The Brand Man Speaks

JC Penney fires President as result of brand restructuring failure

JC Penney's has fired its 8 month old President, formerly from Target, after the re-branding effort for the middle market department store failed.

Why is anybody surprised?

I wrote in this blog shortly after Penney's launched its new pricing policy along with a Target copycat style brand ad campaign that it was not going to work. The President who was fired got a signing bonus of $1.2 Million. Are you kidding me? Any well-trained and experienced brand marketer could have saved Penney's a ton of money by telling them their "new" strategy would fail miserably and why. I must also note that the CEO Ross Johnson who came from Apple is equally at fault but makes his brand division Pres the fall guy.

The bottom line is you can't take an old old brand that has been middle to lower market for years with price being its key benefit (and no real brand positioning that I could detect) and try to give it a brand makeover that mimicks one already around (Target) and creates a overly complex pricing scheme that is supposed to make understanding what things cost easy but does just the opposite. It was also supposed to move the needle away from just a pricing positioning to a lifestyle one, but the lifestyle approach and the pricing posture collided on day one in my opinion.

Let's see how long Johnson remains. Apple's retail experience was built from scratch the way they wanted it. That's the cred that Johnson brought to Penney's. The problem is Penney's retail concept has been floundering around for years and changing it can't be done quickly and by assuming you just forget the past and start with something completely new.

This surely will become a great B school case study in the near future how NOT to rebrand a major retailer. The real question now is will JC Penney's survive or die a slow death?

Watching out for you everyday.

Eli

 

Why Facebook users won't use advertising: It's elementary Watson

I remember my first Facebook. The one I got as a freshman in college that shares all those high school pictures of my fellow first year colleagues along with their hometowns, high schools and interests. Things have come a long way since that Facebook.

Today's Facebook maybe be technologically a far from the original concept but the idea remains somewhat similar. Gaining a familiarity with old friends and new, sharing information of relevance to you your friend and a similar group. Learning a little or more than just a little about a friend or acquaintance. In the number of years Facebook as we know it today has been around it has become this community of sharing, sharing with friends to the point of an addiction. As companies tried to figure out how to use the resource to "sell" they found FB users ignored them unless there was some great offer or discount if you acknowledged you "liked" them. But did users (do users?) really care about the commercial entities they liked (and still "like" today?)? No, not really.

I "like" certain companies like millions of FB users do. But I do it only for something in return and it doesn't mean I have any interest in that company beyond the "deal" and it certainly doesn't mean I am brand loyal. Definitely not. It's like a newspaper coupon. A cheaper price on something I might want to buy. Pure and simple. Or access to something you might want but don't want to wait for or pay for.

The bottom line is Facebook remained a virtual non-commercial entity for a longer period of time than a new consumer product would have had its management been motivated by profit. Now that the concept has been around for a while finding ways to provide good return on investment for companies spending millions trying to reach the 900 million FB users is going to be virtually impossible. FB users have lived without interruptive ad messages (like ones on radio and TV and other online sites from newspapers to dating sources) and do not have a "space" in their "like" book for more advertising involvement. The environment is not ad friendly, the users are not ad interested.

It is similar to what has happened at retail. Once the Xmas holiday shopping game became driven by sales and discounts it became nearly impossible for retailers to wean consumers off the special pricing. When stores try to go full price, consumers balk. They like what they have, the way they have it and have little intention of accepting anything but discounting.

Additionally, during the long length of time FB users have been involved with the online social site advertising has been mostly benign and uninterruptive. It has been a non-entity with little serious measurable sales generation (partially why GM stopped using the tool for paid marketing efforts). To start intergrating noticeably invasive ads (even for things users might have shown a previous interest in) is likely to substantially change the FB landscape and anger millions of users.

It is going to take some amazingly creative tools to meld advertising messages into peoples FB pages without them crying foul. I haven't seen one yet. But whomever figures out a way to do this, will make gobs of money.

Watching out for you everyday.

Eli