Archive for June, 2009

Rabobank. How cool is that? More than Google!

Earlier this week I heard a wonderful story about Rabobank.  It drew on the bank’s roots as an agriculture bank and how the company has grown but never strayed from its heritage.  Then I was told that in The Netherlands, Rabobank is considered  more cool than…Heineken, Nike and even Google!

On the CoolBrand study, Rabobank was ranked number 3 — after Apple and Hema.

A cool bank?  Now how cool is that!

As Emmie Steeghs from our Eindhoven office tells it:

Their main advertising is around sport sponsoring. They sponsor a bicycle team which is a contender in the Tour de France and other big bike races which are popular here in Europe.  Up till recently their spokesperson was the captain of the Dutch ladies field hockey team who are World and Olympic champions. This spokesperson, Fatima de Moreiro de Melo, is Dutch with a Portuguese father and  considered a ‘babe’ as are most of the ladies of the Dutch field hockey team. She stopped playing for the Dutch team after last year’s   
Olympics and is now becoming a TV presenter and actrice. She did quite  well for Rabo.  Rabo is one of the few sports sponsors who actually made it work  across all their communications. 

Their approach is very down to earth. They live the Dutch saying, “If you behave normally you are already behaving  crazy enough.”  And that is also a bit their approach to banking. They are solid,  dependable, frugal and they are very much in tune with the Dutch pragmatism. 

And here is what one of their branches looks like:

 

Rabobank interior in Amsterdam

Rabobank interior in Amsterdam

 

A bank proud of its roots in agriculture

A bank proud of its roots in agriculture

 

Rabobank branding stays true to its roots in agriculture and farming.  The founding story is carried through in all of their visual and verbal language and experiential design.

Here is a case where their branding is deeply rooted in their metaphor.  And it is impossible for me to resist using the metaphorical puns. 

And for those interested in the importance of sports sponsorships, here is Fatima.  

 

Rabobank's spokesperson, Fatima

Rabobank's spokesperson, Fatima

 

 

 

Fatima outside of her spokesperson role

Fatima outside of her spokesperson role

 

Google, try to match that!

Business Strategy = Brand Strategy, or Verizon redux

A colleague challenged me on the recent post about Verizon’s business being strong but not their brand.  “How can you have a strong business but not a strong brand?  Doesn’t that contradict the theory that business strategy = brand strategy?”

Excellent question.  I was not clear enough on that point.

So here it goes:

If you business strategy is to operate in a category where there is limited or no competition, then your brand strategy is to downplay branding.

Branding has relatively little benefit if you are in a business that is highly regulated, a monopoly, a commodity or a utility.  Of course it does matter when dealing with the regulators, employees, prospective employees and business partners.  But those are still very small audiences.  Verizon is in a category with very limited competition.  It is a category that is capital intensive, with no single technical standard, so there are very big barriers to new competitors.  And it remains highly regulated.  

The wireless business is slightly more competitive than wireline.  But it still has a limited number of competitors and is capital intensive . Most importantly, the category is growing.  Only a business in poor shape would decline in a growing category.  

Compare this with many countries in Europe where there is a more competitive market.  There is a single standard across the countries, so networks are not a competitive advantage.  There we see some truly outstanding brands such as Orange and O2.  

Now compare this to mobile handsets.  That is a category where branding is tremendously important.  Samsung, Apple, Nokia, Motorola, Sony Ericsson, Blackberry — even LG and HTC.  Those companies really understand the importance of branding and try hard to get it right.  Samsung is getting it right, Motorola has lost its way.  And who can doubt that Apple is getting it right?

In fact, it is the Apple brand that is attracting people to AT&T.  And the problem is made worse by the bad feelings people have about the Verizon brand.  Arguably the Verizon brand is pushing people away.  The AT&T brand has a residual good will from its long relationship with people.  Verizon has size.  AT&T has stature.

Here’s an example of where brand strategy drives business strategy.  The example comes from Larry Light and Joan Kiddon in their new book, Six Rules for Brand Revitalization.  McDonald’s lost faith in their brand’s ability to reach beyond a limited audience, limiting their growth potential.  Growth meant reaching teens and young adults, so the company decided to invest in many other brands such as Chipotle, Pret and Boston Market. That is where the “brand positioning” theory led them.  Brand strategy of one brand to one segment led to a business strategy of buying other brands. 

But it wasn’t working because the core McDonald’s brand continued to decline.  In a reversal of their branding strategy, they adopted a multi-segment approach to branding marketing.  In other words, a single brand appealing to multiple target audiences (but still not absolutely everyone).  The new branding approach (brand journalism) worked, driving organic growth in the McDonald’s franchise.  Eventually the company sold off those other brands and investments.   Brand strategy of one branding to multiple segments led to a business strategy of selling off other brands.

Organic growth?  One of only 2 companies in the Dow Jones Industrial Average to rise last year?  Hey, I’m lovin’ it!

Perhaps illustrates the important relationship between business strategy and brand strategy.  If not, let me know and I’ll try to give other examples or ways to look at the issue.

