Posted: January 27, 2009
I caught an interesting piece in Marketing Week last week by Paul Benady. He was reflecting on the current struggle between retailers and fmcg brands for control of consumers’ purses. He made a number of good points and clearly highlighted the need for us all to get a grip of the relationship between our brands and the lives of consumers.
This isn’t really a struggle between retail brands and fmcg brands. Its just the usual struggle between marketers and a test of how well they work with the resources they have. In other words, how well they do their job. Sure the big supermarket brands (not necessarily their businesses) are in good shape these days and the odds are in their favor because of this. Yes they are close to consumers minds and could levage this advantage easily, but its by no means a done deal. As Benady says there is a great deal of value in the fmcg brands – tradition, reassurance, longevity, reliability and quality. It would be ill-advised for them to pitch into the price-point battle, but I believe they have what it takes to win the war, if only they focus.
The danger, as usual, is that marketers may not see the wood for the trees. There are rational and emotional elements to any brand relationship and marketers need to understand these and define clearly in their own minds which are which. The two questions I ask brand guardians is
- Do your rational arguments strengthen your emotional relationship with your customer?
- Is your tactical activity reinforcing your strategic message?
Whilst it sounds logical, I see all kinds of brands where the rational argument is out of kilter with the emotional aspects of the relationship and I suspect that in an attempt to apese the price sensitivity of consumers over the next few months we’ll see a few brands throw the baby out with the bathwater in clumsy attempts to raise the price element in their value equation.
There’s also a good chance, because it happens too frequently anyway, that in an effort to protect what they see as their brand values some fmcg marketers will lose the message by wrapping it up in creative cotton wool. This is no time to be shy. If your point is valid and in line with your brand message, make it straight, not obliquely. Its a chance for real smart creatives to show what they can do to reinforce the message.
Taking a swingometer view of things my feeling is that we’ll see a sharp swing towards price over the coming weeks and months, followed by an adjustment back towards quality that will result in a new value optimum. Of course, this is where the supermarket brands are aiming with their presitge sub-brands, so to some extent they are already there, but they have arrived from the direction of price whereas most fmcg producers who venture there will be coming at it from the quality end of the scale, so there’s a clear difference and a variety of opportunities there.
The other decider will be how flexible manufacturers can be. One of the great strengths of retailers has always been their ability to respond quickly. Of course, everyone should have seen this coming way back, so hopefully it won’t be a factor, but it will be interesting to see, over the next few months, who can deliver timely solutions that customers will respond to and that are consistent with and will leverage their established brand values.
As I have said many times over the last few months – “Interesting times”.
Posted: January 20, 2009
On inauguration day I caught an article by the political correspondent Dr Louis Perron that reflected on the campaign that had brought Barack Obama to the Whitehouse. I agree pretty much with all that he says, but as a marketer, I put a different slant on these things.
Firstly, I have to say that despite the hundreds of millions of dollars invested, the hundreds of thousands of people who have contributed and the miles he has travelled on the campaign trail I believe, and I am sure that he would agree, Barack Obama has achieved no more than a place on the starting grid. To quote the man himself “Greatness is never a gift, it must be earned”. As with the many organisations I come across, that believe it’s enough to make the right promise, and don’t really know and sometimes don’t care if, or how, they will deliver, the real job, that of delivering, remains to be done. It is his and their achievements in this respect, that will ultimately determine greatness or failure.
Dr Perron is right. The big difference between Obama’s campaign and the many that we have seen before in the US and elsewhere is that he had a plan. I know that most candidates and pretty well every business would say that they have a plan, but all too often they don’t bear close scrutiny. Dr Perron points out that within the Obama campaign there were clearly defined sub-campaigns each aimed at answering a specific question or issue that had been defined, by a process of exhaustive research and analysis, as hot topics. He certainly had some awesome brainpower behind him and if for nothing else, this campaign will go down in history as that which made the greatest and most effective use of data and electronic media.
