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General Motors is a company in distress.
For the car buyer in North America, GM makes it nearly impossible to feel they should care about a GM product when it comes time for a new car or truck.
Forbes offers context:
When Alfred Sloan joined GM in 1924 as operating vice president, he inherited what he called an “irrational product line”–one that had no guiding policy for the marketing of its many brands. The company’s only objective was to sell the cars. The brands stole volume from each other and, with the exception of Buick and Cadillac, all lost money.
Sloan immediately realized that GM had too many models and too much duplication and lacked a product policy. In one of the earliest examples of market segmentation, he reduced GM’s offerings to five models, separated them by price grades and emphasized individual brand image to entice customers into the GM family and move them up.
These distinct and strong brands allowed GM to capture more than 57% of the U.S. market by 1955. Aware that pursuing more market share could lead to antitrust actions and the threat of a breakup, GM fatefully shifted its strategy from making better cars to making more and more money from a relatively stable number of sales.
Nothing dramatized this new direction more than the concept of “badge engineering,” or selling identical vehicles under different model names. This invention of GM’s finance staff was a way to increase profits through uniformity, by, among other things, making parts interchangeable. Slowly but surely, the different brands lost the individual personalities that the company had so painstakingly established. At the same time, to improve their numbers (and bonuses), the GM divisions began to push the boundaries of the product policies that defined their brands: Chevrolet went up in price with fancier models, as did Pontiac. Buick and Oldsmobile offered cheaper versions. In time, GM was once again producing multiple cars of different brands that both looked and were priced alike. For GM, it was 1921 all over again, with brands that look alike and are priced alike.
Fortune steps in with a detailed critique of of GM, with one individual describing the company as a sclerotic bureaucracy. Acknowledging that companies in distress are not turned around by cost-cutting alone, this about Rick Wagoner, GM’s CEO:
Acknowledging the risk–”The jury’s out,” he says–Wagoner nonetheless expresses confidence because he believes there is “inherent goodness” in GM’s products that the market will begin to recognize. But he also knows that every car manufacturer has a provincial view of its own prospects: “We’re all guilty,” he says. “We go through our design studio and go, ‘Wow, we’ve got great products. They’re so much better than what we had. This is going to turn things.’ What you forget is that the same discussion is going on in every design studio around the world.” That doesn’t necessarily make you wrong in your expectations, he says. But in the end, it’s “a bet.” And you don’t know–can’t know–whether this time it’s going to bring in the revenue.
One car buff says, “They need irresitability and head-turner [products] and they haven’t had them.”
The inherent goodness in GM’s products… They’re so much better than what we had. This statement by GM’s CEO is the essence of the problem.
GM should instead listen to the words of Scottish poet Robert Burns, and truly see GM products as consumers see them. GM for decades has failed miserably in demonstrating the answer to the implict question behind every automotive purchase: Why should I care about a Chevy? Or a Pontiac? Or a Cadillac?
GM long ago abandoned the distinctive personalities of each of its brands. And because the personality - and clear difference - associated with a Chevrolet or a Buick was abandoned, each blended together into a range of choice devolving into sameness. GM makes it difficult for consumers to pick out a difference that matters. Consumers do not have the time that selection of a GM product requires. GM brands must instead instantly demonstrate their relevancy with a singular difference demonstrating emotional immediacy, one not owned or expressed by competitors.
With the franchisee, labor relations and liquidity problems GM faces, they all pale when compared to the painful lack of differentiated brands rolling off of each GM production line.
The good news is the problem is solvable. But it will take more than advertising.
We looked at the new rebrand developed by Louisiana State University, and concluded LSU developed an advertising campaign rather than a brand.
The author of one comment to our LSU brand study identifies another reason why the LSU rebrand effort is misplaced and ineffective - LSU engages in too-cute music plagerism:
Not Here, Not Now - Oh No! Not Again!
