May 29, 2012#

Warning to Facebook: Tread Slowly with Advertisers

Much has been made of General Motor’s decision to discontinue advertising on Facebook (just days before it went public), citing poor ROI.  It also didn’t get what it wanted:  GM’s request to run bigger, higher impact ad units, including taking over an entire page, was politely, though firmly, rejected by Facebook.
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November 20, 2011#

What Does Sony Stand For?

Sony is on the ropes.  According to Business Week, the company is predicting a $1.2 loss this fiscal year, and its share price is at a 24 year low.
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May 29, 2011#

The Word According to Groupon

A few months ago, I postulated that Groupon, while good for consumers, may not be good for brands.

Whether that turns out to be so,  Groupon certainly appears to know how to build its own brand.

With a business model that’s relatively easy to replicate—literally hundreds of competitors have jumped into the space in the past year, including non other than Glen Beck,  Groupon is determined not to be a mere coupon distributer or promoter of  “cheap pizza or sushi for everyone who wants to hire it.”

As reported in the New York Times, Groupon’s aim is more lofty than that:  to be “perceived as in impartial guide to a city or a neighborhood, somewhat in the manner of the local paper’s weekend section.”  To achieve this worthy goal, Groupon has hired over 400 writers, and editors, who bring stories, texture and humor to their clients offers.

This is an important and smart positioning, and one that I suspect will serve Groupon well, as it faces the swarm of competitors looking to steal a piece of its enormous honey comb.

January 20, 2011#
November 5, 2010#

The Micro-Script Rules — A Review

Like a child with a strange, shiny new toy, today’s marketers are simultaneously besotted and confused by new media.  Unfortunately, in their quest for digital nirvana they all too often take Marshall McLuhan’s famously coined phrase about the medium being the message to an unhealthy extreme, largely forgetting that the message is still a critical component of the message.

One of my business partners, Bill Schley, reminds us that the message, pure and simple, delivered with words, still matters . . . a lot.  Largely because this is how we have always communicated with one and other, and always will.  Inundated by an onslaught of media coming from every imaginable direction,  consumers are increasingly weary of companies and their sales pitches.   Consequently, they increasingly turning to friends and family and like-minded communities for guidance on what’s best to buy.
That’s where The Micro-Script Rules comes in.  The book provides an easy step-by-step guide on how to distill selling messages down to their most important and relevant essence, then put them into neat, little word packages that are not only easy to remember, but most important of all, are easy to repeat, because PEOPLE WILL WANT TO REPEAT THEM.   He has taken the oldest marketing tool in history, viral marketing, and retooled it for today’s time and attention stressed environment.  This books can help ANYONE communicate better by empowering others to convey your message for you.
May 31, 2010#

Zappos Founder Speaks About the Importance of Brand Focus

Tony Hsieh, Zappos’ founder and CEO, truly understands and values the power of focus.  He also knows that a business needs to stand for something important in the minds of customers and employees alike if it’s to flourish,  and that this sometimes requires giving things up – especially those things that are not consistent and supportive of the company vision, purpose and positioning.    

Here are Mr. Hsieh’s own inspiring words on the subject from an interview in the May 31- June 6 issue of Bloomberg Businessweek.

“We asked ourselves what we wanted the company to stand for.  We didn’t want to sell just shoes.  I wasn’t even into shoes—I used to wear a pair with holes in them—but I was passionate about customer service.  I wanted us to have a whole company built around it, and we couldn’t control the customer experience when a quarter of the inventory was out of control.

“We knew we had to stop doing drop shipping.  It was as if it were a drug.  Over the long term, it was critical that we were handling the merchandise ourselves.  This was the toughest decision I’ve had to make.  We couldn’t build a brand around customer service if we couldn’t deliver it.  When we had the goods in our control, we were able to do so much more.

“Once we made that decision, all the other decisions became easy.  We had already given up a lot, but we knew what we stood for at that point, and our employees could see that we were serious about this.  That made all the difference.”

November 12, 2009#

Smirnov–The First Great Modern Marketer

As a marketer, what interested me most about Linda Himelstein’s excellent new biography (The King of Vodka) about famed vodka distiller, bottler and seller, Pyotr Smirnov, was discovering the man as a truly visionary marketing pioneer.

Moscow, Russia and even Europe in the early 1870’s was awash in a sea of vodka distillers.   To succeed in this overcrowded, highly competitive market, Smirnov needed to figure out how to stand out.  His goal was to convince Russian peasants and nobility alike that his vodka had the smoothest taste and best quality.  Although his vodka wasn’t necessarily better than some of his main competitors, he understood that perception was as important, if not more so, than reality.  

Here’s what he did

He hired “peasant” men to visit taverns across Moscow, and eventually outside the city, to ask specifically for Smirnov.  If the tavern didn’t stock Smirnov, they were instructed to demand it the next time they visited.  They were also told to talk to other people in the bar about the high quality of Smirnov.  Smirnov knew that the best way to build awareness of his brand of vodka and generate demand was to have neighbors hear praise about Smirnov from other drinkers.  (Of course, we know this now well honed marketing technique today as “viral marketing).

He paid his employees well, far better than others in the industry, and treated them with respect, even paying for the education of the children of less fortunate workers.  As a consequence, his employees were proud of their Smirnov affiliation and boasted to friends and family about the company and its products.  (Today, we know that the first step to effective branding is to have employees be “brand ambassadors” themselves—that branding works best from the inside out).

