Kicking off the Super Bowl Advertising Season

November 19, 2014

The Super Bowl is just over two months away. Once again, Derek Rucker and I will be leading the Kellogg Super Bowl Advertising Review. I’ll be posting about Super Bowl ads in the weeks leading up to the game.

Super Bowl 2015

Last year Derek and I had a dedicated blog for the event. This year, I’ll post our thoughts here.

The Super Bowl is, without a doubt, marketing’s biggest event; you can learn a lot about the state of the marketing world by watching how companies approach the game.

Demand is soft for Super Bowl ads this year. I talk about that in my latest article, which is in the Huffington Post today. Here is the link:

Wallenda, Chicago and Branding

November 7, 2014

Chicago built its brand this week by hosting Nik Wallenda’s high-wire walk across the city. You can read my perspective on it in the Huffington Post.

Here is the link:


Wallenda in Chicago

Four Scary Spots

October 30, 2014

It is Halloween, a day for frights and spooky scenes. So here are four exceptionally scary ads to consider.


Dale Carnegie

This is truly a frightening ad. The setting is all too familiar: someone with a gun and a mask. While the setting is a bank robbery, it feels like a school shooting. This is any parent’s worst nightmare.

The idea that a company would use the scenario to build sales is equally scary.


Home Away

I wonder how this spot was approved. It is disconcerting to think of a baby being abused in such a fashion. It is also disconcerting to think that a company hoping to win over moms would decide to spend millions of dollars to show the ad to the a large portion of the country on the Super Bowl.


Mini Cooper

This spot could actually be a suburbanite’s nightmare: the attack of the shopping carts. It builds on the classic fear that the carts will come zooming at your car.

Happily, the Mini Cooper saves the day. With exceptional handling the car avoids the threats. It triumphs over the malicious carts and, in the process, builds its brand image and drives sales. This is a Halloween spot that works brilliantly well.



This might be the best Halloween spot of all time. The creative speaks for itself. The weak branding and fundamentally flawed strategy locks up the award.

Pharmaceutical Pricing, Markets and Ebola

October 17, 2014

People love to attack pharmaceutical companies for setting high prices. Dr. Sharon Levine, for example, an executive from Kaiser, recently criticized the $84,000 price of Solvadi, Gilead’s new hepatitis C drug, noting, “It’s an outrageous price.”

The problem is that the reason firms invest in developing new drugs is that there is an opportunity to set a high price and make a lot of money. If pharmaceutical companies can’t generate significant profits, then they won’t invest in R&D.

Pricing is particularly important when it comes to diseases with small patient populations. If you can’t charge a lot, there is no way to justify doing a big clinical trial on a product with only a few potential customers.

When there isn’t an opportunity to make money, companies don’t invest. This is one reason why we don’t have a treatment for Ebola.


For many years, Ebola broke out occasionally in just a few small villages in Africa. Scientists knew Ebola was a terrifying disease with the potential to spread quickly. Companies, however, didn’t invest in R&D for Ebola because there wasn’t much of a market. There were only a few customers. More important, companies couldn’t set a high price; most people and governments in Africa simply don’t have the resources to pay a lot for new therapies.

People should be careful about making snap judgments on the price of medical innovations. The easy answers, capping prices or refusing to pay for expensive treatments, will slow down medical research and innovation.

Rebranding India

October 8, 2014

India Prime Minister Narendra Modi recently wrapped up a triumphant visit to the United States

  • He joined Barack Obama for dinner at the While House.
  • More than 18,000 people filled Madison Square Garden to see him speak.
  • He appeared with Jay Z, Beyonce and No Doubt at the Global Citizen Festival.
  • Top executives form PepsiCo, Goldman Sachs, Google, Boeing, BlackRock and others met with him to discuss investments in India.
  • He addressed the United Nations General Assembly.

It is hard to see what else Modi could have done during his visit. The man was everywhere.




Modi is a gifted brand builder. He has a compelling story, he understands the power of brands and he appreciates the importance of symbolic gestures.

India needs a leader like Modi because its brand is troubled.

People are quick to group India with other emerging markets. It is, after all, one of the BRICs. Like China, India is an enormous country and presents a remarkable opportunity for growth. There are areas of India where the potential seems to be coming to fruition. The IT sector is a notable success.

