Tuesday, April 29, 2008

Introducing the washing machine of TVs

Today's Wall Street Journal quotes the vice president of brand marketing for LG Electronics as saying, "If you go to Best Buy, you can't tell the difference between any of the TVs; even to me, I cannot tell which is LG. They all look the same." (I doubt that was on the list of talking points prepared by his PR team, but I respect his candor.)

Why do the major TV set makers allow this steady commoditization of their business to continue?

Sony Electronics was a client of mine several years ago. Sony Wega TVs (pronounced, oddly enough, "vega") were the industry benchmark because they were based on an innovative and proprietary picture technology that offered customers a clear reason to pay more. (This built on a heritage of picture quality that started with the Sony Trinitron.) Sony's minimalist silver boxes also set a new design standard with a look that has now become common.

But much has changed over the years. Low price offerings from LG, Samsung and Vizio have created a war at retail. Consumers wait to buy the latest and greatest at steep discounts.

I think there are two sources these companies can turn to for inspiration to find a way out of this price-driven mess -- i.e. Apple and, ironically, LG appliances.

Apple can charge a premium for its laptops for reasons that are well known: their design stands apart from the sea of sameness and, importantly, because they work better (i.e., simpler, more intuitive).

Several years back LG challenged the commoditization of the appliance category with washers and dryers that brought curvaceous design and bold colors to a category that only knew white boxes. LG also brought forward useful new features such as steam cleaning. (As Best Buy's agency for its home appliance business, the team at BD'M has seen first hand how this approach to design has elevated these "boxes" to become true objects of desire.)

In both cases these marketers challenged and beat a commoditized market by using design as a business strategy. And both managed to charge a premium by doing so.

The average person may not pay 10% more for a 10% improvement in picture quality. But they are more likely to pay more for fresh design that showcases their discerning sense of style and brings a small bit of joy to everyday activities.

Tuesday, April 22, 2008

Happy Earth Day

To mark Earth Day I thought I'd give some props to our partners at Applied Materials.

Applied is the global leader in nanomanufacturing technology (literally the manufacture of structures on an atom-by-atom basis). The solutions it provides its customers are responsible for the production of virtually every new semiconductor chip and LCD flat panel display. The same nanomanufacturing processes used in these fields are now being applied to the manufacture of solar panels and energy efficient glass.

Applied's stated mission is to help create a cleaner, brighter future. It's hard to not like working with them. Here's a glimpse of some recent work we've created with them.

Monday, April 21, 2008

Should you innovate during a recession?

That's the question that seems to be popping up in business media.

What a silly question. Yes we should. Customer, marketplace and competitive dynamics are moving too fast to make standing still anything less than a corporate death-wish. The recent issue of Business Week got the story right.

Great brands project a sense of infectious momentum that comes from continuous improvement and innovation. Innovation does not have to be whiz-bang, bet-the-ranch new products like a Wii or an iPhone. Innovation can take the form of small, but meaningful, improvements in the customer experience, such as Target's color-coded pharmacy bottles. It can be the result of continuous improvements in the customer experience as practiced by Google, Amazon and Toyota. (Toyota, while credited for the market-changing Prius, more often than not wins by innovating new business processes that improve its ability to meet customer wants and needs.) Or it can take the form of a smart cross-promotion, such at Tide with Febreze fabric softener.

Not investing in ongoing innovation is a recipe for failure. Think Sony Walkman. Or Ford Taurus. Or Motorola Razr.

From my collaboration with the Merage School of Business, which focuses its program on sustainable growth through strategic innovation, I've grown to believe that effective marketing innovations share these traits:
  1. They solve real customer needs. The demand, whether articulated by the customer or not, already exists.
  2. They are based on rigorous analytics and not blue sky brainstorming sessions. There must be an underlying business case to set the direction for truly fresh thinking. (Norman Berry, the creative head of Ogilvy when I joined years ago, used to say "Give me the freedom of a tightly defined strategy." How true.)
  3. They are inspired by truly creative and anthropological research. Customers can't tell you what's missing in their world. True innovation is inspired by authentic human insights.
  4. They often mesh disparate insights or trends into a single new idea. Running + Music = Nike Plus. Latchkey kids + Microwaves = Hot Pockets. Trend toward self-expression + small cars = Scion. The "we" generation + the web = MySpace.
  5. They are sustainable ideas and not one-off diversions that sap resources and focus. They have the ability to scale to something big and lasting.
  6. From an internal perspective, innovation is born within collaborative and multidisciplinary teams, executed with speed and efficiency. Markets are extremely complex and windows of opportunity tend to be short-lived.
  7. And, importantly, innovation demands the backing and the courage of the CEO. Corporate corridors are lined with idea-killers. The folks with the guts and stamina to innovate new ideas could use a little air cover.