Yet another regurgitation of the oft repeated “Right Here, Right Now” campaign that just won’t go away. Ever since the benign Jesus Jones song hit the airwaves in 1990, it has been a favorite slogan and anthem of campaigns mounted by the wishy-washy. In this case, the folks at LSU hoped modifying the [Jesus Jones song title] and creating a new song would somehow put enough spin on it to make people believe it was original, fresh and exciting - but the addition of the cryptic “evo devo” doesn’t cut it. Neither does putting someone else’s face on your slogan [The Terms]. Furhermore, LSU draws a parallel predicting The Terms “like LSU” are on their way to “national acclaim.”
LSU used the flip side of the law of borrowed equity, a principle we label as the Martha Stewart approach — giving away hard-earned brand equity through careless behavior and/or pointless association.
Sadly, the brand development process LSU’s leaders proudly described to the press serves as a textbook example of efficiency without effectiveness.
Louisiana State University, more popularly known as LSU, announced their new brand.
Did LSU develop a brand strategy or an advertising strategy? The answer points to whether this campaign will or will not be successful in developing a sustainable competitive advantage for LSU.
From the Baton Rouge Business Report:
Branding has been used as far as anyone can remember to sell just about any product, service or business-related entity you can think of.
Now it’s even breached the walls of higher education.
Universities across the country are embracing image campaigns as a way of wrangling themselves some visibility in an increasingly competitive marketplace.
LSU isn’t waiting long to catch up. The university launched its own national branding effort on Jan. 30 under the banner Welcome to the Now.
The hope is the campaign will enhance LSU’s national visibility, especially in markets closer to home: Houston, Dallas, Atlanta, New York. It’ll include billboards, TV, cable spots and print ads as well as a grass-roots outreach effort on the part of LSU’s existing assets: top students and faculty contacting other top students and faculty around the country to invite them to LSU.
The campaign also aims to convince more alumni and corporate donors to write big checks to the university’s endowment. The launch of LSU’s second capital campaign is nearing, and university officials are counting on it to help close the yawning gap between LSU’s endowment and that of every other research university in the South.
The LSU brand development process:
The university went in-house with its own team made up of several staff from public affairs, creative services and other departments.
The committee worked with the band The Terms comprised of present and former LSU students. The Terms actually coined Welcome to the Now…
The university spent around $30,000 on its campaign, the result of three- and-a-half months of meetings by the campaign staff. The promotional video produced by LSU’s digital imaging department…is as good as anything the TV networks do–another reason not to farm it out, [according to Michael Ruffner, vice chancellor of communication and university relations].
“If you can do network quality, you don’t need to go outside,” he says. “We save a lot of money by being able to do this.”
“We did some market research,” Ruffner says. “It’s not uncommon to spend $50,000 to $75,000 to do market research to plan what you’re messaging.”
LSU explains their new brand:
It’s also another way of saying LSU is the best of all possible worlds for students and faculty members looking for a home, say those associated with the campaign.
[A]n LSU graphic arts designer who helped with the campaign, says most university image campaigns focus on the future, though that wasn’t the message LSU wanted to send.
“We didn’t want to do anything hokey, so we started saying right now is when you need to be here at this university,” Pickard says. “Right now is when we have a cutting edge. Right now it’s energized. Be here right at this moment. It didn’t matter if you were an alumni, a current student, a prospective student or even just members of the community, you needed to be on this campus right now.”
“The whole strategy here is to get everyone to come onto the LSU Web site and check it out,” Ruffner says. “The message is now is a good time to be at LSU. You can develop your career. You can have fun.”
How LSU plans to communicate their new brand:
Welcome to the Now is about to be everywhere–on t-shirts, blaring from LSU’s 2006 promotion video, on billboards, in the phone greeting you hear from the university staffer who answers the phone.
Even blasting from car radios: LSU’s campaign features a bonus in the form of its own rock song, “Welcome to the Now Evo Devo.” Besides supplying a catchy rhyme, “evo devo” is shorthand for a field of biology called evolutionary development…
LSU is going after “influencers” as well, in this case the 15 to 25 demographic, college-age people–but also the 25 to 54 demographic, parents and friends who influence college choices.
What LSU says is a new brand is instead an advertising strategy. The implications to LSU are big, including the far greater long-term expense of an advertising strategy compared to a branding strategy, opportunity cost, loss of institutional credibility, and the expense of finally developing a breakthrough brand solution when the realization hits home months later Welcome To The Now and other brand tip-of-the-spear components are not working.
