Archive for February, 2013

Four Remarkable Quotes

February 25, 2013

There is a terrific article in The Wall Street Journal today about J.C. Penney. It is worth reading. Here are four noteworthy quotes from the story.

 

“We didn’t test at Apple.”

Apparently this was CEO Ron Johnson’s response when asked if he would consider testing a radical pricing change at J.C. Penney before rolling it out.

There are just two problems with this comment. First, J.C. Penney isn’t Apple. Second, Ron Johnson isn’t Steve Jobs. When you are considering a major business move it is always good to study and test the idea. You have to use the results carefully, since people don’t always know how to evaluate innovations, but getting customer input helps.

J.C. Penney went forward with the proposed pricing change and results were dismal.

Apparently Steve Jobs didn’t do a lot of testing. From that we can conclude that Steve Jobs didn’t do a lot of testing.

 

“I hated the J.C. Penney culture. It was pathetic.”

This quote is from J.C. Penney chief operating officer Michael Kramer, a former Apple executive.

An observation: it is always easy to criticize a company but calling your employees pathetic is not a smart way to build loyalty and enthusiasm.

 

“That’s not a sale. It’s an in-season mark down or a new lower price.”

Revenue at J.C. Penney dropped like a stone after the company eliminated sales. Not surprisingly, J.C. Penney is now running sales. Only Ron Johnson, quoted above, won’t call them sales, which is a little odd.

 

“No, of course not.”

This is Ron Johnson’s response when asked if he would have done anything differently at J.C. Penney.

The comment indicates Johnson has trouble recognizing when he made a mistake. The first step in delivering better results is realizing when things aren’t working. Johnson’s comment is not a good sign.

 

It isn’t surprising that the team leading J.C. Penney’s turn-around has struggled to date. Making radical changes without testing, criticizing a team and refusing to admit mistakes are not leadership best practices.

 

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The second edition of my book Breakthrough Marketing Plans is now available. The new edition has more and updated examples. The core concepts remain. You can find the book on Amazon here:  http://www.amazon.com/Breakthrough-Marketing-Plans-Wasting-Driving/dp/0230340334/ref=dp_ob_image_bk

 

 

Solving the OfficeMax / Office Depot Branding Problem

February 18, 2013

News outlets are reporting today that OfficeMax and Office Depot are apparently considering a merger.

The move makes sense for many reasons. The combination will result in significant cost reductions. The new entity will have a stronger negotiating position with suppliers. And competition in the brutal office-products industry will decrease at least a bit.

The biggest benefit, I suspect, will be branding.

OfficeMax and Office Depot have long had a simple problem. The names are so similar that people get them confused. The stores are similar, too. I suspect many people visit OfficeMax and walk out thinking they just went to Office Depot, and vice-versa. One of the stores is very near my house. I visit it often but I have no idea which one it is.

This is a major problem for the companies. Differentiation is critical; you have to be unique to justify premium pricing. But how do you differentiate a brand when consumers constantly confuse you with your competitor?

The beauty of the merger is that it ends the confusion. One brand will emerge when the dust settles.

This is really the only way the branding situation could end happily. In theory, one of the companies could have moved to a different brand but this wasn’t likely to happen; the company that made the change would have incurred significant costs while the company that didn’t change enjoyed significant benefits. A merger, though, is a solution that benefits both companies.

Over the next few days analysts will calculate all the cost savings that will come from this merger. The biggest benefit, however, is the resolution of a difficult branding problem.

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The next session of the Kellogg on Branding executive education program is April 28 to May 3. I’m finishing up the schedule this week; it will be a terrific program. To learn more about it you can visit the course page here:  http://www.kellogg.northwestern.edu/execed/Programs/BRAND.aspx

Kellogg Super Bowl Advertising Review: 2013 Results

February 4, 2013

It is clear that advertisers know everyone is watching the Super Bowl. Super Bowl XLVII featured ads that were broadly appealing, safe, and focused on delivering a brand message. The tradeoff, of course, is that it is hard to be distinctive and safe at the same time. This year we saw a lot of ads that worked well but won’t be remembered years from now.

There were two notable trends this year. First, advertisers ran long spots. Many developed sixty-second spots and Jeep, Dodge and Samsung ran spots lasting two minutes. Marketers are recognizing the power of stories to engage people and build brands. It takes time to tell an engaging story.

Second, social media reached a new level. Most Super Bowl advertisers had elaborate campaigns before the game and several were active during the game itself. Oreo, Tide and other brands tweeted about the blackout, demonstrating an ability to react quickly to developments in the world. One of our favorite tweets was from SodaStream, which signed off after the game with this comment:  “Hope you all enjoyed the game! We’re signing off before we have to see that Go Daddy commercial again.”