The problem is that India also has negative associations for investors, especially manufacturers. The political system is complicated. Securing permits to build is hard. Power is unreliable. The transportation network doesn’t work well. Even getting a visa is difficult.

The result is that India is not a big player in terms of global manufacturing. While labor is inexpensive, companies don’t invest as much as they could. According to an article in The Diplomat, India makes up about 2% of global manufacturing. China, by contrast, accounts for over 22%.

This is a huge problem for India. The population is growing quickly and the country needs direct foreign investment to spark manufacturing investment and provide jobs.

Some of this is reality and some is perception. The perception matters most; companies can overcome logistical challenges but they won’t even try if they think it is a hopeless task. As long as business leaders believe India is a difficult place to invest, they won’t take action.

This is where Modi can have an impact. One of his key messages is that he believes in change and investment. He recently launched a new campaign encouraging the world to “Make in India.” He committed to simplify the regulatory process. It is a compelling story.

Improving business conditions in India won’t be easy. It will take government policies and motivated companies. Modi’s leadership is a critical first step.

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This week I am working with forty brand leaders in the Kellogg on Branding program. It is a terrific group. There are participants from sixteen countries and a remarkable range of industries including hospitality, consumer products, chemicals, financial services, technology, fashion, entertainment and non-profits. The program covers everything from positioning to global branding to brand measurement. The next session is in May, 2015. You can learn about it here:


Special thanks to Nidheesh Patel (Kellogg ’16) for his contributions to this post.

Defending Air France

September 30, 2014

Air France, one of the world’s great airlines, is under attack. The recent two-week pilot strike was a financial and customer service disaster. The bigger problem is that Air France appears to be unable to defend its business; new competitors are stealing customers at an alarming pace.

The financial results for Air France – KLM have been terrible. The company lost €814 million in 2009 and things have gotten worse since then, with losses of €1,559 in 2010, €589 in 2011, €1,028 in 2012 and €1,705 in 2013.

Air France

The basic problem is that Air France is facing very tough competition. In Europe, discount carriers such as EasyJet and Ryan Air have become dominant players. Air France – KLM has lost share; people simply aren’t willing to pay more for a short flight. How bad can a fifty minute flight to Düsseldorf be?

On long-haul routes, where business travelers are still willing to pay more, carriers such as Emirates and Qatar are stealing share with a unique, premium product.

This is a classic case of an established, comfortable company failing to react to competitive threats. In the 2000s, the head of Air France believed the discount carriers would stumble so he didn’t see the need to respond. Employees focused on protecting their benefits and wages, even as the company lost money.

So Air France didn’t defend and now the carrier is in trouble.

The company’s most recent strategy has two parts. To compete for travelers in Europe, Air France will expand its discount brand, Transavia. By doing this, Air France – KLM will be able to slow the growth of discount carriers. At the same time, the company will use the Air France brand to compete for international travelers, where service is critical and passengers are willing to pay for quality service.

I’m skeptical of the strategy. Transavia is a late entrant to the discount air market in Europe; it won’t be easy to steal share. And it will be difficult for a premium airline like Air France to run a discount division.

Things aren’t going too well so far. After learning about the new strategy Air France pilots, concerned about potential wage cuts, went on strike and shut down the airline for two weeks. Faced with massive losses and unhappy customers, Air France on Thursday announced that it was scaling back the new plan. On Sunday the pilots agreed to return to work but the labor dispute is still not settled. Look for more employee conflict ahead.

Fighting tough competitors is not easy but in a free market if you can’t push back new entrants you will lose share and struggle. The employees at Air France – KLM can do more work for less money or they can see jobs vanish. The company cut 8,000 workers in the past several years. With current trends, there are more cuts ahead.

The NFL Stumbles

September 22, 2014

The NFL is dealing with a significant brand crisis. How is the league doing at managing it?

To evaluate the situation, I turned to Daniel Diermeier, dean of the Harris School of Public Policy at the University of Chicago and until recently a colleague of mine at the Kellogg School of Management. Daniel studies how companies and brands deal with crisis situations. In his book Reputation Rules, he explained that people look for four things when evaluating organizations: expertise, transparency, empathy and commitment.