The reasons are simple. For example, the new tagline, song, and website execution fail to differentiate the university from other competing institutions. Welcome To The Now could easily and as authentically apply to any number of universities. This tagline forces an explanation from LSU of what they consider their key difference to be, rather than itself offering a demonstration of LSU’s uniqueness, a critical disadvantage in a message overloaded culture.
Welcome To The Now exemplifies superlative, cheerleader messaging, of importance to those inside an organization but of little relevance to those outside, the crucial student and donor audiences LSU seeks to influence. The new brand fails to offer the listener any emotional immediacy in answering the question - Why should anyone care about LSU?
Beyond the tagline, implementation of this new brand suffers on the LSU website. The new branding is not integrated into the site itself, but rather is boxed off to one side on a visually cluttered homepage. An example of how some web designers believe it important to jam as much information onto a page as possible, without a demonstrated understanding of how the website as communications channel must connect between the eyes with both internal and external audiences.
Any effective brand strategy effort is an exercise in brand positioning. For positioning to be effective, it must be authentic, provide a relevant connection to the target market, and create separation from competitors. Positioning must create new mental real estate. Ownership of new mental real estate is a powerful business driver, whether attracting the favor of donor capital or an increase in enrollments.
A brand position relying upon an overused cliché such as “Welcome To The Now” creates nothing new within the mind of a target audience. [Google reveals 32,900 uses of the phrase.] If not staking out new and unique territory, a brand lacks a compelling reason to be committed to memory, and instead becomes part of the white noise of popular culture. If the brand is not memorable, brand positioning devolves to a Chase-The-Audience game, institutionalizing heavy year-over-year advertising expenditures to support the positioning. The asset that is a brand does not grow, and market traction is not achieved.
Welcome To The Now What.
How much would it cost a company to rent their trademarks, logos and other brand-related assets from a third party?
The answer is one way to calculate the value of a brand as balance sheet asset. It points to how effective brand strategy is the business of creating a balance sheet asset to drive sales and margin.
Investors thumbing through the Royal Bank of Canada’s financial filings will find an impressive array of assets. Right there in black and white are notations for $304 billion in total deposits, $187 billion in outstanding loans, and other hard assets that make the Royal Bank one of Canada’s largest and most successful companies. But nowhere will you find a value for one of its most precious assets–its brand. That’s too bad. That line would add another $4.5 billion to the company’s bottom line, according to a new study of Canada’s most valuable brands–which Royal tops for the second year in a row
Read on, in this report from Canadian Business.
A company has a marketing budget somewhat less than that of a Fortune 500. How to introduce their brand on limited resources? Resort to fakery in a buzz marketing campaign.
Will it work? Not on a sustained basis. An example of grabbing the easy laugh at the expense of developing a sustaining competitive edge; short term attention over a long term brand advantage. As funny as fakery may be at first, deep down few like to be fooled. Inauthenticity undercuts a brand promise.
Here’s the story, from the New York Times.
Borrowed equity is the label applied to one strategy used to grow the value of a brand. Here’s how it works - borrow the reputation of another, often more established, brand to gain consideration in the mind of the consumer to drive trial and repeat, and/or to move up the value chain to command a higher margin. Use of this borrowed brand equity reflects upon and adds value to yours.
Here’s an example.
We stepped into it when the Major League Baseball’s Anaheim Angels changed their name to Los Angeles Angels of Anaheim.
At the time we said Arte Moreno, owner of the Angels, was using a classic brand strategy to grow his brand, that of borrowed brand equity. Here’s how it works - borrow the brand reputation of another to gain consideration in the mind of the consumer and drive consumer repeat and/or to move up the value chain to command a higher margin.
Trading out the brand equity of the city of Anaheim for that of Los Angeles likely provides the opportunity to increase consumer attention drawing more fans to the club, as Los Angeles is the far larger market. However, the real driver behind use of the strategy was to gain a foothold in the minds of media channel executives, those controlling content with broadcast and cable networks. The Angels set out to reinforce the idea that the club is located within the second largest media market in the United States, an idea that does not automatically come to mind if one thinks only of the market reach of Anaheim.