The smart thing about these sub-campaigns is that their messages combined to create or support (depending on your viewpoint) an overarching proposition or promise – the main campaign theme, achieving tremendous synergy in the process, simply because they were single-minded and delivered unerringly. The relative strength of these supporting messages within the overall theme could be adjusted according to place and time, but they were always there. The campaign may have cost billions, but every cent has found a target and been accounted for and that’s what has made it a success. Even the big bucks were squeezed. Obama punched above even his weight and that’s half the integrated marketing story.
Any business, of any scale, can do the same . No, scrub that … EVERY organisation MUST do the same. There just isn’t a choice any longer. The good news is that your organisation is probably wasting such a large proportion of its marketing investment that pretty well anything you do to improve your integration, will produce a result. All you need is a plan.
The other half of integrated marketing is the part that few organisations recognise and even fewer place enough effort behind. The facts are that most organisations will achieve a disproportionately high return on investment that is diverted from external to internal marketing. Despite its neglect this is probably the most important element of any campaign because its what ensures that you deliver your promise. Obama’s and your success will be a product of internal marketing that seamlessly takes the messages of the sub-campaigns and the overall promise inside your organisation, advising and educating your employees and getting them totally behind the promise and totally committed to playing their role in its delivery. If the new President is as smart as his game-plan so far would suggest, we’ll see a level of consistency across all facets of his office and between every one of his team that hasn’t been seen before. And that’s what will ensure he delivers.
The guys in your boardroom, just like Obama, can’t physically do everything themselves, so its vital that the doers, those who face customers or electorate, negotiate with suppliers, distributors and partners and those who create the products and services you provide and get them to the people who need them, are all as clear and committed as the directors are to delivering the promise. Get that right and you too will earn greatness.
Posted: January 19, 2009
I don’t think anybody would argue that countries are not brands. In fact they could be the ultimate brands. So, as the Czech Republic enters its fourth week in the Presidency of the EU, its interesting to see the many illustrations it has already provided of the challenges of brand development.
The EU presidency is a fantastic opportunity for a nation to demonstrate the calibre of their politicians and earn respect on the world political stage, but the outgoing French President Sarkosy is a tough act to follow and there are those who feel that the Czechs won’t hack it. Should they fail however, it won’t just be bad for them, it’ll be bad for Europe and it will damage the credibility of other Eastern Block countries too.
Hampered by a national President who is an extreme Euro-sceptic, which for some onlookers is enough to render Chechia an unsuitable candidate for the presidency anyway, Prime Minister Topolanek has already made what was described on a BBC Euro News show as “a shaky start” when one of his ministers came down loudly on the side of the Israelis on the Gaza Strip issue and another described the Russian/Ukrainian gas debacle as “just a commercial dispute”. Then he announced that he had solved the gas dispute with an agreement that turned to sand before he got off the plane on his return to Prague. Finally the PM proclaimed that he had revived it. Almost a week later, guess what? There was still no gas and Slovakia and Bulgaria had lost patience and were already having independent talks.
To add to their woes Czech artist, David Cerny (pronounced Cherny) was commissioned to produce a mural to be hung in the European Commission’s building in Brussells to commemorate the Czech EU Presidency. The result was passed-off by Cerny as a composite of works by artists from the 27 Euro countries each representing their own nation. He even provided the names of the artists concerned. This turned out to be a hoax, when, at the unveiling the representatives of two countries – Hungary, which had been represented on the piece as a lavatory and Germany, which was shown with a swastika, went into spasm!
Amidst the flurry of diplomatic toys being thrown out of prams across Europe Mr Cerny fessed up to having taken three hundred and eighty thousand pounds from the Czech government and then knocking up the “work” single handed in his garage (well, almost!).
You might consider that the politic thing for Topolanek to have done at this point would be to apologise to all concerned, taken back the money and hauled Mr Cerny onto Wenceslas Square to be stoned to death by the ten-million-odd Czechs who he had shamed. Instead the Czech government embarked on a campaign to justify the piece, claiming that it’s a joke by a renown artists, famous for his pranks and that the rest of Europe should get a sense of humor! Shaky start? Well I’ve seen better, but its early days and there’s a steep learning curve involved here. There’s still time for the Czech Republic to turn this around and make their appointment a stroke of genius for Europe, a helping hand for the old iron curtian countries and a triumph for the Czech people.
