Feb 4, 2010 | Branding, Change, Leadership, Marketing
The corporate left brain/right brain conflict is alive and well in Jetstar.
Currently Jetstar is spending on TV advertising their Asian destinations, pushing that they are not just a cut price airline, at the same time they are facing a PR debacle, having left passengers in Penang airport for several days due to mechanical problems with an aircraft. (perhaps they should change their advertising; “an extra 4 days at your expense” not a great idea?)
Gail Kelly at Westpac got it horribly wrong a few weeks before Christmas, raising the banks home mortgage rate beyond the increase in the prime rate, how many advertising dollars did that send down the crapper? Anyone who actually thought about the pricing challenge from a customer perspective would have predicted such an outcome, that the mistake was made by the former CEO of St George whose culture was all about customer care is inexplicable. Even the vaunted Toyota is struggling with a recall in the US of 9 million cars with sticking accelerators, not a good addition to their market positioning.
The list of companies that sacrifice their long term position to get out of a hole in a crises goes on, and on. The corporate “numbers groupthink” takes over, no-one states the obvious, but uncomfortable truth that the P&L needs to take a short term hit for the benefit of the long term.
Very occasionally, someone does it right. The classic is J&J’s recall of Tylenol in 1982, and subsequent leadership in introducing tamper evident packaging. Short term cost was huge, but the long term position was enhanced enormously. Arnotts in Australia had a similar experience in 1993, and came out of it smelling like roses.
Why do most businesses continue to make the same mistake when faced with a crisis, a short term focused response?
My conclusion is that the power of the short term performance metrics overwhelms common sense, and the only antidote to this long term poison is to build a culture that genuinely sees customers as central to the reason for the business existing, and only by serving customers can commercial sustainability be achieved. This commitment to long term customer value needs to be a part of the culture, as fundamental to an organisations shape and actions as DNA.
Feb 1, 2010 | Branding, Marketing, Sales
Most products have a range of alternatives that the buyer can purchase and use in relative certainty that it will deliver pretty much as promised.
Consumers when in a supermarket have a basket of products in a category they buy, usually with a first and second choice, and sometimes a third choice. On any trip to the supermarket, the purchase decision is made at POS based on a whole range of factors, of which price is only one.
Our task as FMCG brand marketers is to find the means to reduce the importance of price in the purchase decision, in an environment where the supermarket is hell bent on convincing us that price is the only factor that matters, and they have all the power of the channel at their disposal.
The power of data mining techniques that have evolved in the last decade is stunning, but they do not remove the basic dilemma for FMCG marketers, who must find the balance between price, stock velocity, retail margin, and brand building that has to be funded from their margins and long term returns, and which carries substantial risk.
Only building a brand that consumers have as their first choice in the basket of acceptable choices, where price sensitivity is less than the category norm will offer longevity, the rest just contributes to retailer profitability at the expense of the supplier margin.
Jan 27, 2010 | Branding, Innovation, Marketing
Product development is most often a process that in its early stages is dominated by technical considerations after the initial idea is articulated. It is about the dimensions, performance characteristics, functionality, features, technology platform, and so on. Typically the product brief will cover all these aspects, and more, but it will not be enough for the designer responsible for the way in which the products interact with the consumer, and therefore does little for the development of your brand.
At some point, you need to reflect the behavior of consumers as they use the product, the level of engagement it attracts, the way they interact with the features, the situation in which it will be used, what else is likely to be going on around them concurrent with use, the way it needs to look and feel, and many, often qualitative aspects.
It is a common mistake to put a lot of effort into the product brief, but less into the design brief, thus ignoring the most important factor in the whole exercise, the consumer.
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Jan 11, 2010 | Branding, Marketing
A brand is the expression of consumers equity in a product offering. This offering is a mix of tangible and intangible factors, a bundle of benefits, each being inter-related to the others in ways that may vary depending on the differing consumers.
Brand strength = Differentiation x Relevance of the differentiation.
If you apply this formula, it may help in the difficult task of making the choices relating to which customers, which channels, which media approach, which opportunity to follow, which brand to invest more in, and so on.
It may also help to add some numbers to the often qualitiative marketing strategy dicussions, so the CFO can understand what you are doing, and why you are doing it. This is normally useful in a corproate environment.
Jan 6, 2010 | Branding, Marketing
Ironic isn’t it, Tiger Woods has had his squeeky clean image trashed, and in the process has dropped hundreds of millions in endorsements, but his profile has never been higher. Gossip columns, serious discussion in the business pages, piles of stuff on the net from academic analysis to jokes (some pretty funny), surely there are those out there whose products do not depend on the endorsement of the moral right.
The bloke might have his brains wired to the wrong spot, but he is a seriously great athlete, a cross-racial/cultural icon, and he commands attention, what do you want in a spokesman?.
If I was trying to build a brand of mens grooming product, a mid price muscle car, rugged menswear, and several others, I would be getting out my cheque-book while the price was down, and the exposure was up, (‘scuse the pun)
The communication options to be leveraged are terrific, advertising is almost sure to go viral, and I can almost see it, although it may not do a lot for Tiger’s stated aspiration of saving his marriage, although the chances of that would have to be pretty thin, and I suspect of value only to the spin doctors.
