. More social. More interactive. Just more fun.

That’s a great lesson for so many marketing categories. Appeal to the power of fundamental human emotions. Design products around these emotions from the ground up. Don’t rely on marketing to graft emotions onto the product. Toyota hit the mark with its “don’t you dare drive this to the dry cleaner” FJ Cruiser. And Carl’s Jr. has built its brand on unapologetically indulgent items like the Guacamole Bacon Six Dollar Burger or the new Strawberry Banana “Schmake” (aka, smoothie shake).

The brief for a designing a new product should begin with a single question: “How do we want people to feel?” With that answer we can design products and marketing that people actually want to experience and tell their friends about. But this may just be a pipe dream if we don't embrace research that gets at emotions rather than the rational feedback that focus groups and clinics tend to gather.

Monday, October 22, 2007

The day the music died...

Bob Dylan in a Cadillac commercial??

No way...could never happen. That would be as weird as Wilco selling Vdubs, right?

Saturday, October 20, 2007

TV detox (sort of...)

I’ve been conducting my own personal media experiment over the past several months. I’m going through TV detox. No traditional TV. No sitting on the couch and letting the warm glow of mass media wash over me. Instead I’ve been using more Web TV to get a first hand feel for whether this platform has potential.

True confession: I love TV. I love its connection to, and ability to shape, the pop culture zeitgeist. This is not the test of some new-media, TV-bashing fanatic.

The result? Like with all media platforms, online TV has its time and place. It cannot match the experience of watching TV on a Bravia in 5.1 surround. But I have been pleasantly surprised to discover how many of my favorite programs I can download or stream for free. I like the freedom of streaming 30 Rock while waiting out a delayed flight or getting my dose of Anderson Cooper 360 on my iPhone on the treadmill. I’ve also incorporated many more video podcasts into my viewing diet, such as Rocketboom.

So why should we care about this? From a marketing standpoint, online TV content has the potential to help marketers use the time-tested branding power of sight, sound and motion in a far more targeted and less-intrusive manner. Each network uses a different approach to sponsorship. I found the occasional commercial every 10 minutes or so from a single sponsor to not be overly bothersome in exchange for free content. And the ability to click over to learn more about the product finally delivers on the long-promised potential of interactive TV. (Perhaps, then, the best usage of this platform is for launching new products and not merely re-running existing commercials.)

Another reason we should care came to light this week in a new study published by the Conference Board. Its joint study with TNS reports that close to 16 percent of American households who use the Internet watch television programs online and that the number of consumers viewing full episodes online has doubled from a year ago. The study also reveals that watching TV programs has replaced news as the most widely viewed content online.

A second true confession: Those who know me well know that this test is suspended every Sunday while I watch the New York Giants. My commitment to the pursuit of knowledge has its limits you know…

Tuesday, October 16, 2007

The power of brand identity

I was driving this weekend near St Paul and noticed a highway sign with two gas station logos placed side-by-side. One was for BP, the other for Sinclair gas.

My first reaction was astonishment in realizing that Sinclair still exists -- in my head it's a brand that dates back to the Model T that perhaps had gone the way of its logo...which is a dinosaur. Apparently not.

Seeing both logos next to each other provided a great illustration of the power of brand identity systems. You cannot find two more opposite identities for the exact same product. BP is the color of sunshine and flowers, it's logo conjuring a green company. (After all, isn't the new BP "beyond petroleum"?) And Sinclair is a dinosaur, conjuring decaying fossils buried under dirt and rock transformed into the oil that drives our Hummers by millions of years of heat and pressure.

I've been a fan of the BP identity since its launch. They've executed a total brand makeover from the corner gas station on up. Though I would like to see more evidence of what it is doing to go "beyond petroleum." A flower logo can only fool us for so long.

I give kudos to Sinclair for its honesty and consistency. If you're happy being a petroleum brand, then a dinosaur logo is spot on target. (By the way, you won't believe this, but the dinosaur's name is "Dino." Go figure.)

Friday, October 12, 2007

File this under "C" (for creepy)

A recent article in Business Week features a way for marketers to live up to every suspicion consumers have about our profession. The emerging study of neuromarketing measures brain scans to see which promotional messages light up parts of the brain. Guess what? Some marketers are signing on.

Is this science accurate? (I'm being a tad generous calling this "science.") Perhaps. Should marketers be doing this? No! It's creepy and manipulative. Hey, while we're at it, why not hire roving bands of hypnotists to accost people in stores and get them to buy Corn Puffs?

At least now I finally understand how the Head On commercial was created.

Sounds like WikiBranding to me

Here's a excerpt from a study published this week at the annual conference of the Association of National Advertisers:

"Now, consumers not only talk back to marketers and interact with marketing messages, but they also reshape and distribute those messages through global communities," said Booz Allen principal Andrea Rasmussen. "The mix of media channels has shifted from a one-way broadcast model to a set of dynamic two-way media forums."

The study was co-sponsored by the ANA, the American Association of Advertising Agencies, the Interactive Advertising Bureau and consultancy Booz Allen Hamilton. Adweek has a good summary.

This is what WikiBranding is all about. It's the recognition that consumers are not only functioning as their own media programmers, but are now in charge of defining brand meaning and broadcasting to the world their version of the brand in ways never before available.

This requires marketers adopt a two-fold approach. First, invest in media and messages that help inspire true engagement with the brand. And, second, cede some control to customers and allow them to co-create and customize brand meaning in a manner that resonates with their interests and values.

Tuesday, October 9, 2007

The next big "_________"?

Is mobile marketing is the next big thing? Or is it the next big annoying intrusion?

That is the question.

The answer may come from Google. (Of course.)