Anyway, what has this to do with brand development? Well brands are communities, just like countries and the way they are viewed by outsiders is determined by their words and actions. This extends to the company they keep, which as we will see, doesn’t augur well for other former Eastern Block countries.
Nations elect politicians, in part, to represent their views and values to the outside world, while commercial organisations choose the Chairmen that they do and brands agonise over the choice of celebrities who they appoint as spokespeople. In this case outsiders take Topolanek’s performance as illustrative of Czech people. I can’t help thinking that, were he a celebrity representing a brand, he’d be dodging lawsuits and on the dole by now!
While we’ve yet to see how well the Czechs leverage this opportunity, consider how their performance so far has affected the former Eastern Block countries who are desperately trying to persuade the rest of the developed world that they are their equal. Czechs had maybe made some ground in presenting themselves as the most Western orientated of the former Eastern Block, so you could excuse the rest of these countries for feeling they had a stake in Topolanek’s performance. If he doesn’t raise his game a bit quick he could blow the brand strategies of all these other countries out of the water.
Consider too how the Presidency is making the EU look to countries outside of the EU. My guess right now is that there are a few doing what the Czech President Klaus has been famously doing for a while, trying to get a green-card!
The need for consistency of message shouldn’t be underestimated by anybody in the brand-building game – that’s not just consistent across all communications routes, but consistent with your positioning. Neither should the influence that the company you keep will have on the perceptions others have of you. Just as the things Czechs do now that they are representing Europe will reflect on the reputation of the EC, a rogue distributor will have a detrimental effect on a manufacturer’s brand. Likewise, the products that are alongside yours on the retailer’s shelves will colour consumers’ perceptions of you in the same way that other Central and Eastern European countries will be affected by Czech actions and behaviour.
So next time you are formulating a brand strategy, devote a little time to defining the kind of partners, suppliers, distributors etc. you want, because they will influence your success in subtle ways. As the owner of the highly successful Prague Marathon explained, because the Prague International Marathon is a world leader in their sector, they will only take on partners who are leaders in theirs. But then, he’s Italian!
By the way: You can get a full and accurate picture of the antics of Czech politicians and more at www.praguemonitor.com
Posted: January 19, 2009
The common dilemma of on-line publishers has always been whether they should derive revenue from subscriptions or advertising. The choice for most has been the arguably simpler advertising route. But times have changed and some at least are being forced to question that wisdom. Is it too late?
Early in the on-line publishing revolution proponents appear to have developed a consensus that said it wasn’t possible to have a model that generated revenues from both subscriptions and advertising. Its easy to see how they arrived at that decision, the criteria for ad. sales is, after all, site traffic, but traffic is limited when payment is required for access.
However, with advertising revenues falling and costs escalating, more than a few publishers are wishing they could go back and start again. Readers are happy of course, and its a brave and optimistic man who will hang his reputation on persuading them to pay for what they already have for free. Besides, while free access, will broaden your visitor profile, advertisers expect tight targeting and to some extent that’s what the web is all about. So, is there another solution?
Maybe its time to change the way we view publishing? That’s all types on-line and off. Last year I was involved with a number of publishers who were all, internally at least, questioning their traditional understanding of the business they were in. All healthy stuff.
To me, publications have always represented the epitome of a brand. I have said many times in this blog and elsewhere that brands are communities, held together by common interests, beliefs and values and publications, especially specialist press, are just that.
Mature operators in other sectors have come to recognise that selling anything is a whole lot simpler and requires far less investment if everyone you approach shares the same perspective. That’s why brand development is so important. The problem for publishers is that so few of them have leveraged their communities as, say an fmcg brand might do. Basically, they have set up a really great store, but it has a very limited offer. My belief is that now is the time for publishers to recognise that their business isn’t necessarily publishing, but that this is merely the means they have to gather an audience to whom they can make revenue-generating offers of pretty well any products and services that might appeal to their community members.
