The Brand Man Speaks

Mercedes Benz uses Che Guevara in promotional presentation causing outrage

In a bumbling effort to promote what Mercedes called "revolutionary" new developments in automotive technology the luxury automaker is scrambling to do damage control over the use of marxist revolutionary Che Guevara's image with a Mercedes 3 point star in his beret in a Las Vegas CES presentation this week.

In a rare moment of joining forces, liberal and conservative individuals and groups have cried foul and condemned the automaker for the use and reference. For example:

"Mercedes-Benz Uses Communist Madman Che Guevara to Sell Luxury Cars," said the headline on a blog from the Heritage Foundation, a prominent conservative political organization in Washington.

"Che Guevara... was a psychopath whose sadistic lust for blood was not easily quenched. He killed for pleasure," noted Heritage Vice President Mike Gonzalez.

It blows my mind sometimes how smart marketers do very dumb things without thinking about them. Mercedes has apologized for the use but the PR which is very negative can't be that easily ignored this time because key customer targets are expressing outrage throughout both traditional and social media.

Ernesto Suarez, who organized an effort to get Mercedes to apologize for using the image of a man often  called "a racist, homophobic, anti-semitic and tyrannical killer who admitted in his own writing to his endless blood thirst, " expressed relief that his effort to generate the apology was realized.

Some social media pundits have called for a boycott of Mercedes Benz cars. (Mercedes Benz just completed an oustanding sales year running neck and neck with BMW for top honors in the luxury automotive arena.)

A german automaker like Mercedes has to be very careful doing such polarizing activities because of its association with Hitler's operations during World War II and beliefs among segments of the American population (Conservative and Orthodox Jews for example) that Mercedes along with other German companies will never be cleared of their anti-semitic alliances from the War.

Watching out for you everyday.

Eli

Martha Stewart partners with J. C. Penney to expand brand and help shore up weak sales at retailer

Martha Stewart proves if your brand is targeted right and the core brand essence is compelling enough it can appeal to a broad spectrum of Americans across socio-economic levels.

Stewart is partnering this time with J. C. Penney for the development of mini Martha Stewart boutiques inside the lagging retailer's stores nationwide. Penney has taken nearly a 17% stake in Martha Stewart's public company. For Penney's CEO Ron Johnson sees this co-branded venture as a way to increase the retailers exposure and importance as he tries to get the company back on its feet. Penney's is doing poorly relative to Macys and other traditional department store entities. Johnson recently took over the helm of Penney's after notable tentures at both Target and Apple where he developed the wildly successful Apple retail concept.

Stewart will provide new exclusive products for her shop in shop concept that will not directly compete with her current products sold at Macys, Home Depot and PetSmart. Staffers will be exclusive to Stewart's mini stores to ensure the brand message stays on target.

Although Stewart's empire has taken a big hit in the past few years because it is so advertising dependant (her magazine is a big part of her empire), her alliances continue to prove she has staying power and remains one of the iconic brands of the past several decades especially given her stint away from the business for illegal stock transactions followed by jail time.

Watching out for you everyday.

Eli

Consumer darling JetBlue brand suffers due to stranded planes in freak NE snowstorm.

JetBlue apparently faced some major obstacles dealing with the freak October Northeast snow storm this past weekend. In one case in which a plane was stranded on the tarmac at Bradley International in Connecticut for seven hours, it might turn out to be less of the brand's fault and more of the airport.

This past year a Passenger Bill of Rights was passed by Congress to ensure these kinds of incidents where passengers are stuck on planes for ridiculously long hours without food, water or bathrooms would be addressed. The fines the airlines face are as much as nearly $28,000 per passenger for each incident. Hefty to say the least.

Now I am no fan of airline travel these days nor the lack of service most airlines offer a sentiment shared by millions of people around the globe. However, if the latest news is true that Bradley International Airport is mostly at fault, then why should the airlines suffer millions of dollars in fines? What has surfaced includes the JetBlue Pilot's unanswered pleas to the airport to help get passengers off the plane after finding his company could not get the airport to help either. The airport was very slow to react seemingly with little or no emergency preparedness plan in place.

