Posts Tagged 'Trout and Ries'

iPhone A Spectacular Failure – or – Spectacularly Bad Predictions

Mark this date:  June 18, 2007.  That was the date when Al Reis made the bold prediction based on his theories of marketing. The Ad Age headline:  WHY THE IPHONE WILL FAIL

Prediction No. 1: The iPhone will be a major disappointment.

The hype has been enormous. Apple says its iPhone is “literally five years ahead of any other mobile phone.” A stock-market analyst says, “The iPhone has the potential to be even bigger than the iPod.”

I think not. An iPod is a divergence device; an iPhone is a convergence device. There’s a big difference between the two.

In the high-tech world, divergence devices have been spectacular successes. But convergence devices, for the most part, have been spectacular failures.

Hmmmm.  I’m beginning to think that time has proven that prediction to be slightly off the mark.

Al Reis Why the iPhone Will Fail

Improving Marketing Through Improv

I just got home about an hour ago from a very exhilarating evening with the improv group Chicago City Limits and the NYAMA.  We had a very special workshop on creativity in marketing.

For me, personally, it was one of the most enjoyable events I’ve been to this year.   I must confess my strong bias.  I’m a person who has always found improv classes to be the most enjoyable theater experiences.  They are easily as enriching and mind stretching as anything I did at Columbia’s School of the Arts.

If you work in marketing or any creative field, you owe it to yourself to study improv.  Agency side, client side, consulting, academics — we can all benefit from this as long as we keep an open mind and open attitude.

Chicago City Limits is NYC’s longest running improv theater.  It was transplanted here about 20 years ago when Paul Zuckerman, the creative director, moved to the city.  And by great good chance, Paul is also a member of the NYAMA.

Next up:  Monday is a networking event at the NYAMA.  And next Wednesday, May 25th, is breakfast with Jack Trout as part of the NYAMA’s “Meet The Author” series.

Who is Jack Trout and what’s he done for marketing lately?

Jack Trout has written a new book, that’s what he’s done!  Come and meet Jack in person and find out more next Wednesday, May 25th at the NYAMA’s “Meet The Author” breakfast series.

It starts at the ungodly hour of 8 am with a jolt of caffeine followed by a conversation with Jack Trout.  It will be held at the New York American Marketing Association offices on 116 East 27th Street, 6th floor, 1-212-687-3280.  You can sign up at nyama.org

Jack Trout is the co-author of Positioning.  And of Re-positioning.  And of many other well-know books on marketing.  If you’ve never heard him speaking about branding, you really should come.

So here’s one of my favorite Jack Trout stories.

In 2004 the CMO of McDonald’s, Larry Light, revealed the new branding strategy behind McDonald’s incredible turn-around story.  How incredible was the turn-around?  In less than a year his approach lifted the company to higher sales, revenues, margins and growth of a brand that many people had written off as just for young families.

Here’s Larry Light in a NYC speech to the heads of ad agencies and clients:

Beware of the so-called “positionistas.” They say that a brand can only stand for one thing in the mind of the market. This may make some sense for small brands. But for big bands – like McDonald’s – it’s nonsense.

Identifying one brand position, communicating it in a repetitive manner is old-fashioned, out-of-date, out-of-touch brand communication. Simplifying a brand to a single position is not simplification, it is simplistic. Simplistic marketing is marketing suicide.

Then Light introduced an entirely new approach to marketing, to advertising, to branding.  It is an approach to marketing with narrative and storytelling at the heart of it.  Here’s how Larry described it:

A brand is a multi-dimensional, multi-faceted, complex message, not a single-dimensional, single-positioned, simplistic message. Customers will not accept monotonous, repetition of the same simplistic message. They want a dynamic, creative chronicle.

And, big brands like McDonald’s are not uni-dimensional. We are a multi-dimensional, multi-faceted, multi-segmented, many-sided brand.  So, we changed from mass marketing a single message to multifaceted, multi-segmented, many-sided marketing.

We think of our new marketing approach as “Brand Journalism.”

In Ad Age Jack Trout responded.  Go back to the August 2004 and you’ll see the headline reads:

McD’s abandoning of positioning is “Lunacy”

Perhaps it was lunacy but it set the company on a path that has put it into the stratosphere.  McDonald’s was 1 of 2 DJIA companies in 2008 to end the year with their stock price higher!  Gold Effies in the US.  Global Gold Effie.  Record breaking sales.  That’s the kind of lunacy that I like!

Agree or disagree with Jack Trout….the point is you need to pay attention to him.  It is absolutely, entirely and certainly worth going and seeing him first hand next Wednesday, May 25, at the NYAMA.  nyama.org

When We Were BRITE And Young…

More recap of the BRITE conference from earlier this week.

Thursday morning started off with a thunderclap.