Verizon: good branding or good business?

At Tuesdays’ Global Branding panel discussion (thanks to the NYAMA and Getty Images), Professor Joseph Plummer began by stating the axiom that brand strategy must be joined to the business strategy.  And then he went on to point out the reality that the two often never match.  It is as if branding lives in a parallel universe to the rest of the company.

So a good brand by definition is one that supports and advances the business strategy.  We can all agree with that, even if it’s not so easy to achieve.

Then does  it hold that a good business has, by definition, a good brand?

Unfortunately, no.  

It is entirely possible to have a good business with a lousy brand.  In fact there are entire categories where the brands are either irrelevant or disconnected from the business success.  Those categories tend to be either highly regulated, have a limited amount of competition (aka oligopolies) or highly commoditized.

Verizon is a prime example where the business is growing despite the branding.  Verizon has been able to post positive business results for a variety of reasons including the growth of wireless category, the still highly regulated telecoms market and the limited amount of competition.

In fact, you could make a strong case that Verizon’s business would do even better if they dialed back on their advertising.  It would immediately drop to the bottom line, increasing margins.  And it would remind people less often of how mistreated they feel by Verizon.

Over the past couple of years I have frequently brought up Verizon as an example for many things that can go wrong with marketing.  They have had some very strong people in their marketing departments.  They have worked with world-class agencies.  And yet nothing inspiring has replaced the Bozell campaign that ran 5 or 7 years ago, the “Can you hear me now?” ads.

And that campaign was inspired.  It was a brilliant story, a wonderful metaphor.  It made the cultural connection with Verizon immediate and visceral, not a deliberate and ponderous decision.  

So we see that a great brand and a great business are non-synonymous (if there is such a word).

Are we in the Rollercoaster Age?

There’s the Age of Aquarius

The Great Depression

The Disco 70s

So what do we call this age?  I nominate “The Rollercoaster Age”.

Why?  This is the age of balloons and busts, bubbles and crashes.  What goes up drops down in free fall.  When we seem headed into the wall of $4/gallon of gas, it twists down below $2.  The senate race in Minnesota is still undecided 8 months after the election.  

Greenspan calls it the Age of Turbulence.  He also coined the phrase Irrational Exuberance.  Philip Kotler and John Caslione call it Chaotics.

To me, the sheer unpredictability from one day to the next, from one moment until the next, is more like a roller coaster than anything else.  That seems like an appropriate metaphor to brand this time in history.  It is gravity defying, with 360 degree loops, sheer drops and sudden reversals.

So welcome to the Rollercoaster Age.

Fun fact: the world’s fastest rollercoaster is at Six Flags Great Adventure in NJ.  Ironic that Six Flags should declare bankruptcy during the Rollercoaster Age.

Are global brands just a myth?

The answer to this question will be provided by Nigel Hollis, author The Global Brand, along with Dr. Joseph Plummer of Columbia (and former chief strategy officer of the ARF) and Trena Blair of American Express.

When?  Next Tuesday, June 16th, at 6 pm.  

 

Global Branding Event

Global Branding Event

I’ll be moderating the panel, so I’ll be depending on all of you to bring your questions!

See you then.

Senior BBDO executive joins Verse Group

It’s not been officially announced but Barry Schweig is joing Verse Group as Executive Director.  We are pleased as could be to have Barry’s wise counsel, experience and great storytelling.

For those who don’t know Barry, he was the BBDO EVP responsible for the global Gillette and Oral B accounts.  That extended far beyond advertising, all the way into new product development.  Little known but true fact, Barry developed the Mach 3 name for the Gillette 3 blade razor.  He also led the branding and advertising efforts for Fusion, Venus and other major offerings.  A lot of people may call themselves brand experts.  Barry truly is one.

There are two real passions in Barry’s life.  One is nurturing and growing global brands.  The other is tending to his home garden.  Both take patience, faith and careful attention.  

Full disclosure here:  I worked with Barry at BBDO on the Gillette business for a couple of years.  I was the international account planner on the business.  So my bias and enthusiasm are no longer hidden.

Before joining BBDO, Barry was an SVP Management Rep at McCann Erickson.  He began his career in creative services at Dancer Fitzgerald Sample.

A tale of two cities (aka why is one brand experience not like the other?)

In the past 2 days I had 2 different retail experiences that I would like to share.  One of them is clearly helping to drive business.  The other is clearly driving away business.

This is the tale of Fairway Markets and Duane Reade.

On Sunday afternoons the Broadway and 74th St. Fairway Market is a complete chaos.  The aisles are jammed.  It’s getting close to dinner time.  Hungry and impatient New Yorkers are picking-up last minute things for dinner and for packing school lunches.  Then you face the line at the cash registers.  At any other retail store the lines would be intimidating.  At Fairway they move.  They move fast.  Next.  Register 3.  Next. Register 7.  Next.  Register 2.  

The cashiers are fast, fast.  They’ve been trained in speed shopping.

