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WINNER:

Starbucks seems to be making the right moves. Let’s put aside the recent logo misstep which saw Starbucks drop its name from its logo—something I hope it will reconsider.

Starbucks’ deal with Green Mountain Coffee Roasters is masterful brandsmanship.

Basically, Green Mountain Coffee, which has a reputation for high quality beans, has agreed to make Starbucks the exclusive “super premium” coffee for its Keurig single cup brewing system.

I’m not so sure this is good branding for Green Mountain Coffee since it eclipses its emphasis on its own coffee, but it is great for Starbucks.

Bottom line, Starbucks gets to sell the very popular Keurig machines in its own stores, but much more important, it gets to establish its coffee for a whole new market of consumers and underscore the inherent quality of its product.

This deal opens Starbucks up to “elevation by association” (GMC has a stronger coffee quality reputation) while also setting up a distribution channel (all of those repeated single serve with its brand) that will continue to re-enforce the Starbucks brand and widen its scope.

All without spending a single dollar on advertising.

LOSER:

Groupon, the online social deal giant, is seen as an unstoppable force and the next new model for marketing and advertising for both small and large businesses.

Please wait while I put my skeptic’s hat on.

A piece I read in the Times made me think about some core marketing principles that might just be getting lost in all the excitement.

Allow me to quote this observation by Jay Goltz, a small business owner who had some experience with Groupon:

It’s been two years since I used Groupon at my frame shop. Few of the sales have turned into repeat customers, which is not typical of my business— we have a percentage of repeat customers. And that’s one reason I am concerned about the potential damage a daily deal can do to a company’s brand. The deals are a threat to what I call price integrity.
When you charge some customers full price and others half price, you make some happy and others unhappy. Worst of all, you make the wrong customers happy! The regulars are unhappy because they feel they overpaid; the discount customers are happy — but they’re probably not coming back because they’re used to shopping at half price. When you decide to do a daily deal, you are training your existing customers to wait for the next coupon. Does that sound like a recipe for success?

I couldn’t have said it better myself.

Coupons are only effective if they build on the fundamental realities of your brand and business.

If marketing is the science of satisfying the needs of your customers, then to employ a coupon without identifying those needs is madness, plain and simple.

As Goltz points out, his business is a repeat customer business whereas Groupon’s bread and butter are one-off promotions that drive traffic that is interested in discount sampling. Talk about someone who really knows his customers!

Basically, these are two very different Target Markets. This wouldn’t be a problem except for one important consideration: to meet the needs of the latter Target Market (the one-off’s) you risk offending your loyal customers.

It reminds me of what I once heard from my barber in the old neighborhood. He wanted to improve business, but he ruled out discounting hair cuts for exactly this reason. Never stray too far from common sense marketing.

Loyalty strategies work better in these kinds of businesses since you re-enforce the buying habits you want to re-enforce and strengthen the word of mouth that can be a powerful driver of future sales. There isn’t anything quite like positive re-enforcement to encourage the behavior that you want as a business owner. This is called the “law of effect” and it is the basis for all rewards programs.

Back to Groupon. There’s no doubt that its approach can drive incredible traffic. And sure, there have been stories of retailers overwhelmed by a flood of business. But the question remains whether this flood is actually good for the long-term growth of a brand.

The lesson here for all small business owners when executing a coupon promotion or any other kind of promotion is this: Will the tactic hurt your brand in your current customers’ minds, and what type of new customers are you likely to attract through the promotion?

After all, branding must be organic to your business and that means always keeping the totality of your customers in mind. First ask, who are your customers without the coupons? Those are the people who must shape your promotional strategies. Ask them directly. Observe behavior. Reflect. It might just be that old-fashioned referral incentives, not coupons, are the way to go.

And, remember, it's always easier when you keep marketing and branding in mind.

TODAY'S TANTILLO TAKEAWAY:
Always use your customers as your guide for your branding decisions.

John Tantillo is a marketing and branding expert who has a doctorate in applied research psychology. He is president of the Marketing Department of America and markets his own services as "The Marketing Doctor." He is also the author of People Buy Brands, Not Companies and an AMA member.

The opinions expressed in this post are the views of the writer and do not necessarily reflect the views and opinions of the American Marketing Association.

Posted by Piet at 10:00 AM | Permalink

WINNER:

I have to admit that over the past few months I’ve been getting a little worried about Apple, a company that is perhaps one of the best brand creators the world has ever known.