How else can I describe that moment when you feel so completely alive and rapt by a presentation at a conference?  The usual “lean back, listen, observe, observe yourself observing” experience was replaced by the highly charged engagement of discovery — the  leaning in, hearing, trying to make sense of what is so sensible but so insightful and smart. For me it was a lightbulb moment, a Eureka moment.  That is the only way I describe what it felt like to hear Columbia’s own Professor Sheena Iyengar discuss her work on “The Art of Choosing” and her famous/infamous Jam Study.

Professor Iyengar discussed how people say they want more choices but what they really want are better choosing experiences.

More choice leads to “Choice Overload” which decreases: 1. commitment to buy  2. decision quality (make worse choices, abandon in-going criteria) and 3. satisfaction (did I buy the best thing? did I make the right choice?)

Then she tackled the problem that had been bothering me for years.  There’s a seminal study from the 1950s by George Miller which is titled “The Magic Number Seven Plus or Minus Two”.  In marketing this has often translated into theories about unaided brand awareness as the main predictor of brand selection and a very high level of importance placed on brand awareness.

Trout and Ries used Miller’s study as one of the fundamental pillars to support their positioning model in their book “Positioning: The Battle For Your Mind”.  Share of mind, or Mind Share, became the driving focus of marketing from the 1970s up through today.  It is what MBA students have been taught for decades.

There had always been something about this “magic number seven” that was contradicted by actual experience and empirical evidence.  After all, the average person can name many brands verbally.  And when you show them the actual packaging or logo their recognition jumps even higher.  Just off the top of my head I can name more than a dozen brands of beer (Saranac, Samuel Adams, Coors, Miller, Budweiser, Michelob, Sierra Nevada, St. Pauli Girl, Pabst, Rolling Rock, Anchor Steam, Brooklyn, Blue Moon, Molsons, Hite, Kirin, Heineken, Red Stripe, Guiness, Modelo, Polar, Busch, Kronenburg, Lowenbrau, Harpoon) and within that I can identify many variations (Miller Genuine Draft, Miller Lite, Miller).  If you showed me the packaging I would recognized at least twice as many.

Professor Iyengar cleared up this mystery for me.  In fact “experts” in any category can handle more choices and they want more choices.  They see options, organize the choices, categorize them.  They see patterns and put the different brands into those categories and sub-categories.

The example that she gave was the chess master.  The options for moves that a chess master has is exponentially higher than the total number of brands in the world.  The master sees patterns, zeros in on the most relevant choices and then thinks ahead many moves to see the consequences of his choices.

That made sense to me.  I do not consider myself an expert on beer but I did spend more than 4 years working on beer advertising accounts.  That sensitized me to beer.  I seem to notice beer brands unconsciously whenever I travel to a new place. Professor Iyengar helped me understand what was going on in my process of remembering the brands. I went through a number of filters.  The first was big brands vs. small brands (although Saranac isn’t a traditional big brand, I had spent time upstate in NY where it has a lot of visibility). The next was geography (states, countries, cities).  Then by visual memory of what I’d seen on bar taps and six packs.  Finally there are a number of brands that I can visualize in my mind but cannot immediately remember the name of…for example I can visualize Corona Light, with lime wedges, I know it is from Mexico, I can picture the advertising in my mind, I reach for the word cerveza is and until this moment I couldn’t say Corona Light.

She then provided the keys to helping consumers make better choices.

1.  Cut: get rid of similar looking options

2. Organize: by categories consumers intuitively understand, not by industry standards

3. Condition: help people handle complexity by going from the largest filters (e.g. 2 or 3 categories) to the smallest (multiple sub-sub categories)

Here’s what the NY Times had to say about her book.

Unlike “provocative” books designed to stir controversy, “The Art of Choosing” is refreshingly thought-provoking. [NY Times Book Review, 04/18/2010]

The Art of Choosing

One other presentation that I want to bring to your attention.

Renée Horne of Fedex discussed “the evolving role of marketing” and the growing importance of employees to influencing customer purchasing choices.  At the same time, customers are expanding the criteria they use for choosing brands — with social responsibility, sustainability, workplace conditions and other corporate reputation factors coming into play more than ever before.  And, finally, social media is the way employees naturally want to communicate these days.  If they are using Facebook at home, their inclination is to want to use Facebook at work.

For Fedex this meant tapping into employees and making them ambassadors.  It led them to “a fresh approach to brand storytelling.”  And to “I am Fedex”.

They recognized it as “potentially game changing…to drive higher level of engagement with our own employees.”  The more engaged the employees, the higher the level of customer satisfaction.

The roll of storytelling is very important to us

Using social media, Fedex seeded the program with professionally made videos and then allowed employees to make their own.  Hundreds of videos have been made by employees around the world, sharing their “I am Fedex” stories with each other on Facebook and other social media channels.

To keep the stories real, “authentic” there are no scripts but there are some clear and simple guidelines and criteria for employees to follow.