Wednesday, April 16, 2008

Technology is the new car

My recent post about plug-in luxury got me thinking about the role of technology in our lives. And it hit me -- technology brands are the new car.

Throughout the last century the automobile stood for freedom, mobility and joy. Hitting the open road expanded our horizons and put a bigger world within our reach. Cars represented modern life at its best. But that was then.

Cars lost this sense of child-like wonder as they grappled with grown-up issues such as safety, fuel economy and global warming.

Today it is technology that defines modern life. Technology liberates. It connects. Each new smart phone, wafer-thin laptop or lifelike home theater system joyfully proclaims that today is better than yesterday. Technology brands are the new car.

I wonder what would happen if a car company decided to behave as a technology brand. Not just loading up cars with whiz-bang tech features. But to truly embrace (or re-embrace) the sense of joy and liberation and optimism that we seek in our lives and tend to get from our gadgets.

Monday, April 14, 2008

How many USPs can you fit in a Buick?

I was pondering this question while reading a recent Buick print ad.

The headline declares that Buick is "the craft of modern luxury."

The themeline declares that a Buick enables you to "drive beautiful."

And the space between these two ideas is filled with yet another idea -- "QuietTuning."

If you ask me, quiet seems to me to be the differentiating brand idea -- Buick provides the luxury of silence. Words like modern and beautiful are simply marketing blather.

This ad illustrates the need for marketers to embrace relevant and unique selling propositions and not try to be all things to all people. It also illustrates the need to stop creating advertising by committee.

Friday, April 11, 2008

Plug-in luxury

Labeling a brand as a "luxury" product is too generic and narrow. True luxury brands have a specific point of view on the type of luxury they provide. Laid back and casual? Old world pedigree? Exclusive and indulgent? Modern and savvy?

Hyatt is not a luxury brand by any traditional definition. But I was extremely impressed on a recent stay in the chain's Hyatt Place brand by their choice to feature a "Plug Panel" that enables guests to connect their laptop, iPod or digital camera to the 42" flat-panel TV.

This tech concierge is a form of luxury. It makes the stay more comfortable and personal. It also shows keen customer insight and thoughtfulness.

The car companies are increasingly using technology as a form of luxury. Lexus has been on the leading edge of this for years. And, finally, marques like Jaguar (a past client) are using technology instead of wood and leather as a way to convey a premium brand image. Check out Jag's new XF to witness what I mean.

Airlines are following suit. United Airlines, a client of BD'M, is rolling out a brand new international first and business class service featuring widescreen TVs and ports for iPods.

Technology was meant to boost productivity and offer convenience. But for most of us our personal technologies offer escape, relaxation and a way to express ourselves. This is plug-in luxury.

Wednesday, April 2, 2008

Damn right the website's fun

PS: I went to Canadian Club's website and used the app they've created to let people customize their own "damn right" ads. Here's my Dad with his life-long groupie.

Damn right it sells.

I've been a fan of Canadian Club's "damn right" campaign from my first sighting. It's audacious and completely counter-intuitive. Selling an out-of-date brand to younger customers is not easy. So I was really glad to read the Ad Age article reporting that the campaign is increasing sales and reversing years of downward spiral.

The insight is so simple: you're dad was a lot like you my friend, going out, pounding drinks and looking to score. But he did it with style. The line is perfect -- "Damn right your dad drank it."

It's always good to see a client rewarded for embracing a bold idea. Kudos to BBDO and the brand managers at Canadian Club.