The Marketer’s December Task: Look Back

December 16, 2014

We are just a few weeks from the end of the year. This is an important time for marketers to take a look at the business and reflect on how things have gone.

Business leaders don’t devote much time to looking back. There is constant pressure to update the plan and execute, so people tend to work on the future.

This is a missed opportunity.

By studying the year gone by, we can assess what happened. This sets the stage for the future. If you don’t have a good sense for what has happened, it is difficult to create a great plan going forward. All too often last year’s marketing plan looks a lot like this year’s plan. One reason for this is that the manager didn’t really figure out what worked and what didn’t. As a result, if an idea seemed promising last year, it probably still seems promising this year.

This is the perfect week for reflection. People are in the office; Christmas is still more than a week away. Vacation awaits but it isn’t here yet. Things are quiet; this isn’t a big week for serious meetings. Some people will be ducking out to attend a school concert or end of year show. With time and little pressure, it is a good moment to look at the year gone by.

You should ask yourself three simple questions.

First, how did things go? Go back to the marketing plan you wrote at the start of the year. I’m assuming you have one. If you don’t, then that is one thing you might want to consider when answering question three. Did you execute the plan and achieve your goals? Or did you fall short? It is important to answer the question honestly; this isn’t a time to blame outside factors or put a positive spin on things.

Second, what worked? I’m confident that some of the things you did this year went well, even if the business didn’t deliver great results overall. Think about using some analysis to assess various initiatives and tactics. Once you’ve identified something that worked, consider why it worked. Did you tap into a customer insight? Did the program provide an unexpected lift? Why?

Third, what didn’t go so well? People don’t like asking this question. There is a tendency to gloss over it, especially if overall results were positive. But this is perhaps the most important question to consider because it has a significant impact on next year’s plan.

These three questions set up the plan for next year: you want to build on what worked, change what didn’t and set realistic goals that reflect your momentum.

GoDaddy, Great Brands and Risk

December 2, 2014

GoDaddy announced last week that it will be advertising on the Super Bowl again in 2015.

The announcement was not a surprise; GoDaddy has used the Super Bowl effectively to build its brand over the past decade. This will be its 11th appearance.

GoDaddy also announced that its Super Bowl ad will feature a cute puppy.

A cute puppy?

From GoDaddy?

What?

Animals are a staple of Super Bowl advertising. Puppies and horses have broad appeal. If you want to connect with lots of people, feature some cuddly animals in your creative. We will probably see a zoo’s worth of critters on the Super Bowl this year.

But the creative idea is unexpected coming from GoDaddy.

The basic concept behind most of GoDaddy’s Super Bowl advertising over the past decade has been to shock people by showing attractive, buxom women in revealing attire. The company would then pair the Super Bowl ad with a longer web version with more content. Many years, GoDaddy would announce in early January that the network had rejected its first ad due to the risqué material.

GoDaddy

This approach was controversial. Many people attacked the company for the creative concept, accusing GoDaddy of using sex to sell.

Despite the controversy, it worked; GoDaddy became the most recognizable brand in its space, now worth billions of dollars.

In 2015, GoDaddy will be taking a very different approach. GoDaddy is going from being one of the most controversial advertisers on the Super Bowl to using one of the safest creative ideas.

The move makes sense in many respects but I suspect GoDaddy won’t see the same sort of impact. Being safe is, well, safe. But it is hard to stand out when you are safe. The brands people notice are often the ones that are different, the ones that take risks.

This is one of the great challenges in branding. Being safe does not often create a distinctive, unique brand. GoDaddy is apparently being conservative in 2015. The question to ask: will people remember the brand after the game?

 

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:

http://www.huffingtonpost.com/tim-calkins/weak-demand-for-super-bow_b_6187644.html

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:

http://www.huffingtonpost.com/tim-calkins/a-skyscrapersized-risk-fo_b_6102604.html

 

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.

 

Ameriquest

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.

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

 

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.

*   *   *

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: www.kellogg.northwestern.edu/execed/programs/brand.aspx

 

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.


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