There is an increasing amount of chatter about the so-called GPhone. It is reported to be in prototype stage and not likely to debut for at least another year.

Here's why this is interesting: It seems Google doesn't intend to innovate the handset like Apple did. Google has its sights set on reinventing the very business model that underpins the mobile phone market.

Recent news reports suggest Google intends to disrupt the category by introducing an advertising driven service - e.g., free calls in exchange for ads on your phone. Central to Google's strategy is its goal to create the software for a new open-source mobile operating system that will challenge Windows Mobile and, over time, wrest control from AT&T, T-Mobile, Verizon, et al over the software and services that can be installed on our cell phones. (Think about it...the current model is akin to HP or Dell restricting the applications you're allowed to install on your laptop.)

Can Google succeed against huge established players? (I don't know...let's Google "AOL" and see if that offers a clue.)

Will people tolerate ads to get better service for free? (I don't know... but perhaps some of the nearly 100 million folks on My Space and Facebook have an opinion on this.)

Here's what I do believe: Mobile is here. It's going to get smarter and bigger. Marketers cannot ignore it.

So what can marketers do in the meantime? At a minimum, design a mobile element into every every campaign -- e.g., a simple invitation in each ad -- "text 1234 to get the inside scoop." When you think about it, there's a strong likelihood that people have their phone by their side while reading a magazine, waiting at a bus shelter, having a beer in a bar, walking through an airport, listening to the radio and watching TV. Why not replace the obligatory website call to action with a mobile call to action? (Who by now does not know how to find a company online?) This simple adjustment has the power to turn off-line media into opt-in, interactive media.

Saturday, October 6, 2007

Did you know?

I saw this YouTube video yesterday in a meeting at UCI. "Did you know?" was designed as a wake up call to our education system. But it is also a sobering reality check for marketers. We are attempting to solve the unknown challenges of tomorrow with yesterday's tools and beliefs. True in education. True in business. Take a look.

Friday, October 5, 2007

Designing brands

Over the years I've become increasingly fascinated with the role of design as a business strategy -- not just a form of aesthetics. I think my epiphany happened when I was first exposed to companies like IDEO.

In my work with the Merage School of Business at UC Irvine I've been following the rise of so-called "D-Schools" that are competing with traditional MBA programs as a post-graduate destination for aspiring masters of industry. Witness the rise of these programs at MBA powerhouses such as Stanford and Northwestern. The revolution is on.

So why aren't all companies embracing design as a core business strategy? Because it is very difficult. It requires a CEO-down commitment to have design influence and guide every aspect of the brand...every single customer touch point. Yet Apple has found a way to do this. As have Nike and Target. This month's issue of Fast Company features a very good article on this topic. Yves Behar, the superstar designer, makes a fascinating point: "Design is how you treat your customers." I love that idea -- design is an experience.

Car companies are truly design companies at their core, yet they keep design in a distant silo within the company. Odd. I've worked with a range of automotive brands (Jaguar, Land Rover, Lincoln, Toyota). These companies live or die based on design. But they tend to limit their passion for design to the products. Apple, for example, is equally manic about its packaging and store environments. Apple recognizes that all these touchpoints help define the brand. Yet I have yet to find a car company that allows its designers to get involved in shaping the total brand experience. Imagine how much more powerful the marketing would be if the same designers who defined the car's essence, visual identity and personality were also involved in deciding key aspects of the customer's experience with the car -- its positioning, advertising, the website, the showroom display, the autoshow display, etc.

At BD'M we embrace design as a strategic medium through which brands can connect with customers. Design in marketing communications can form a visual vocabulary that speaks volumes to customers. This is not a new idea. Youth brands have known this for years. There is a big opportunity for clients to begin embracing design with the same appetite with which they embrace digital or viral marketing. Design is essential in today's consumer and media landscape.

Wednesday, October 3, 2007

Shamrocks and Urdu

I'm a Pakistani born son of Irish immigrants. I wonder what shoe Nike will design for me?

Why do I ponder this absurd idea? Because absurdity knows no bounds. Today's New York Times reports of the flak Nike is receiving over the shoe it designed for Native Americans. From a functional standpoint, Nike designed a special shoe tailored to the wider feet of many Native Americans. That's good. And we must give Nike props for investing the profits from this shoe back into its Let Me Play initiative on Native American lands. That's excellent. But perhaps Nike should have put its pencil down at that point. Because in addition to its Swoosh, Nike chose to adorn the Nike Air Native N7 with subtle cues of feathers and arrowheads. Bloggers are having a field day with this (my favorite coming from The Portland Mercury). So I will patiently await my Nikes decorated with shamrocks and "just do it" written in Urdu.

Tuesday, October 2, 2007

Free is good

Here's an experiment to watch. Radiohead has announced that it will launch its new album, "In Rainbows", exclusively online and will allow buyers to set the price for the download. Radiohead will offer two options: a fully loaded box set for 40-pounds or a pay-what-you-please download version for listeners who just want the music. A survey by music website Idolator.com suggest some folks will be willing to pay, but perhaps no more than 10% of the asking price. This is one of those moves that is either hugely bold or astonishingly silly. That's why it will be fascinating to watch. It'll give a clue to whether or not there is any pricing power left in the music business. It'll also give marketers in other categories a clue to whether consumers can be persuaded to pay for content that they can get for free through other channels.

In a related event, clearly influenced by Radiohead's new strategy, the Financial Times announced yesterday that it will stop charging readers for access to its website. Readers will now be able to get up to 30 stories per month at no charge. This follows a similar move by the New York Times and an anticipated announcement from the WSJ.com. (Clearly all three have just caught onto to digg.com)

What do both events have in common? People like free stuff. Duh.

Can a name-your-price Ford Focus be far behind?