Using this framework, we can assess the NFL’s response to date.


Expertise: Not Good

The NFL is not doing well in the area of expertise.

The league gave Ray Rice a modest two game penalty for knocking his fiancé unconscious in an elevator and dragging her out into a hotel hallway, then, after TMZ released the video, dramatically increased the penalty. The Minnesota Vikings reinstated running back Adrian Peterson, accused of child-abuse, and then reversed course when sponsors complained. San Francisco 49ers’ Coach Jim Harbaugh continues to play Ray McDonald, who was arrested in August for assaulting his fiancé.

About the only thing everyone can agree on is NFL Commissioner Roger Goddell’s statement at his news conference on Friday, “We have seen all too much of the NFL doing wrong.”


Roger Goddell


Transparency: Not Good

What did the NFL know about Ray Rice and when did the league know it? How precisely did the NFL decide that a two games suspension was an appropriate penalty? Why did it then change the decision? Why does San Francisco seem to have a different set of standards than others in the league? Who sets the rules in the NFL?

These are all important and unanswered questions.

Commissioner Roger Goddell said on Friday that he had not considered resigning. This simply cannot be true.

The NFL is not doing well on transparency.


Empathy: Not Good

Does the NFL really care about player behavior?

The league is definitely worried about viewership and money. Is it really concerned about the example it is settling for children in the country?

Did Roger Goddell deliver a heartfelt apology on Friday? No. Have any of the NFL owners taken the lead on this? No.


Commitment: Not Good

Is the league determined to make significant changes? On Friday, Roger Goddell said it was.

The problem is that people don’t seem to believe him. Most commentators think the NFL will simply play on and hope this all fades away.


Overall, the NFL is struggling to respond effectively to the crisis.

The team owners need to step up and honestly react to the problem. They don’t need a final answer; they just need to be empathetic and transparent, and demonstrate commitment. A good first move would be asking Goddell to step down.


Apple’s Competitive Challenge

September 15, 2014

Last week Apple rolled out a trio of new product platforms: iPhones with larger screens, a watch and a payment system.

The new phones are not dramatic innovations; they build on existing technology and will help Apple keep pace with competitive offerings. The watch and payment systems are bigger innovations. They are both trying to change the rules.

So will the new innovations work?

I suspect this will be a challenge. One issue is that changing behavior is difficult. It is hard to get people to rethink a watch or how to buy things. Another issue, and a bigger problem, is that Apple is fighting some capable, driven competitors.

Apple has always had competition: Microsoft, Motorola, Nokia, Dell and others. The difference is that Apple’s competitors are now more aggressive. Over the past decade, many executives dismissed Apple’s innovations. This was not wise. Competitors won’t make the mistake again; I don’t think there is a company in the world that would dismiss Apple today.

This means that competitors are going to defend; they will attack Apple and respond to the innovations. Financial institutions will push back against Apple’s payment system. Pay Pal is already responding. Technology companies will react to the watch and larger screen iPhones.

It took Samsung just one day to release a series of videos mocking Apple’s new products.




Apple is an innovative company with a track record of success. Apple’s competitors know this. They will react, defend and make life very difficult for Apple in the coming year.

Debating the CVS Tobacco Decision

September 8, 2014

CVS was in the news last week for its decision to drop all tobacco products and rebrand itself CVS Health. The company actually announced the tobacco move earlier this year. Last week it celebrated that it was officially tobacco free.

CVS Health

The company is making a big deal of the tobacco decision, rolling out a fully integrated marketing campaign with advertising, events, social media, PR and in-store activities.


CVS Twitter


My friend John Barker, head of the dynamic ad agency BARKER, wrote that CVS should be named marketer of the year for its move. He explained his thinking in a recent Facebook post:


There’s a saying that goes, “It’s not a principle until it costs you something.” Well, CVS paid plenty today for taking a powerful and courageous stand to align its actions with its brand mission. Their decision to stop selling tobacco products will reportedly cost them around $2 Billion a year.

So how can this be good for business?

