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08 Feb 2010 23:41
Toyota's toxic 'sausage' shows risk of neglecting product quality
In a branding conference 4 years ago I watched a presentation about the "Lovemarks" concept, which I thought was fatally flawed. The presenter suggested that "Consumers want something beyond benefits, attributes, performance and functionality. They want Lovemarks." Product quality was irrelevant and easily copiable, and the key to success was emotional branding.
A key case study was a car brand. One that had, according to the presenter, got quality sorted, and now needed more emotional connection to grow. Can you guess the brand?
Toyota.
Now I'm not blaming Toyota's problems on following the Lovemarks method. But, it does show how dangerous it is to take quality for granted, forgetting the product "sausage" and focusing too much on emotional sizzle.
To better understand Toyota's problems, guess when the the following headline come out:
"Toyota President admits quality woes are growing pains"
When do you reckon? This week? Last week? Nope. It was published in March 2008, almost two years ago.
And this one: "Toyota to recall more than 1.35 million cars worldwide"?
Jan 2009.
In other words, Toyota's quality problems have been brewing for years. Only now has the new story "tipped" and made the headlines. Or rather new stories, with two now running: sticking accelerators and dodgy brakes.
Toyota is a chilling example of what happens when Leader Brands neglect the quality of their product. In this case it actually seems like this was more to do with a drive for global growth causing the cutting of corners. This was made worse by manufacturing being spread around different sites around the world, rather than being concentrated in Japan, closer to head office. But focusing too much on emotional sizzle can also lead companies to neglect the product.
The risk of neglecting product quality is shown by some great research by the PIMMs institute, and featured in our upcoming book, The brandgym: A practical workout to gain & retain brand leadership. It shows that two factors are equally important for maximising return on investment: i) relative market share, and ii) relative quality.
So, Toyota's toxic sausage is a horror story that reminds us that even in today's age, product quality can never be taken for granted. And no amount of emotional connection can match it for making, or breaking, a brand.February 09, 2010
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08 Feb 2010 04:00
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06 Feb 2010 16:10
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05 Feb 2010 22:27
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03 Feb 2010 08:27
Unilever's CEO brave dismissal of short-termism
I posted a few months ago on the obsession with short-terms results, calling it "The tyrany of growth".
Well, how refreshing to see Unilever's CEO Paul Poleman now speaking out against the short-termism of the stock market, at the Davos Summit. According to The Times he made an "impassioned plea to fellow business leaders yesterday to ignore the demands of short-term shareholders and lead from the front on sustainability and climate change."
What I love about Poleman's speech is that he pulled no punches. He told the audience that he didn't mind if hedge funds sold Unilever’s shares because of worries over short-term profitability. The quote of the day: “These hedge funds would sell their grandmother if they could make money. They are not people who are there in the long-term interests of the company.”
This is is one of the rare business leaders who walks the talk. Many moan about the pressure of short-term reporting. Few have the courage to do what he did last year and stop providing earnings guidance to investors. This resulted in a short-term 6% fall in the share price.
Here's some more of what he proposed:
1. His job as CEO is to ensure long-term success, not to focus merely on shareholder value. Again, I like his boldness when he said: “We want to be in business for the next 500 years.”
2. This long-term focus required costly actions to ensure it had a sustainable business, for example in terms of palm oil supplies.
3. It's time to move beyond “shareholder value” as the guiding principle behind corporate leadership, requiring CEOs to have courage to move out of their “comfort zone”. Another Davos dude, SAP's CEO Leo Apotheker, later proposed the alternative of "stakeholder value”.
4. There were “socially aware” investors that companies could attract to replace the short-term hedge funds.
Hat's off to Poleman for doing what CEOs should do and leading the way to a better future. And extra marks for doing this in a ballsy, uncompromising way.
Unilever has for a long time not got the PR it deserved, given the many leading initiatives it has taken in corporate social responsibility, such as reaching 120 million people in India with an education programme about the importance of washing hands with soap. Perhaps Poleman's more outspoken style will start to fix this.