He contributed generously to charities to endear his brand with the common people.
(Today, we know this as “social responsibility,” something all major corporations are engaged in to help advance their images beyond that of simply money making enterprises).

He recognized the value of  “objective,” independent associations as endorsers of the quality and value of his products.   He managed to become a merchant of the First Guild, the highest merchant ranking in Russia, associated with the upper echelons of society. He also managed, though it wasn’t easy, to secure the state emblem, the highest stamp of quality in the land, endorsed by the monarchy itself.    (Today we call these “third party endorsements,” like the Good House Keeping Seal of Approval).

He recognized the power of packaging to distinguish his brand, from legitimate competitors and counterfeiters (back then there were no laws protecting copyrights and trademarks).   His labels had two state coats of arms, received in 1877 and 1882 at the All-Russian Artistic-Industrial Exhibition in Moscow, and corks printed with the Smirnov logo and the State coast of arms.  

And he invested heavily in information rich advertising, running a series of infomercial-like ads, announcing store locations, different products, Smirnov’s industry track record, and the superior quality of his products.  He seemed to recognize that more information garnered more trust.  (If he were alive today, he would no  doubt be disseminating, and receiving from his customers, information about his brand interactively).




November 9, 2009#

India’s uber brands

An intersting feature of the Indian market is the large number of brands that have succesfully crossed un-related customer categories. Some examples

Reliance: Oil and gas, wireless, retail, etc

Godrej: Appliances, personal care, security equipment, etc

Tata: Auto, tea, wireless, etc

Religare: Financial services, healthcare, travel

Kingfisher: Beer, airline

These brands are able to convince customers that they are equally capabable of making tea and cars or refrigerators and deodarant. How did they get customer’s to trust them across such diverse seemingly unrelated categories?

Maybe it reflects the importance that family plays in all aspect of one’s life. So it stands to reason that consumers will trust a brand family across a wide range of activities. Maybe it is a result of the weak retail distribution system that is unduly influenced by a few large companies.

Whatever the reason it creates interesting brand challenges. How do you create meaningful and differentiating brand ideas that cross so many categories without becoming too soft and “airy”, as some have become. It is important for Indian companies to figure this out. They have global ambitions and other socities maynot be as favorable to multi-category brands. And the Indian consumer is changing- the role of the family is weakening and the retail market will get stronger, offering customers more choices in every category.

The evolvement of these brands will be intersting to follow.

June 29, 2009#

Brands get focus from knowing what they are best at.

Striving to be best at something that is important and relevant is a great focuser . It not only helps position that brand clearly, it also acts as a filter for the actions the brand takes.  This is true if the brand is a product, a company or even a political campaign. Barack Obama won the election because he convinced voters he was the best at bringing about the change that matters most to the middle class and if he governs with that focus,  he will continue to be successful. But many brands forget this and  expanding or becoming bigger become their focus.

A recent article in Fortune about Sony (Sony: Lost in transformation) is a great example of how great brands can loose a sense of what they are best at and start to flounder. If you are as old as I am, you remember when Sony was the best at making products that delivered the truest picture or sound. Products like Trintron or Walkman followed from this focus. Then came entries into music and films and it started to dilute what Sony was best at. This lack of focus prevented them from nurturing the first reader and loosing that market to Amazon’s Kindle. Their new goal is to be the best at seamlessly connecting content and delivery systems. It remains to be seen if this is just a rationale for the businesses they own or it will lead Sony to once again being the best at something that customers find important and relevant.

Economic upheaval is difficult on most organizations but it severely punishes brands that don’t know what they are best at. It exposes how growth and size became the focus rather than the byproducts of focus . Those that will emerge stronger will have used this crisis to find what they are best at and refocused their brands.

May 19, 2009#

A Cup of Coffee is Not Just A Cup of Coffee

The Times reported today the launch of a new ad campaign for Starbucks.  The campaign focuses on the superiority of their coffee.  Simple text print ads carry headline messages like:

·      Who would taste 250,000 cups of coffee just to ensure the quality of one?

·      There’s only one place to get a cup of coffee as good as Starbucks.  STARBUCKS.

·      Starbucks or nothing.  Because compromise leaves a really bad aftertaste.

·      We think making coffee is an art form.  They think it’s a new revenue stream. 

We believe Starbucks is smart to overtly reassert its rightful position as a superior cup of coffee.

Of course, some would disagree.  There are those who think that what distinguishes Starbucks from other, less expensive competitors, now including McDonald’s—with its new popular McCafe offering—has more to do with the environmental experience in the store than with simply a great cup of coffee.   Indeed, Starbucks knows that the in-store experience is important to customers, and a relevant competitive advantage.  In fact, the company has referred internally to their stores as The Third Place: home is first, work is second, and Starbucks is third.  The Third Place is an oasis from the outside world where people find music, internet access, romance, relationships, conversation, even spirituality.

All  true.  At least for some. Particularly Generation Y.   But when competition is challenging the core of what you stand for—the best cup of coffee—you need to stand tall and defend it.  If competition succeeds at convincing consumers that their cup of coffee is just as good as Starbucks, and, oh by the way, less expensive too, Starbucks will soon become consumers’ Last Place.