Why?

Because Apple looked like it might just be falling victim to its old vices: arrogance and product exclusivity.

Apple in its first heyday blew its market lead by refusing to license its technology and open up to a larger market. As a result PC clones took over and so did Microsoft which rode that global wave.

In its second heyday, Apple managed to keep competitors at bay largely by doing an even better job of listening to its customers and giving them what they wanted.

But lately with the reluctance to embrace Flash video and the iPhone 4 antenna debacle, I saw marketing trends that could spell doom.

My concern only grew as the tablet market started to bloom and competitors came out of the woodwork to eat Apple’s lunch. Low-priced knock offs had damaged Apple the first time around and, folks, sometimes history really does repeat itself.

But with the release of the iPad 2, I think that Apple might just have shown that it has learned its lesson.

Fact is, not only has it introduced a slimmer device with more features and even more appeal, they’ve done it for less than their competitors. That’s right, Apple’s actually hit a lower price point.

You don’t have to say any more than this, do you? Higher quality than your rivals and features that show you’re listening and a cheaper price.

Bottom line, no need to worry about Apple for now.

One other note on Apple. Apple might seem like an exception to the “people buy brands not companies” rule, but take a closer look and you realize it’s not.

When people identify products by the company moniker and consider themselves Apple users, what they’re really saying is that as a result of such a long track record of exceptional products, Apple, the company, has earned powerful respect off the back of its superb brands.

Apple isn’t about the game of corporate identity for the sake of corporate identity. It is about its individual brands first.

A recent Chrysler commercial caught the idea of the uselessness of corporate advertising perfectly. Basically, the spot was a love letter to the company and Detroit. How is this supposed to sell cars?

To quote an off-color observation of a mentor of mine: “Corporate advertising is like peeing in your pants on a cold winter’s day. It makes you feel warm at first, but just freezes you in end.”

Apple just doesn’t do this folks. It reserves its biggest fanfare for product launches.

LOSER:

Almost since the splitting of the atom, the nuclear power industry has been struggling with its brand image.

Three Mile Island. Shoreham. Chernobyl.

Fact is, mention nuclear power and in most people’s minds disaster, not safe, clean and efficient energy, is what springs to mind.

Now with the catastrophe in Japan, the so-called renaissance in nuclear power in the United States is probably going to take a big step backward despite what President Obama and other pro-nuclear politicians are saying now.

Folks, nuclear power isn’t an easy brand to market, but there’s no reason that it needs to be in such bad shape.

For decades the U.S. Navy has depended on warships powered by their own nuclear reactors without any significant incident. France gets more than 60% of its power from nuclear plants. And for all of the disaster fears, the United States has never really had one. Nearly all of the radiation in the Three Mile Island accident stayed sealed inside the reactor vessel which itself was inside a containment building.

The airline industry suffers terrible disasters but has managed to emphasize the safety of air travel over the gruesome images of crashes. Cars kill tens of thousands of people a year.

In the energy industry, it’s estimated that coal-burning causes 10,000 deaths each year. For the nuclear industry to be as dangerous, there would probably have to be as many as 25 meltdowns annually.

Bottom line, despite the tragedy unfolding in Japan, nuclear power really isn’t all that dangerous.

So why the terrible brand perception?

For one, in both the auto and airline industries there has been robust marketing that has led to the improvement of safety standards and the promotion of these improvements to the public. People see how airbags work. They learn about crumple zones in cars and anti-lock braking. They hear about how safe air travel is all the time.

Not so with the nuclear power industry. But just because a nuclear power plant is complex is no excuse not to promote how these plants work and why they are safe. Unfortunately, for nuclear power the only time the public gets a crash course is when something goes wrong—and then it’s negative.

It’s hard to say what will improve the perception of the nuclear power brand. My guess is that there needs to be a widespread effort to emphasize the benefits of nuclear power, especially the long-term benefits in people’s pocketbooks from electricity savings. The track record of safety is there and its superiority over other energy sources. It’s the industry that needs to get its brand talked about in good times—not just bad.

And remember, it's always easier when you keep marketing and branding in mind.

TODAY'S TANTILLO TAKEAWAY:
A great brand must have the right distribution to succeed.

John Tantillo is a marketing and branding expert who has a doctorate in applied research psychology. He is president of the Marketing Department of America and markets his own services as "The Marketing Doctor." He is also the author of People Buy Brands, Not Companies and an AMA member.