Maybe if the airline turns out NOT to be at fault and it is the fault of the airport and the city and/or state can they all be fined? Could the city and state be subject to lawsuits from passengers? Why not? Airports (run by governments) get fees from airlines to do business so they need to be held accountable, although, as we all know Government, whether local, city, state or Federal seem to not be accountable for much lately.

Until all the facts are known, JetBlue will be taking alot of heat from angry passengers and the media.

Watching out for you everyday.

Eli

 

Netflix isn't Doomed.

So says Holman Jenkins Jr. in an opinion piece in the Wall Street Journal today. I do not agree. His conclusion? Despite the huge fall off in subscribers and the costs involved in obtaining more streaming content (of value to subscribers---not just stuff nobody wants to watch) he believes both investors and subscribers will see that no one source will meet their needs because of a fragmented marketplace for at- home entertainment content and that Netflix is still a good value and will survive.

The Netflix premise that took consumers on a "journey" was for a very good price (less than going to the movies) you had a bunch of choices that you could order online delivered right to your door sometimes next day for viewing for as long as you wished. Brand loyalty was built on this premise along with a very identifiable icon, the red Netflix envelope. Streaming was the next order of business but there were many subscribers who wanted both, one or the other, but wanted the choice their way. I am one of the those folks who wanted it his way. Both DVDs and streaming at a fair price. I was a huge fan of Netflix so much so that I bought the stock because I believed the vision and the journey was exciting to many millions of people despite the other options out there and on the horizon.

However, (and I will keep reminding people for some time to come) great companies should not fail to understand that building that brand loyalty is as important (if not more so) than what may appear to be great strategic business modeling to analysts. Many analysts said that Netlfix couldn't maintain the value proposition they had given consumers for much longer and the price increase was a necessity for survival. That may be true. Unfortunately, when a key element of your brand strategy involves price-value you have to be extremely careful when you increase your pricing structure not to go to the point (too quickly) where price elasticity of demand along with sheer shock value hits consumers hard in the face.

Many companies deal with increasing prices all the time as a course of doing business. When you do so in such a way to make the consumer stop in their tracks to say, "wait wow that's a big increase do I still need or want this service?", you are in trouble. If you don't have a very demonstrable plan to show those consumers the value they are getting (as well as if you are smart--adding more value along with the price increase) you are taking a huge risk that likely will alienate your core audience and destroy your business.

In my opinion that is what has happened to Netflix and although I would love to see them fix this mess and get their stock price back up (for me to break even) I just haven't seen or read anything that convinces me that this will occur. I also know that the company's cash flow has been greatly weakened by the greatly devalued stock and huge subscriber base loss over the past few weeks and there is now question if they can survive to pay their current bills, forget acquiring more content.

Lesson: Never underestimate your customers, their emotional connection to your brand or their expectation of your product or service.

Watching out for you everyday.

Eli

 

Why the Print Version of Newspapers needs to exist: Even tech wizard Steve Jobs was a fan. [Second in a series]

Steve Jobs loved newspapers. He was obsessed with how consumers should and would consume news. But he was convinced the printed newspaper would be dead by 2011.

In a recent Wall St Journal article by Gordon Crovitz, Jobs was noted as someone who felt the printed newspaper was once an important tool but felt that the newsprint version of news lost its way, failed to take consumers on a journey (something all great brands must do) and was easily replaced by new media versions of information dissemination. The issue was one of print quality as Jobs was known for being obsessed with excellence especially when it came to the quality of printer matter, especially for his ads. If the ads in print form weren’t glossy and beautiful he wouldn’t use the medium.