To reset, the city of Anaheim sued the Los Angeles Angels of Anaheim, claiming the Angels breached their stadium lease with the city. The real reason Anaheim’s leaders sued the Angels was not the strength of their legal claim, but rather emotion demonstrated as pride. As a far smaller, nationally less known city, Anaheim did not want to be seen as usurped by their cousin to the north, the city of Los Angeles. The obvious problem is, however, they are.
Last week a jury decided the case in favor of Mr. Moreno and the Angels, based on the plain language of the contract.
Today, the news is that the Los Angeles Angels of Anaheim are close to signing a 10-year, $500 million deal with Fox Sports Network for the broadcast rights to Angels games, compared to the $24 million cable television outlets paid for the rights in 2005.
Mr. Moreno paid $183 million to purchase the Angels in 2003.
For a demonstration of the power behind brand strategy, one could do far worse than this example.
Anyone looking at their email inbox today at the Valentine’s Day greetings from vendors/suppliers understands how Valentine’s Day continues to grow into a global phenomenon. This entry in Wikipedia offers insights into how the holiday is spreading throughout the world, and the history behind the holiday.
In Japan White Day has emerged as a reciprocal holiday to Valentine’s Day. In Korea, there is Black Day. In Colombia, it’s Dia del Amor y la Amistad [Love and Friendship Day], celebrated in September. And in China, it’s The Night of the Sevens.
In Finland, the holiday is referred to as Friend’s Day, or Ystävänpäivä.
In Saudi Arabia, lovers discretely celebrate the holiday.
Then there is Singles Awareness Day, for those unentangled in romance, where the greeting is Happy S.A.D.
Every so often we see a new brand serving as an over-the-top example of what not to do. With respect to the good people of Sprint Nextel, this cautionary tale from the Kansas City Star:
Dan Hesse, chief executive of the Sprint local unit soon to be known as Embarq, disclosed the results of a 10-month branding process during a presentation in an auditorium on Sprint’s Overland Park campus. He was wearing green, the colors of a new pointy logo resembling a stealth fighter jet.
“The company’s new name, Embarq, and logo are meant to signal the way we will do business and establish what a next-generation local communications company can be,” Hesse said in a statement. “This is a company that will be aggressive and innovative in the marketplace, and the new name and logo, with its distinctive and differentiating coloration, is the brand we want customers to remember.”
Words of adulation only a corporate insider could love. But, there is more to this perversion:
A Sprint spokeswoman said the new name will be spelled with a “q” because company executives want a brand that is “visually and verbally distinctive.”
…Embarq emerged after the company examined thousands of potential brands and talked to well over 1,000 customers during research, said Daniel Alcazar, a Sprint vice president of brand management. Business and residential customers surveyed indicated that the new identity was “forward-looking, futuristic and innovative,” and a good fit “for a new company charting its own course,” the company said.
Although Sprint’s local telephone division has roots going back a century, executives want the new name to focus on the company’s future position in the communications industry, Alcazar said.
“Telephone’ would be too limiting for us,” Alcazar said. “We purposely did not include that terminology.”
A principal of our firm is quoted in this same story, “I have no idea what they are doing. I have no idea.” That sums it up nicely.
This verse from the Robert Burns poem, To A Louse, describes the value of qualitative brand research:
O would some Power the gift to give us
To see ourselves as others see us!
Step out from behind your desk, conference table, or workstation, and see yourself, your product, your organization, as others see you. Rather than speculate in a conference room, get out to watch and listen at how your brand and lifestyles converge. It’s where true insight begins for brands wishing to move beyond the banal.
In the U.S., the state of Utah is about to unveil a new brand strategy. To be backed by $10 million in state funds this year alone, it better be good.
The brand tagline in use since 2001 is Utah! Where Ideas Connect
To see if Utah can improve upon that classic, stay tuned.
In late January, Ford Motor Company announced their Way Forward plan to reverse years of shrinking market share and deteriorating margin in North American operations.