I’m not the only person who is thinking this way. One of the UK’s biggest publishers (it wouldn’t be fair for me to say who) are developing a new strategy on this basis already and others are certainly discussing it. I am working with another right now whose future clearly lies in diversification. Of course, there is always the danger that diversification stretches resources and distracts managers from their core business, but we are developing a model that overcomes that and I can see a number of alternative routes to the same objective.
You don’t need me to tell you that times are hard and they’ll get tougher yet. If your business is struggling now you are likely to be among the millions of victims of the economic downturn, so what better time (I guess you could have done it already) to take a radical look at your business model.
There’s a silver lining in every cloud and if a publisher sees their future in owning interests in diversified businesses that could be fed by his community, there are a whole lot of struggling businesses with great products who are open to a very favourable deal right now. And, once you get your corporate head around the paradigm shift, a switch like this isn’t that difficult to bring about, and it can happen very quickly.
I realise, that there are publishers who have so far been able to perfect that balancing act between subscriptions and advertising. The result is usually a really great, tightly defined and high value community that advertisers prize. But it is a balancing act that’s going to get tough to carry off and this doesn’t exclude these publishers from the opportunity. In fact, it could be even more lucrative when starting from a base as stable as theirs. Worth a thought I think.
Posted: January 15, 2009
Barely was the metaphorical ink dry on my piece about businesses in Central Europe struggling to remain viable in the vital international marketplace, when I caught this pod-cast by Phil Dobbie a Brit exiled in Oz, who I don’t know and who is not related to me, but who I find, talks a lot of sense.
Although its a far more mature market, Australia shares one critical trait with some of the emerging new Central European markets – they don’t have a lot of people! As Phil and his panel of experts agree in this broadcast, no business in any country can afford to focus exclusively on their domestic customers and when your population is fifteen million or less, if you do so you don’t have much scope.
They recognise that smaller economies have tended to exacerbate their problems by making it difficult for foreign experts to operate and by resisting their advice, something that I often see in the Central European markets, especially the Czech Republic. I have noted lately that the organisations that seek advice from people like me are more often foreign-owned or managed businesses themselves, while Czech organisations stick with Czech advisers, which rarely gives them the perspective they need.
In my earlier piece I also introduce a new consumer with new priorities and suggest that the businesses that emerge from the current financial downturn a success will be those that recognise this critical change and adjust their strategy accordingly. Every organisation, big and small,wherever they may be, is in the same boat, but there are valuable and very real opportunities for everyone and there’ll be no excuses afterwards for those who fail.
This point was echoed this week by Lee Scott the outgoing Walmart CEO at the National Retail Federation in New York who told the audience that young customers in particular have adopted a new ethic. They’ll buy what they need, think more carefully about purchases, avoid unessentials, pay cash and avoid credit. Its going to be back to the drawing board for customer-facing organisations whose sales rely heavily on credit and I doubt the plethora of products that we have seen over the last few years, that are unessential, impractical or fail to deliver on any level, will survive. Glad you bought that lava-lamp now aren’t you?
The good news is that I believe that service will come back into fashion. Not the service that so many retailers advertise these days, which amounts to no more than a spotty youth with a badge to confirm that he spent half a day on a product knowledge course that covered little more than how to switch the product on, but real service, from responsible people with a depth of knowledge and understanding of their product and a determination to serve their customer.
So, how is your organisation going to service the new consumer, at home or abroad?
Posted: January 9, 2009
It seems rumors of the jingle’s death have been greatly exaggerated … by me at least! Having waxed on last month about how great life was when we all had a few jingles to hum as we went through our day, I had my attention drawn to an organisation that has brought the art into the 21st century.
Meet Now House, a business that not only proves that music is a viable and valuable contemporary marketing communications tool, but makes a strong case for integration, DM, social networking and The Big Idea in one neat initiative.
I say this because I became aware of Now House from their Christmas card, which I arrived at via a link from James van Etten’s Clippings and the card was one of those that not only could you forward to your own contacts, but was a rare example of one that you might actually forward without permanently destroying your street cred or losing all your friends.