February 02, 2010
Can O2 really make money from insurance
I posted last month on mobile network O2's plans to stretch into healthcare, based on my comments in a Marketing Week article. Well, it seems they have the brand stretch bug, as news in Marketing suggests they are also planning entering the insurance market. This follows the launch of O2 Money with two pre-pay cards you load money onto. The article suggests O2 is using "a 'Tesco-style' strategy to build its presence in additional markets."
Mmm. Not sure that O2 have Tesco's brand or, more importantly, the business model to do this successfully. Let's look at why.
1. Logo licensing vs. branded business
O2's insurance looks likely to be a "white label" product, where an insurance offer from partner Mondial Assistance has the O2 brand added. So, I wonder how serious and big a business this is really going to be.
Tesco's approach is very different. They create joint-venture businesses, most often staffed by ex-Tesco people who know the brand inside out. In banking, last year Tesco even paid £950 million to buy out its JV partner, RBS, and now owns Tesco Bank. This means real commitment to create a serious business, shown by Tesco Insurance having 2.4 million insurance policies.
2. Brand added value
O2 have done a decent job of delivering customer service. It has done an amazing job at creating and consistently applying a distinctive brand world with the blue and bubbles, as I posted on here. It feels more like a brand with a strong visual identity than a strong brand promise, as summarised by Justin Holloway in Marketing: "An eye-candy brand for the eye-candy age. All elegantly symbolised by its bubble identity: bright, shiny and hypnotic, but penetrate the surface and then – nothing".
In contrast, Tesco is a brand with a very strong promise, summed up with the idea "Every Little Helps". Customers trust Tesco to add value in financial services by simplifying all the jargon, offering value and delivering reliable service. Given what has happened with the major banks, a lot of people would trust Tesco to do a better job of looking after their money.
3. Business model
Tesco has a big advantage over O2 in its stretch into new financial services in the shape of its stores. 2300 of them that get 20 million customers a week. Yes, 20 million, 1/3 of the UK population! It has 3,000 Tesco cash machines, and plans to soon have 30 Tesco banks in stores soon.
In comparison, O2 have only 350 stores in the UK. These are obviously a bit smaller than a Tesco, and don't have the same retail space to flog financial services.
4. Forgetting what made you famous
This final issue with O2 Insurance is that it doesn't reinforce what made O2 famous. Entertainment and sports properties such as The O2 concert venue and priority ticketing have added energy and fun to the brand. Insurance is, let's face it, not fun and energetic. Its hard to see how this will help enhance O2's image. In contrast, Tesco's financial services help reinforce the brand idea of Every Little Helps.
In conclusion, I don't expect O2 Insurance to be a big business, nor do much for the brand. As an O2 customer I have mobile, broadband and mobile broadband with them. But why would I want to switch insurance from leader brand Direct Line? I wouldn't.
February 02, 2010 Comments (0)
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01 Feb 2010 18:57
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29 Jan 2010 15:36
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28 Jan 2010 13:20
Nurofen's poster hits the spot
This poster from pain-killer brand Nurofen hit me when walking the girls to school this morning. I thought it really hit the spot. There's a real art and craft to poster ads, and I think this one is good one.
1. Single-minded
Many posters try and tell a complex story on a poster, even though no-one is going to stop and read it. Nurofen avoid this mistake. Instead, they have a single thought, "Pain has nowhere to hide", brought to life with a powerful image of the Nurofen character.
2. Brand property as hero
Nurofen is a great example of a brand using brand properties to stand out and be remembered, in this case the target symbol. This is used to communicate how Nurofen targets pain, and has been used consistently for many years.
3. Synergy with TV
The poster works well with the TV ad, that I watched online after seeing the poster. Both feature the little animated Nurofen tablet working to fight pain.
4. Power of purity
The pure, white background adds to the impact, and helps communicate efficacy. There is often a temptation to add in details and text to posters, and advertising in general. This might make the brand owner feel good as they've ticked all the comms objective boxes. However, it doesn't do much in reality, as our brains screen out all this peripheral information.
The master of poster purity is of course Apple's iPod. Like Nurofen, we have a single big picture and single thought: 10,000 songs in your pocket.
Now, contrast this with the Sony poster below I snapped at Heathrow airport. At least seven different messages all fighting for attention.
The conclusion hers is that in posters, as with all of marketing, less is definitely more.