On just about any day you can walk into just about any Duane Reade in the city and see 3 or 4 people standing in line.  You go about picking up the items you need, hoping against hope that there will be no line when you get back to the register.  But the line has grown to 8 or 9 people.  You stand patiently, waiting while the one cashier calls the manager for a price check.  The manager looks at the line and begins the process of opening a second register.  By this time the line has added several more people and not a single transaction has been completed.  Soon people drop out of line.  They put down their items and head out the door without making a single purchase.  Business is walking away.  

While standing in line at Duane Reade I made some mental calculations of how much business they must lose due to the check-out situation.  They claim to have over 250 locations in the NY area and are the fastest growing in the category.  If they could fix the experience, then they would be able to do more business with fewer locations.  The cost of retail space in NYC is much higher than the cost of hiring  another cashier.  

Duane Reade recently underwent a big rebranding program, too.  All of these resources spent on expansion, branding.  But the fundamental business problem appears to be the shopping experience.  It would seem that they could improve their brand reputation and business performance by an internal program centered on the customer experience and employee pride.

This was much the same problem that brought down Circuit City.  About 18 months before they went under, Circuit City laid-off 3,400 of their best, most experienced sales people to save money.  That led directly to a decline in sales, particularly of high end items that require more expertise and hand-holding. Imagine if Circuit City had instead cut their ad budget and poured those resources into keeping and motivating the best sales people?  Is it possible they would still be around today?  To be fair, the economic latke dealt them a huge blow when they were already weakened.

What’s in a name? Perhaps a big tax bill?

One of the great mysteries that keeps college students up all night is the question, “What is a Pringles?”

The answer to this question may cost P&G $160 million in taxes in the UK. 

This is a branding question as much as a legal question.  How do you describe your offerings?  Do you give them a descriptive name such as “potato chips” so that people will have an easy frame of reference, a simple analogy?  Or do you give them some fanciful name such as Pringles and self-define it?  Is it an iPod or an MP3 player?  

This is a conundrum that brand managers wrestle with all of the time.  How do I make it sound new while still giving people a familiar analogy so they can easily understand it?  In the movie business they do this all of the time.  We can just imagine the pitch meeting where the screenwriters say, “It’s a high concept file, like an underwater version of Star Wars.”  

Let’s see if we can get it right.  

Is Pringles a potato chip?  It certainly doesn’t resemble any potato chip I’ve ever seen.  Not even Ruffles with those ridges.  Potato chips are like snowflakes — no two are exactly the same.  But it says potato chips on the package!  At least it does in the US.

Is it some weird pressed-potato thingy?  After all, it stacks like poker chips.   And they are practically perfectly round clones of each other, as if there was some ur-Pringle and all others are genetically engineered copies.  And it’s not even 50% potato!  

In the US Pringles claim to be potato chips.  In the UK they claim to be a savory snack that is not a potato chip.  It’s the same product, yet two different descriptors.  And that is the crux of the problem.  If it is a potato chip it will be taxed in the UK at a higher rate.  If it’s a savory snack then P&G is off the hook.

It would be possible to do some market research and see if the associations that people co-create with Pringles are the same or similar to potato chips in general.  Maybe a ZMET metaphor elicitation study?  

The ruling has come from on high, the High Court in the UK, that Pringles are in fact potato chips or, as they say in the UK, “crisps”.  Therefore the $160 million in taxes due.

That may have settled the matter to the satisfaction of the UK legal and tax system.  But I, for one, will still mull this philosophical question, particularly when I’m on that post-midnight insomnia snack raid…

What is so different about Narrative Branding?

It can be summed up easily.  Narrative Branding is an inductive approach.  Brand positioning is a deductive approach.  

Inductive is showing people a painting and evaluating how much it engages people.  

Deductive is asking people what kind of painting they want to see and then painting it.

Now that might need a little more explanation.

In Narrative Branding we bring new narratives to your audience — consumers, customers, employees.  Yes, it begins with audience.  What we are looking for are the metaphors that resonate strongly with your audience and the stories that they tell.  We do not expect them to provide “the answer” at that point.  From there we create new narratives for the brand by imaging the future.  Then we use market research to see which narrative is the most engaging and compelling.  

Traditional brand positioning begins with deducing what is important to your audience by assessing the world as it is today.  You also want to assess how people view the competition.  From that you isolate 2, 3 or 4 attributes which are both important and different from the competition.  The last step is to put those attributes into a verbal positioning statement that is researched, although the words in the final statement are not mean to be used in the marketplace.  Then the positioning statement is handed over to the creatives who are responsible for translating these attributes into the new branding.  

We can go back and forth all day about the merits of one method vs. another.  At the end of the day we come back to the fact that 63% of CMOs and other marketing decision makers want a method that is more effective than brand positioning.  

Marketers unsatisfied with brand positioning

 

And that those who are looking for better methods are much more likely to be using or exploring the use of brand stories and storytelling.  

Marketers are embracing brand stories

This is not my opinion.  This is not the opinion of another branding expert or a branding agency.  This is the opinion of marketers who use these methods. And theirs is the opinion that counts.  The evidence is in the JupiterResearch (now Forrester Research) study conducted six months ago.


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