 Although Jobs said newspapers would be obsolete by this year, he was to a great extent challenging the newspaper industry, according to Crovitz. Although Jobs is no longer with us, he leaves an important assignment for the news business.  Our lives have changed but newspapers have failed to evolve with us. What the newspaper industry has forgotten is the internet is just a new distribution tool, not a new brand, and the industry needs to better understand the relevance of the print form to consumers better than it does today, ( For example you can be reading the news with a newspaper on a plane without interruption when the flight attendant says TURN OFF ALL electronic devices when preparing to take-off and/or land. A case of print being more convenient than electronic!)

I contend there is something very special about holding and reading a newspaper (or a magazine for that matter). It is a combination of a vehicle of information mixed with the cultural experience of reading through the pages. One thing the glitzy online versions of news (as exampled on the iPad) lack is the tactile sense of going through the news and ads where the eye may pick up on stories (or ads) adjacent to ones you plan to read but would not have done so directly without the adjacency. Personally, I find the online version of news can create a sensory overload and finding the stories you want to read can be challenging in its own right and those you might have not known you want to read are not discovered. Some graphic versions of news online is so glitzy it is actually too hard to read.

Jobs said the quality of the newsprint was a problem. I realize it is expensive to make newspapers look like glossy online presentations of information. However, the lesson, if there is one to be learned, is that the print medium has important value in our culture and the newspaper industry has to figure out how to improve the quality of this distribution channel as well as remind people how meaningful this channel of information dissemination really is.

Watching out for you everyday.

Eli

PS HOT NEWS: Just read that the Newspaper Association of America is launching a new ad campaign that extols the virtue of newspapers with the slogan, "Smart is the new sexy". Now only if the print medium is made a bit more sexy they have a story to tell!

Why Netflix is failing: CEO Hastings doesn't understand branding

In an interview with the New York Times (appearing in the magazine section today), Netflix CEO Reed Hastings proved why Netflix is failing. As is common with most CEOs, he (admittedly) fails to understand what makes a brand in the first place and what makes one successful in the long term.

In the interview, Hastings says describing the major screw up that Neflix has encountered, "I think it was just a mistake in underestimating the depth of emotional attachment to Netflix". You think? Companies try (mostly unsuccessfully) to build emotional attachments with consumers. It's called brand loyalty and a very key ingredient to long term success. Not understanding this concept is a fundamental admission that one does not know how to market a product something CEOs arrogantly won't readily admit since they mostly think branding is an expense not a revenue builder.

Hastings also puts himself in a comparative role to Steve Jobs (hardly) and Jeff Bezos of Amazon saying his mistakes are all short term and CEOs understand the measurement of success is long term. However, and a big however, Jobs and Bezos understood and understand (respectively) how to build great brand loyalty and nuture it. Jobs was the master at it because he had a vision and took consumers on a "journey" which all great brands do. Hastings was on the right track, but missed an important station stop and went way off track to the point he may not be able to get his business back in gear.

I for one would like to see him resign and hire a more marketing savvy CEO to take the reigns and get the brand somewhat back on track by creating a new "journey" for consumers. It is going to take some great creativity and some concessions (to the brands most loyal consumers). Unfortunately, Hastings says he will not resign.

Watching out for you everyday.

Eli

Newspapers and their future: From Masters of the Universe to near extinction in less than a decade . [First in a series]

The newsprint version of the newspaper business has cancer but it was preventable and it may be still treatable. It was self-inflicted not caused by changes in the marketplace as the industry asserts. The top players were threatened by the new medium of the internet and instead of turning their fears into a triumph they succumb to them. Why? The newspaper industry’s “Old Guard” didn’t understand it and didn’t make any effort to master it. Instead of embracing the internet quickly they fought it, mismanaged it and forgot a very important element of great branding.