After pleading their case to Wall Street, Ford is trying to convince Main Street. As reported in the New York Times:
In a new television commercial Ford timed for broadcast just two days after it said it would close as many as 14 factories and cut up to 30,000 jobs over the next six years, Mr. Ford says his company is “determined to retake the American roadway.” The ad, titled “Rebirth,” echoes much of the restructuring plan that Mr. Ford presented on Monday and candidly acknowledges the company’s recent difficulties…
Anne Stevens, Ford’s chief operating officer, said in an interview that if Ford was to overcome the perception it was not doing enough to address its problems, candor was the best way to do that.
“We recognize the reality of the marketplace,” she said. “We’re fighting to win, and that’s what we’re going to do. This is not the time to hide.”
The 30-second commercial will appear on national television and in some select markets, including Detroit, New York and Washington, during the next three months.
The commercial and a 60-second companion spot appear on the Ford Motor website [click through Innovation is Our Mission and Driving American Innovation]. Both spots speak of Ford Motor Company in language important to Ford insiders such as the determination “to retake the American roadway,” rather than demonstrating to the American public why they should care. The spots also suffer from copy overload, ignoring a law of branding known as the principle of simplicity.
These commercials demonstrate the inability of Ford’s leadership to wrap their heads around how the buying public sees Ford Motor products. The result is a misguided reliance upon advertising strategy, rather than a tight rethink of Ford’s brand strategy.
Ford can find an ownable brand position, one creating a sustainable opportunity to regain market share, by listening to the wisdom in a verse from the Robert Burns poem, To A Louse:
O would some Power the gift to give us
To see ourselves as others see us!
Occam’s Razor is a principle attributed to the 14th-century Franciscan friar William of Occam [or Ockham]. Also referred to as the principle of parsimony or law of economy, the Razor is of value when considering brand strategy.
Stated in its original Latin as numquam ponenda est pluritas sine necessitate, the Razor is often translated as given two equally predictive theories, choose the simpler and alternatively, the simplest answer is usually correct.
In branding the simplest answer is usually correct. The reason is that branding is a search for the obvious.
The obvious are the easiest concepts to communicate and remember because they make the most sense to the recipient of the message. However, for companies in need of brand strategy, experience reveals that obvious concepts are often the most difficult to recognize, as the human mind tends to admire the complicated and dismiss the obvious as too simplistic.
We take our cue from Leonardo da Vinci, who lived after Occam’s time and developed a variant of Occam’s Razor: [in branding] Simplicity is the Ultimate Sophistication.
Visa USA announced a new rebrand. The question is, Why?
Jettisoning a brand positioning that for 20 years included the tagline Everywhere You Want To Be, Visa launched a new campaign attempting to stake out the central to life position, Life Takes Visa, to differentiate Visa from, for example, Mastercard’s evocative and effective Priceless.
In this release Visa USA explains:
Employing the theme of empowerment, the new campaign reflects Visa’s evolution from a top credit card company to the leader in electronic payments, combining worldwide acceptance with a full suite of products that empower cardholders to do what they need to do, want to do and never thought possible.
Brand strategy’s raison d’etre is to provide competitive separation through an easily understood point of difference. If compelling and authentic, a brand creates for itself the opportunity to be remembered by the very audiences it seeks to influence.
What Visa USA offers as a new brand is instead a new, and costly, advertising strategy. It fails as brand strategy on two levels. Life Takes Visa is inauthentic, as life clearly does not require Visa as it does practice, talent, confidence, luck, ambition, or guts, irrespective how often Visa may shout otherwise. And, Life Takes Visa does not separate Visa from one obvious competitor, American Express. The American Express brand position? My Life, My Card.
We came across this from the Business Times of Malaysia:
[C]onsumers expect a consistency between a company’s brand message and the behaviour and image of its key executives. Brand validity can only be fully achieved if the CEO embodies the brand and its values…
The CEO is…the brand leader or guardian of the company’s brand. Consequently, all CEOs [should] clearly understand the value and importance of the powerful, clearly defined…brand… They need to ensure…a clear brand strategy…and that all stakeholders in the organisation understand and embrace it to deliver the brand promise.
Those entrusted with a brand must live the brand, demonstrating the brand promise rather than explaining it.
True for CEOs in any industry.
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