The opinions expressed in this post are the views of the writer and do not necessarily reflect the views and opinions of the American Marketing Association.

Posted by Piet at 10:00 AM | Permalink | Comments (0) | TrackBacks (0)

WINNER:

Folks, Charlie Sheen really is “winning.”

He won a place in the Guinness Book of World Records for the fastest to surpass the million follower mark on Twitter.

He has won round-the-clock attention from the media for more than a week.

He has won admiration from people who are tired of media spin and found his direct answers to interview questions refreshing.

He is liked by many twentysomethings—really liked, because he is perceived as standing up to the suits and authority.

His success has revealed that the public has a powerful taste for the unscripted in an age when celebrities and notables of all stripes are supposed to be slaves to the publicist-controlled gerbil wheel of brand damage control.

Most of all, Sheen comes across as funny. Very funny. The media has come across like scolds trying to pull down a force of nature. Sheen really did seem like he had “tiger blood” in him.

All of this has translated into huge interest in the Sheen brand, the kind of interest that stars, television shows and movies are hard pressed to generate, especially in this ever more fractured media environment.

The predictions of doom for the Sheen brand can be traced to two basic mistakes.

The first mistake is this: Many people are confusing the person with the personality.

In terms of brands, the person is who Charlie Sheen really is, but the personality is the image that he has crafted over the years. The personality is the excellent actor and the career bad boy who people love to see on both big and small screen.

This part of the Sheen package is possibly stronger than ever. His behavior, despicable though it may be, has re-enforced the brand in people’s minds.

What this guy does from a personal perspective might be terrible, but what matters here from a personality brand perspective is that he is perceived as a rogue.

He was not cast in Two and a Half Men because he had a reputation as a choir boy. The perception of Mel Gibson and Tom Cruise going off the deep end hurt those personality brands, but there is no reason to think the same holds true for Sheen who never inspired the same expectations that Gibson and Cruise did.

The second mistake is confusing a momentary interruption in the distribution chain (i.e., he has been kicked off his show) for a permanent one.

Sure, if you’ve got a winning product that you can’t get onto the shelves then eventually this is going to hurt the product’s popularity.

But as long as you can find a way around the distribution problem, then the brand can still thrive by finding a way to the people who like the brand.

Sheen has this kind of short-term problem—not a long-term one, and definitely not a career-killing one.

The issue then is ensuring that the personality reaches the Target Market that loves him. These are the people who thought he was great in Two and a Half Men and the even bigger audience who has admired his recent nose-thumbing at the status quo.

My sense is that the right producer and the right network can solve the Sheen distribution problem in a heartbeat and go on to make a killing from a brand new show packaged for this market that millions will devour.

The only downside here is that Sheen’s spike in popularity shares a lot of the characteristics with the trajectory of a fad.

Initially, the public can’t get enough of a fad. Then, usually because of poor brand management, they’ve had enough and you can’t give away what you used to be able to sell.

Corporate brands are usually smart enough to either ride the fad profitably and then let it die or control it so that the brand stays around for a while. Fad brand control is all about pacing. You don’t want to completely feed the appetite or be too available.

Many fads—think Frisbee— were able to ride the initial wave of “I can’t get enough of this thing” to become mature brands.

But personal brands—think celebrities—usually fail when it comes to managing the fad trajectory. Betty White handled her popular resurgence well, understanding how to ride the fad wave to more work and a new generation of admirers. But she’s a professional who understands fever-pitched popularity never lasts. William Shatner is the same. Both simply keep working no matter what and accept that there will be a time when their public is just not as interested in them as it used to be.

Sheen has been in show business a long time too, but he’s definitely taking a risk with recent, over-exposing moves.

His Sheen’s Korner, the live-streaming video series he launched over the weekend, is an example of the risk of a celebrity believing in himself too much…thinking that everything he touches will inevitably turn to gold. The problem is that even his so-called rants were edited in short interviews with the media so that his best and funniest lines jumped out. There’s nothing like unedited video footage to make anyone look like a hostage taker or a cult leader. And Charlie Sheen is no exception.

Bottom line, Sheen needs to pull back from the public eye right now.

If he “goes silent,” just watch as his brand comes back stronger than ever.

LOSER:

I’ll keep this short.

For all the reasons above, CBS has made a terrible mistake.

They are letting a great brand slip away.

You can almost hear the old Hollywood mogul, cigar-chomping bravado: Sheen will never work in this town again.