During the late 80s and early 90s I was a branding consultant to the newspaper industry.  Unfortunately, I rarely saw eye to eye with the traditionally minded senior executives of the day. It was at the time the internet was just starting to be recognized as a new force in communications and newspaper companies were trying to figure out how to deal with this game-changing tool. We know today most missed the boat and in an attempt to play catch up ended up using the internet medium poorly or incorrectly. While devoting so much money and energy to the new medium newspaper companies lost sight of reinforcing what made a newspaper in print form special and meaningful accelerating its rapid decline to where we are today.

What fascinated me was how many newspaper companies feared the internet and wanted to approach their re-branding efforts from that point of view. It seemed akin to the time when radio met television and radio broadcasters feared TV would eliminate their medium.

We know today that did not happen. Radio serves a place in both the information and entertainment world as does television. Companies became involved with both businesses and learned to use them for the unique elements each presented instead of trying to have one dominate the other. Radio thrives today along side television as two different mediums that deliver different kinds of experiences successfully to broad audiences.

The same should have been true for the newspaper industry.  Here’s why it wasn’t.

The key is the concept of branding is not often well understood by top executives primarily interested in the bottom line. They see marketing, especially branding efforts, as expenses and not investment spending. In the case of the newspaper industry, brands are not about the delivery systems they use. Newsprint, smart-phones and tablets are distribution channels. Brands are conceptual emotional contextual in nature. In the case of newspapers, the brands are the New York Times, Wall Street Journal, Chicago Tribute all in the information dissemination business and for years the masters at it. Many newspaper companies failed to integrate the internet as a new distribution system reaching new audiences (and eventually current audiences as well). Instead they saw the internet as a new brand and started building from scratch loosing focus on what a brand is.

In my opinion newspapers allowed the internet to become an entity beyond their control when in its infancy they could have become dominate players.

Today the internet offers thousands of new sources of news and information using the unique tools of this delivery system to reach all types of audiences all over the world 24/7. Today newsprint versions of newspapers are disappearing like dinosaurs but this didn’t have to be and just maybe this erosion can be stopped as they serve an important role in the information business and as a part of our way of life. Part of the problem likely lies in the fact the newsprint version of news hasn’t evolved in terms of quality and production values over the decades. It’s been cheapened to save money which has made it less attractive and competitive. The user experience has suffered.

Over the next few weeks I will examine other aspects of the decline of the newspaper business and what options might still be out there for its revival. Great brands weather storms even if they are deadly hurricanes. One aspect I will examine is the user experience with newspapers on the web, smart-phones and tablets. The news is not very good and I will explore why.

Next in the series: What did one of the world’s greatest techies think about newspapers and their future? What can we learn from his vision?

Watching out for you everyday.

Eli

 

 

 

 

Netflix: What are they doing with their brand? Destroying it? And this Qwikster DVD brand?

It was no surprise (full disclosure I own their stock) that Netflix's stock took a nose dive after the rather arrogant price raising strategy they took some weeks ago.

To anyone who has studied economics the law of elasticity of demand reigns supreme today as it has for years. To raise prices dramatically and NOT offer some value added to offset the price increase was clearly a very poor strategic move. Not only did Netflix lose many customers, many downgraded their services (including myself) and felt hurt by their actions. This brand had developed somewhat of a cult following. People were extremely loyal...to a point...but found this action unacceptable and insulting.

Today Netfix spun off its DVD by mail division into a new brand to be called Qwikster. Why you might ask? I asked the same question. For those of us who still have subscriptions to both DVDs and streaming the idea that one would have to deal with two different operations is just another nail in the coffin. Making it more time consuming to do business with this company will only serve to make more people drop the service and go elsewhere. More work less convenience, ugh. Not a good strategy.

I don't even like the idea that my familiar red DVD pack will no longer say Netflix but some obscure new name Quikster? Another ugh.

Some speculate that Netflix intends to sell off the DVD by mail business because that business model no longer works economically. Meanwhile, the stock plunges again down over 150 pts in recent weeks and there is nothing coming out of that CEO's office that makes anyone in my opinion think this business has anywhere to go but out of business as consumers lose all faith in this brand.