I am Fedex storytelling

Of course in today’s world what is internal is external in a matter of moments.  There is no longer the possibility of an employee branding program not being seen by the world at large.  So the Fedex program has external elements and visibility.  It isn’t pushed on anyone,

“if customers see it, it is through sales association…We put it online.  We are not pushing it in paid media…You can see it on our YouTube channel, “Behind the scenes at FedEx”

A central element of “I am Fedex” is the purple promise.  That is in many of the videos.  It is also shared through more traditional communications such as booklets, merchandise, posters, employee awards — many of which anyone can download from Fedex.

The Purple Promise

The Purple Promise booklet

The reality is that selling in the program was not a slam dunk.  The SVP who initiated it was persuasive in selling it in to senior management.  And then they had to “overcome the fears of “what if….” with middle management”.

So, some editorializing: What I find to be particularly compelling about the Fedex program is the use of the first person singular — “I”.  It personalizes the pledge.  It internalizes the stories.  Just by having an employee say “I am Fedex” aloud  commits them.  Nobody wants to have to take back their words.  Another good example of this internalization is the longer running “I’m an IBMer” program.

 

There was more and more to BRITE.  I’ve just skimmed some of the highlights that I found to be compelling, interesting or personally relevant.

Welcome to the Decade of Narrative Marketing

Marketing is undergoing a transformation.

Marketing is being re-invented.

The so-called “22 immutable laws of marketing” have mutated.  They’ve been broken.  Now they are being repealed.

Bold moves by companies such as Samsung, Apple, Google, Hyundai, Adidas, JetBlue and McDonald’s — to name some of the most visible ones — are re-writing the marketing playbook.

The innovation is coming from the corporate side and from bold thinkers .  To name just a few — Douglas Holt, Marc Gobé, Gerald Zaltman, Larry Light, Joan Kiddon, Joseph Plummer, Jae Hang Park.  There are many others.   We can all learn from the example of Philip Kotler, the father of modern marketing, who is continually seeking a better framework for marketing as the world evolves (Marketing 3.0 is his newest explanation of this third wave in reinventing marketing).

The future of marketing is built on a better understanding of how the human mind works.  The future of marketing is based on new learning into the sheer power of metaphors and story telling to shape the very way we understand the world.  It is based on the breakthroughs being made by neurologists who are able to study our brains in ways unimaginable 15 years ago.  fMRI and other technology are opening new windows into our brain, giving us a better view of what happens inside.   This is not a tale from a Avatar or some other 3-D science fiction film.  It is well-known from the work of Steven Pinker, Oliver Sacks and others.

The future of marketing is based on the simple principle of co-creation.  That means the consumer is central to the process. It recognizes the essential role consumers have in co-creating meaning and value.

The future of marketing includes that essential 4th dimension — time.   It will no longer look at the world in a 2 x 2 grid.  It is flexible, dynamic.   New marketing will replace old marketing the way that steel replaced iron; the way that LCD flat screen TVs replaced vacuum tube TVs

The future of marketing embraces technology as a strategy, not just an execution.  The new new thing –QR codes, social media, hyperlocal marketing — the technologies of the moment will continuously change.  Marketing will break down the internal silos that agencies & corporations erect around the digital world of online and mobile to separate them from the analog world of TV and Radio.  The future of marketing looks at the ways a story jumps from one medium to another, the way a book becomes a movie becomes a Broadway musical becomes a video game becomes a theme park attraction becomes an app, becomes an iPad iBook, becomes….

The past of marketing is static (position), focused on the competitor (different) and not the consumer, reductive, minimalist, simplistic to the point of trying to summarize everything into a single word.

The future of marketing is narrative.  It will:

A) Tap the power of metaphor and story telling

B) Co-create

C) Be alive, living in time

E) Embrace new technology to tell stories in new ways

1/1/11 is the start of the Decade of Narrative Marketing.  The future is an open book.  Go ahead, write the next chapter.

Branding tools people use vs. branding tools that are useful

I thought this was rather fascinating.  We did a simple cross-tab of marketers who use a variety of branding tools on one axis and how useful they thought the tool was on the other.

Rather revealing.

Seems that many marketers are using tools that they don’t find to be particularly useful.  At least that is the read from Frank and from my team members.  It aligns with all of the other signals that we are getting from marketers — they want breakthrough branding methods that are designed for today’s world.

I just keep going back to the book Chaotics by Kotler and Caslione — where they make a very clear point that we can’t go back to marketing-as-usual because that world doesn’t exist anymore.  I’d actually quote the book but I’m in Frankfurt at the moment with a very limited library of  Wallace Shawn essays.  He’s a marvelous playwright and a very funny actor.  His more serious work is the play “Aunt Dan and Lemon” and his acting has included everything from Woody Allen movies to being Jon Stewart’s therapist on The Daily show.

But I digress.  Back to the business of branding.

The chart below is from our study of 130 CMOs and marketing decision makers that was fielded in January.  You can get a more detailed copy of the study in earlier posts.  And we are putting this together with the 2009 data for a more in-depth look at the state of marketing as we move into this brave new decade.

So how do you think branding should be reinvented?

CMOs on branding tools: Use vs. Useful

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.


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