The only problem is that it’s a much bigger, much harder to control media landscape today. Chances are Sheen will work again and CBS will be left scrambling to find a show that fills this valuable lost time slot.

And, remember, it's always easier when you keep marketing and branding in mind.

TODAY'S TANTILLO TAKEAWAY:
A great brand must have the right distribution to succeed.

John Tantillo is a marketing and branding expert who has a doctorate in applied research psychology. He is president of the Marketing Department of America and markets his own services as "The Marketing Doctor." He is also the author of People Buy Brands, Not Companies and an AMA member.

The opinions expressed in this post are the views of the writer and do not necessarily reflect the views and opinions of the American Marketing Association.

Posted by Piet at 11:38 AM | Permalink | Comments (0) | TrackBacks (0)

WINNER:

Folks, I’ve written extensively about what I call performance brands.

Performance brands are typically found in sports where performance in the arena of play provides a powerful driver for brand recognition and redemption whenever brand image redemption is needed. These days it seems to be needed quite a bit.

The New York Knicks is the winner of the week because of its decision to hire Carmelo Anthony.

This decision is paying huge dividends. The Knicks’ victory over the Heat and Lebron James was stunning and already you can feel the re-emergence of a great sports club, an updating of the brand.

It’s amazing what winning can do. More than that, winning fits the New York Target Market, the Knicks' primary fans.

If you understand the performance brand dynamic, you can make some very accurate predictions on brand outcomes that will have some conventional thinkers scratching their heads trying to figure out how you did it.

I had this experience with Tiger Woods when he was widely thought to be washed up after last year’s scandal. I argued that his brand would ultimately sail through.

My point then was that as a performance brand, Woods would continue to retain his incredible media platform if he continued to play well. If he kept that platform, well, bottom line, his brand would have powerful visibility and he would have the chance to build his public persona brand back.

Not only that, but performance brands are resilient because they are all about their Target Markets.

Lots of people in the general public might have had big problems with Tiger Woods, and that was what most of the media cared about. But at the end of the day, the general public isn’t Tiger’s Target Market—golf fans are. Those fans care more about his winning than they do about his poor life choices.

The New York Yankees have understood the performance brand dynamic for generations. If you continue to win on the field, your brand will continue to prosper, you will cruise through scandals, you will build global good will and great marketing opportunities.

Sure, there are teams that people love in spite of a record of losing—but those are strictly local brands. To be a world class franchise, a sports brand needs to win.

LOSER:

By all accounts, James Franco turned in a pretty flat performance with his Oscar co-hosting gig on Sunday.

But that’s not the only problem with the James Franco brand.

The problem with the James Franco brand is that he still doesn’t really know what he is. As a result, we don’t either.

Fact is, Franco is first and foremost a very talented actor. He’s not a performer in a traditional, showbiz sense. He’s no Billy Crystal, Hugh Jackman or Steve Martin. He can’t pull off the glitz. He doesn’t do stand-up. He doesn’t do song and dance.

Bottom line, he shouldn’t even try. At heart, he is shy and intellectual—he’s studying for a PhD!— and when shy intellectuals are put in the spotlight…Fuggedaboutit. It’s always foot in mouth.

That’s where the embarrassing and brand-smashing Vanity Fair answer about what he does in his spare time came from. He has the making of today’s suave leading man, but his candor made him seem immature and not too appealing.

In terms of brands, an actor’s actor is what Franco most likely should model himself on going forward.

Think Robert De Niro. We know that De Niro’s thing isn’t playing host or opening up all that much. He’s a pretty private man who people respect because he turns in great performances on the screen. De Niro knows what his brand can do and what it can’t do. If he was ever asked to host the Oscars, my guess is he would say no, immediately if not sooner.

Marketers can learn a lot from brands that struggle to define themselves like Franco. The most important takeaway is this: a brand has got to know its limitations.

And remember, it's always easier when you keep marketing and branding in mind.

TODAY'S TANTILLO TAKEAWAY:
If you don't discover your brand's limitations, they are doomed to limit your brand.

John Tantillo is an AMA member and president of the Marketing Department of America, a New York-based marketing firm.
http://blog.marketingdoctor.tv/

The opinions expressed in this post are the views of the writer and do not necessarily reflect the views and opinions of the American Marketing Association.

Posted by Piet at 11:37 AM | Permalink | Comments (0) | TrackBacks (0)