January 28, 2010
The iPad: hit or miss?
On Monday I posted on the imminent launch of the "iSlate", which it turns out in the launch tonight is actually called the iPad. Think a big iPod Touch. Or half a small laptop without the keyboard bit.
Interesting point made in Steve Jobs' intro. Apple is the world's leading mobile device company. Add up laptops,phones and iPods and it sells more mobile devices that anyone, including Nokia, Sony and Samsung. And the iPad is designed to strengthen that leadership position.
The idea of the iPad is to fill a gap between the iPhone and MacBook. Steve Jobs rightly says that to be a hit it has to do some things much better than either of these devices. And Apple reckons it will do this for eBooks, web browsing, games and a few other things as well.
So, hit or miss?
The Good Stuff
1. Drop-dead gorgeous: as you'd expect. My 11 year old daughter summed this up. "I don't know what it does. But I want one anyway".
2. Great for eBooks and eMags: this is the one big advantage I can see over a laptop. You can read eBooks or newspapers much more easily in 'portrait' mode. When you turn the iPad around it automatically shifts from landscape to portrait, like the iPhone.
3. Pricing: starts at $499, way below many estimates of $999. With 3G built in so you can use it on the go it costs $629 for the base model. If you want to use the built in 3G capability you need to buy a monthly allowance, priced from $14.99 a month with AT&T in the US.
4. iBook store: easy and intuitive to shop. Can this do for eBooks what iTunes did for digital music?
5.Decent sized 'virtual' keyboard: makes it good for doing email on the go
The big question:"device-fatigue" can people really make room in their life for one more device? Personally, I have a MacBook and an iPhone. Do I really need an iPad? Its bigger than I was expecting, so feels like a small laptop. And its one more device to sync, charge up, carry around. I'm not sure.
But I guess another way of looking at it is for people who don't have a laptop, or who are ready to replace one with an iPad. Compared to a laptop Its smaller, lighter and has excellent claimed battery life of 10 hours. The starting price point of $499 is very accessible. And there are 75million people who have an iPhone or iPod Touch. That's already a big group of people who they can target.
So, not for me perhaps. But it could still be a hit.
What do you think?
January 27, 2010 Comments (0)
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26 Jan 2010 11:48
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25 Jan 2010 13:05
Apple's iSlate is a marketing masterstroke: before its launched
There is a frenzy of speculation and anticipation ahead of this Wednesday's big Apple launch, when Steve Jobs is expected to unveil the iSlate, a "tablet" computer. Think a big iPod Touch that you can use to watch videos, read ebooks, do email etc.
A search on google throws up almost 6million results. This is before the bloody thing is even launched. The Times today calls it the "Jesus Tablet", as it is hoped to be the saviour of the newspaper and book industries, persuading us to buy sexier eBooks and digital magazines. In addition to the thousands of tech and gadget sites guessing what it will be like, there's even a dedicated site for rumours, islate.org.
Here's what Apple do so well with these sorts of launches:
1. Build brilliant products: all this buzz and excitement comes from Apple's track record in creating amazing products like the iPod and iPhone. The Times predicts that "It is likely to leave first-time users with that sense of open-mouthed awe at technology that combines cleverness with simplicity, that sense of being a South Sea islander seeing a mirror for the first time"
2. Total secrecy: all the news and gossip so far is speculation. Apple go to extreme measures to keep new products secret. The Times reports that "Software engineers disappear off the map while they develop the product. Employees in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them".
One website, Valleywag, was so desperate for pictures of the iSlate that it offered $10,000 for photos of the device. They said “We’ve had enough of trying to follow all the speculation. We want answers, dammit! And we’re willing to pay.” Apple's lawyers promply sued Valleywag, creating even more PR coverage.
3. Pre-launch partnerships: Apple are following the successful profit-sharing model that worked so well with the app store. They are striking deals with publishers, offering them the majority of the revenue stream. Apple win by having great content that makes their device a must-have, and by getting a new source of income from selling content that it costs them nothing to create.
I for one am looking forward to the launch. It'll be good to see Steve Jobs back in action after his absence caused by illness. And my guess is the iSlate will be the must-have gadget of 2010.
January 25, 2010 Comments (1)
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