I suspect that I am not alone in dreading the pre-holiday mailbox full of gag-inducing, unoriginal, dross that most people pass-off for Christmas greetings. I always find myself wondering how apparently switched-on companies can waste such an opportunity to underline their innovation, by demonstrating the opposite so dramatically every December. Because one sign of a well-run business is that they don’t waste free communications opportunities, my advice to any client who is looking for a business partner for any purpose, is choose the one that didn’t give the job of designing their Christmas card to the tea lady (not that I have anything against tea ladies you understand!).
The “big idea” is a constant theme of this blog and my little talks. Basically, my point is that however great your delivery vehicle may be, it has to be delivering something useful and in this world of marketing noise one of the essential attributes of a decent campaign is “cut through” – without the big idea your media costs are going down the toilet.
I was involved a few months ago in a debate about viral. Someone (I can’t remember who now) suggested that viral marketing is a great way to piss money away and they are right. Isn’t automation great? Now you can lose a shed-load of cash and never leave your desk! If you consider most of the viral campaigns you see, its clear that their originators think that being in this goovy new media environment is enough in itself. They don’t stop to think that its a double-edged sword that’s gonna demonstrate what twats they are to gazillions rather than just millions of people if they don’t use it right.
What Now House did with their Christmas card was use the delivery vehicle in a way that demonstrated their skills, reinforced their brand charater, was worth taking the time to open and seeded a viral chain that I am now, in January, still perpetuating – now that’s efficient marketing!
The sub-text to this is that if they are this switched on and still doing stuff with music then there must be something in not only this jingle thing, but the guys at Now House.
Posted: January 1, 2009
Before we all sober up and start banging on again about how tough life is, I thought I’d nip in with a ray of winter sunshine. I’ve never been much of a moaner. Challenges like the current economic woes are what, as a marketer, I’m paid to overcome and this is just another day at the office as far as I am concerned. A bigger, juicer challenge maybe, but hey, bring it on!
Among the many good things that will result from the current crisis will be the disappearance of organisations that had no place in today’s business world in the first place. Businesses that have lost their way, like Woolworth, Adams, MFI and others in the UK, those that have become irrelevant, are badly managed or just never got it together will all disappear and we’ll all be better off for it – them’s the breaks and the UK government reckon that another 440 UK retailers alone will go to the big mall in the sky by April!
Clearing the decks of the dross though, isn’t going to mean that the businesses that remain will have an automatic ticket to ride the gravy train, because its all change as far as far as customer priorities are concerned too and unless your organisation is sensitive to this and you’re ready to make the necessary changes you’ll be back there with the no-hopers.
In 2009 strong brands will pay back the investment that has been made in them over the years, but I mean brands with real integrity not those that have been selling us a line for years. In the last few weeks I have been listening to interviews with end-users from around the developed world who have expressed the common belief that what’s brought us to this sorry state has been our own irresponsibility and lack of real priorities. Yes, our customers have a new perspective and if your brand has been built on selling people stuff that they don’t need you’d better think again! We are about to witness the birth of a new business paradigm.
The new consumer seeks, products that meet a genuine need rather than the want that marketers have tended to stimulate in the past. There’ll be a backlash against frivolous products and an even bigger one against brands that don’t deliver on their promises. This will resonate along the supply chain to business to business relationships too. Furthermore, the value equation will be modified with quality or practicality acing aesthetic.
Opportunities will be there for well developed brands with a sound efficient support structure to expand into new territories where home-grown competition doesn’t measure up, but this doesn’t only mean opportunities for Western organisations in developing markets like Central and Eastern Europe and Asia because the businesses there that haven’t become greedy and are honest about their own strengths and weaknesses will be able to expand into developed markets where consumers are looking for lower prices and better value based on the practical formula.
Efficiency, low prices, quality and decent margins are the product of real integrated marketing, but you will only satisfy the emotional needs of customers, BtoB or consumers, if your brand has an honest face and an honest heart. These are the real challenges that organisations face in the forthcoming months. Are we up to the challenge? Generally, I think the answer is “yes”, but its patchy and success will only be achieved by organisations with the self-discipline to keep the new objective in their sights. Businesses that realise the game has changed, that understand they are a marketing organisation like everyone else. Those who place the brand at the centre of their organisation and marketing in the driving seat. Fasten your seat belts, it could be bumpy.