A group of almost sixty Kellogg students watched the Super Bowl in Evanston and evaluated all the spots. Here are some of the grades and highlights.

 

 

The Best

Tide (A)

Tide topped the list this year with a very engaging spot about a Joe Montana stain. Going into the game, we weren’t sure the spot would do well since the branding is late; Tide shows up just at the end of the commercial. But the ad had tremendous breakthrough. In addition, since the ad focused on a stain people quickly connected it to Tide, the clear category leader. This sort of ad wouldn’t work for a smaller brand but for Tide it is a huge win.

 

M&Ms (A)

M&Ms almost won the review for the second year in a row with a spot that had very strong branding and breakthrough. From the first second it was clear this was a spot for M&Ms. The ad was clever and engaging; it quickly got people’s attention and kept it.

 

Best Buy (A)

Best Buy has run Super Bowl ads for several years. This was its best year; Best Buy’s ad featuring Amy Pohler was one of the top spots in the Kellogg Super Bowl Advertising Review.

The spot had strong branding; it was very clear this was an ad for Best Buy. The ad also communicated a benefit: great service. It got attention and was very distinctive.

 

Jeep (A)

Chrysler’s Jeep ad was one of the most emotional and somber spots on the game. The ad ran during halftime, right after the Beyonce’s half-time extravaganza. The rather jarring contrast attracted attention, reminding people that even as they enjoy the game there are service men and women all over the world serving our country.

The spot worked for Jeep; it touched the brand’s historical roots and gave the brand meaning and importance.

The joint Jeep – USO branding was curious. This reduced the chance Jeep would be accused of opportunism but might have diluted the branding to some degree.

 

Wonderful Pistachios (A)

Wonderful Pistachios ran a terrific spot featuring Psy and his Gangnam style dancing. The ad was distinctive and very well branded. The line “Get Crackin’ Gangnam Style” was a triumph.

Wonderful Pistachios focused on the category of pistachios more than the merits of Wonderful Pistachios over other competitors. The strategic clarity kept the spot simple and focused.

 

Axe (A)

Unilever’s Axe brand ran an insightful spot about men, women and astronauts. The brand found a way to build on its historical equity and keep things interesting and fresh.

 

Strong Performers

Samsung (B)

Samsung made an interesting choice with its spot on the Super Bowl; the brand decided to run fresh creative, not its highly successful ads attacking Apple and Blackberry.

The ad worked; it was distinctive and communicated clearly that Samsung was indeed the next big thing.

An interesting side note: Kellogg student Sam Sung approved the use of his name in the spot.

 

E Trade (B)

The E Trade baby returned this year with another solid Super Bowl spot. The message this year was clear: keep retirement account fees low with E Trade. Branding was solid; using the baby means people immediately know who the ad is for. The ad didn’t have quite the magic of some E Trade’s earlier spots but it still finished near the top of our rankings.

 

Audi (B)

Audi had a distinctive spot with a clear benefit: driving an Audi makes you confident and brave. Audi relied on consumer input to select the ad’s finish. We are curious why none of the options showed the girl traveling with the brave fellow in the Audi.

 

Taco Bell (B)

A solid spot for Taco Bell featured old folks acting young. The insightful ad dramatized youth as a mindset. Taco Bell embraced an emotional benefit; the ad didn’t talk at all about specific menu offerings or food quality.

 

Mercedes (B)

An interesting move by Mercedes: highlighting the brand’s surprisingly low price. The point came across. We wonder if this is where Mercedes should focus.

 

Speed Stick (B)

Speed Stick’s spot on the Super Bowl worked well; it was distinctive and got the point across in a humorous fashion.

 

The Low Scoring Spots

BlackBerry (D)

BlackBerry received the lowest score from the Kellogg panel this year. This is unfortunate because BlackBerry really needed a strong performance to reverse the brand’s negative trends.

There were two big problems in the BlackBerry spot. First, branding was weak; it wasn’t clear who was advertising. Second, there wasn’t a benefit; the spot talked a lot about what the product didn’t do but little about what the device could do. Why should we use a BlackBerry? We wish they had given us a reason.

 

Lincoln (D)

Lincoln also needed a big year on the Super Bowl but fell flat. The brand showed an attractive car. Unfortunately, the Super Bowl is full of ads featuring attractive cars.

 

Go Daddy (D)

One of the factors the Kellogg panel considers is amplification. The question: what will people remember from the spot? Is this positive or negative?