I believe we will see this as a case study of success mishandled turning a game changer into a game loser permanently. Sad, I don't think if the changes had been managed better, specifically rewarding customers who stayed even with big price increases with some meaningful value added experience that this would have blown up so fast and furiously.

The only way out now is mea culpa BIG TIME doing something fantastic for what customers remain, especially those using both services. Other than that, even I am ready to move on and take my loses.

Watching out for you everyday.

Eli

Does eliminating articles (a, an, the) before a brand create a more iconic identity?

The Wall Street Journal had an article today that talked about the elimination of "articles" in both speech and writing by marketers in recent times. The idea is that by eliminating the words "a", "an", and "the" before a specific name or brand (or any noun) somehow gives it more power and strength making it more significant and bigger than the object itself. For marketers making a brand "iconic" is akin to finding the holy grail.

Apple, not surprisingly, was one of the first to employ this technique. They don't say "the" iPhone or "an" iPad. It's "iPhone" and "iPad" within communications. For example an ad says, "Buy iPad Now".

The issue isn't just one isolated to marketers. This situation impacts the English language as a whole and the state of grammar in this country.

In the past decade, educators have expressed tremendous concern that "Johnny can't write or speak properly". The elimination of articles before nouns doesn't help that cause. However, we have to consider that our language and how we use it has been changing quite rapidly especially due in no small part to the advent of emails, text messages, tweeter, among the many tools we now all use to communicate. Many of these forms of communication limit the number of characters you can employ to get your message across further "teaching" us how to truncate our language. With the broad use of these quick message formats it seems unlikely grammar protectors will see a shift back to anything remotely familiar in the near future.

Interestingly, there is a small but growing collection of people (mostly older than 50) that are actively going back to using hand written notes to communicate. This movement is both a reaction to the informal and improper use of language that has evolved and a desire to separate ones message to another so distinctively it is noticed and not forgotten. Many new businesses have surfaced that specialize in high quality note cards and printing to address this burgeoning market.

Ironically, marketing pundits say the elimination of articles makes the noun more personal and human. At the same time the rise in use of more formal written notes also indicates a need to make communications more personal and human. The end result may be similar but the means are quite different.

Watching out for you everyday.

Eli

The Wall Street Journal; has its customer service deteriorated because its a Murdoch newspaper?

The Wall Street Journal is one of the world's great newspapers even after a number of years under the ownership of Rupert Murdoch the beleaguered media mogul whose less than savory publications have been involved in reckless cell phone hacking.

I have found, despite my inital concerns, that most of the editorial content remains first rate and has not been completely skewed by Murdoch's political point of view.

Unfortunately, one component of the newspaper's operations has deteriorated dramatically under his management; Customer Service.

Since the addition of the quarterly WSJ Magazine on Saturdays, (over a year now) the delivery service that they use to service my neck of the woods has failed to be able to include this wonderful and well-written magazine in the issue in which it is published. Despite calling in advance of the issuance (when I get wind it is due to come out) the delivery service cannot seem to get it into my paper or the newspapers of 25 neighbors in my condo complex.

Repeated calls to the WSJ Customer Service Dept. over nearly a year has generated empty promises to resolve the problem. I have been told each time that my matter is now a "priority" and is being "expedited" but nothing happens, no one returns any calls and most importantly I do not get the magazine.

I failed to get the magazine this past Saturday despite my best efforts to head off the problem. I got more apologies and promises but no magazine. I was even sent an email with a link to FREE access to the WSJ's online product so I could read the entire magzine online, but alas that was a joke. The link was for me to PAY $140 a year to have access to the online service.

In this day and age of declining newspaper readership, you would think the WSJ print edition management would make a real effort to keep loyal readers instead of just ignoring them. Maybe a few people need to lose their jobs (top subscription management) to get someone to take consumer loyalty seriously.

Watching out for you everyday.

Eli