The answer lies in the years to come, but from a marketing perspective, by shunning the single most dangerous consumer product in the world, they have put their money where their mouth is in a way few brands ever do. This is no “Warning Label” cosmetic makeover or greenwashing CSR strategy. This is one big business telling another big business to bugger off and die. The momentum and hard-earned authenticity of the decision allows CVS to rightfully claim the high ground as a Healthcare Solutions Provider, not a glorified convenience store nee pharmacy nee small grocery nee copy center. In other words, they have created enormous new “white space” around their brand, allowing the possibility if not the inevitability of extending into urgent care and other vertical plays that will organically drive its other sales. They become the doctor, the pharmacist, and the neighborhood center for all things health-related and/or tangentially associated. It’s kind of like the theory of having a gas station on every corner, except they’re all called CVS.


Regular readers of this blog will recall that I was skeptical of the decision when CVS first announced it. Despite John’s thoughtful endorsement of the idea, I’m still not convinced it is a marketing triumph.

CVS is smart to focus on playing a big role in healthcare. I think the company is positioned for success; as people deal with high deductibles, they will look for cheap options and self-treatment. CVS can help with both.

Building the CVS brand is important. The company needs to move from being a pharmacy to being a trusted healthcare provider. This is not a small transition.

I’m not convinced dropping tobacco products is the right thing to focus on for building the CVS brand. It is an expensive move; CVS is losing revenues of $2 billion a year. Tobacco sales probably generate a reasonable gross margin, perhaps 30%. If so, the move has a financial impact of about $600 million a year.

The bigger question: how precisely does dropping tobacco add financial value?

It should be a non-event for people who don’t smoke. It is a slight negative for people who used to buy tobacco products at CVS. It isn’t likely to dramatically boost employee morale or improve retention. People won’t line up to apply for jobs at CVS now that the company doesn’t sell tobacco products.

It certainly won’t have an impact on smoking rates in the country. People aren’t saying today, “Well honey, now that CVS isn’t selling cigarettes it is time for me to kick the old habit.”

The bigger question: is this the best way for CVS to spend $600 million a year?

I suspect not. For that amount of money, CVS could dramatically boost its advertising. It could invest in store design. It could add services that people really do value. It could test different ways of managing in-store clinics. It could fund an enormous public health program.

CVS deserves credit for thinking long-term, focusing on branding and strategically shifting to embrace the potential of healthcare. But the company should invest its resources on things that create meaningful value for customers.

*   *   *

Starting this week, I will be posting on this blog every Monday. Or at least that will be my goal. You can sign-up to get the weekly updates.

Feel free to send along potential topics. My email is

This week I am heading to Moscow to teach a corporate program. It is certainly an interesting time to be visiting Russia. Next week I will be back in Evanston to teach a corporate program at Kellogg. Fall semester classes begin the week after. Things are getting busy now that summer is behind us.

Rebranding the Tata Nano

August 28, 2014

The Times of India reported this month that Tata will soon phase out the Nano and relaunch the vehicle as the Tata Smart City Car.

The move makes a lot of sense.

The Nano was a bold new product. Tata launched the car in 2009 in India and positioned it for lower-income families. It was, and remains, the cheapest car in the world, with a price of about $2,000. Instead of comparing to other cars, Tata focused the Nano on competing with motorcycles.

Tata made a number of moves to keep costs down. The engine is small; it takes the Nano a full eight seconds to accelerate from 0 to 37 MPH. The car has just one window washer. The trunk only opens inside the car.


While industry executives anticipated that the Nano would transform the auto industry, the car flopped.

One of the big issues was branding. People quickly understood that Nano was exceptionally cheap. This diminished its appeal; a family with a rising income doesn’t want to buy the cheapest car available. It wants a car they can be proud of and feel good about. And after several high-profile car fires, the Nano developed a reputation for being unreliable.

Nano’s basic proposition just didn’t work. People could buy a motorcycle for less money, or buy a used car for a similar amount. Either way they could get around and feel good about their means of transportation.

When a brand develops negative associations there are only two possible solutions: reposition or replace. Repositioning the Nano would have been a challenge. The brand received enormous attention during its launch. All the attention, however, became a problem when the stories turned negative.

Replacing the Nano makes much more sense. By introducing the Smart City Car, Tata starts fresh. The name alone is a step forward. Nano means tiny, which is not a positive in a car. Everyone wants to be smart.

Deciding to phase out a brand is not easy but sometimes, as in the case of the Nano, it is definitely the best move.


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