Go Daddy had a distinctive spot but negative amplification; people found the kiss to be disconcerting. The extended play version posted on-line was even more disturbing for those who went to see it.

 

Subway (D)

Subway ran some fine spots on the Super Bowl; the branding was clear and the message distinctive. Most days, this would be fine. On the Super Bowl, however, standards are higher and the Subway ads just didn’t measure up so suffered in terms of getting attention and being distinctive.

 

Calvin Klein (D)

In 2012 we saw the male form displayed by H&M. This year we saw it showcased by Calvin Klein. The spot was distinctive but didn’t resonate with the Kellogg panel.

 

Other Notable Spots

Budweiser (C)

One of the top ads on the Super Bowl was Budweiser’s Clydesdale ad. What a remarkable piece of film; in just sixty-second, Budweiser told a very complicated story but everyone could follow it. We showed the ad to a seven-year old girl one time and she then immediately played back the entire story in great detail, both what happened and the emotions involved.

The Kellogg panel scored the Clydesdale spot as one of the very best on the game this year. Unfortunately, the other spots for Bud and Bud Light were not as effective; this brought the score for the Budweiser brand to a C.

 

Dodge (C)

The ad we’d most like to see again is the spot from Dodge featuring Paul Harvey talking about farmers. The spot is deep and emotional.

The power of the Dodge ad is that it gives the brand soul; it really connects Dodge to rural America and traditional values. This is strategically brilliant. Chrysler has clearly defined the Chrysler brand as an urban brand and the Dodge brand as a rural brand.

The spot fell in the middle of the pack with the Kellogg panel; it wasn’t clear that people connected the creative to the brand and there were some concerns as to whether the brand took too much time to share its message.

 

Mio (C)

Kraft’s Mio took aim at Gatorade in its Super Bowl ad. The spot showed how to use the product and set a clear frame of reference. The ad would have scored better with a stronger benefit: why use this product, again?

 

Cars.com (C)

Cars.com has been a consistent Super Bowl advertisers; the brand has run solid spots over the years. This one worked well but didn’t break into the top of the rankings. Still, with the brand’s aggressive integrated marketing effort supporting the ad we suspect the overall impact might be very positive.

 

Final Thoughts

Super Bowl advertising is only getting to be more important; it has a unique role in the marketing calendar. Social media will play a big role again next year.

The challenge for marketers is to be safe but not too safe. The spots that live with us forever as blockbusters in the Super Bowl advertising hall of fame are those combine exceptional strategy and creative brilliance.

Six Brands to Watch on the Super Bowl

February 1, 2013

There is a lot to see on Sunday’s Super Bowl: more than 50 commercials, each one costing well over $3 million and a big half time show featuring Beyonce. Oh yes, and there will be a football game. With all this advertising excitement it is easy to forget that part.

Every commercial provides an interesting story, even the clunkers. So pay attention to the ads. Remember that behind each spot there is a team of people that has worked exceptionally hard to create an impactful piece of communication. Of course, effort only goes so far. How did they do?

There are six brands that are particularly worth watching this year.

Chrysler: In 2011 and 2012 Chrysler stunned people by running unexpected ads that really broke through the clutter. The pressure is on this year to do it again. As in prior years, Chrysler hasn’t said anything about its plans for the game. What will it run? How does it follow the remarkable spots from 2011 and 2012?

Samsung and Blackberry: Two electronics giants will battle it out on the game. Blackberry has a thirty-second spot and needs to have a big impact to jump-start its turnaround plan. Samsung has two minutes and a terrific campaign to build on. Will Samsung crush Blackberry?

Mio: Kraft is looking to accelerate growth on Mio, its innovative water flavor enhancer. This is a tough creative challenge; most people don’t know Mio (what do you call that stuff, anyway?) so Kraft has a lot of explaining to do. How well will the spot work?

Lincoln: Ford is trying to rejuvenate Lincoln. The Super Bowl is critical in this effort. Does the brand break through the auto clutter? Or will Lincoln’s spot (and brand) be lost?

Budweiser: The biggest Super Bowl advertiser is Anheuser-Busch. For years AB dominated the ranking with the most popular spots. Will AB deliver this year? The popular Clydesdales figure prominently in at least one spot so that is a strong start.

It will be a fascinating day of advertising and marketing strategy.

And there will be some football, too.

I’ll post results from the Kellogg Super Bowl Advertising Review right after the game.

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Next week I will be speaking in San Antonio. I’m back in Chicago later in the week and will be reviewing the 2013 Super Bowl spots with the Harvard Business School Club of Chicago. If you’d like to join that event you can sign up here:   http://www.hbsclubchicago.org/events.html

 


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