The Homa Files

Excerpted from Business Week, “Starbucks’ Union Blues”, December 31, 2008

Starbucks’ legal wrangles with a union that wants to organize its baristas is tarnishing the coffee chain’s reputation for social responsibility

Starbucks, once the undisputed leader in premium-price caffeine fixes, has long cultivated a corporate image for social responsibility, environmental awareness, and sensitivity to workers’ rights. Now that carefully crafted reputation is under assault, thanks to a messy legal dispute with a group called the Starbucks Workers Union (SWU).

The NLRB found that Starbucks had illegally fired three New York City baristas as it tried to squelch the union organizing effort …. the company broke the law by giving negative job evaluations to other union supporters and prohibiting employees from discussing union issues at work.

The judge ordered that the three baristas be reinstated and receive back wages. The judge also called on Starbucks to end discriminatory treatment of other pro-union workers.

The timing isn’t ideal for Starbucks, which faces lower demand from the recession, an overall loss of panache for the brand, and a sliding stock price.

The company’s shares more than halved in value in 2008, while Dunkin Donuts and McDonald’s continued to grab market share among coffee drinkers.

Starbucks has been the target of numerous National Labor Relations Board complaints over unlawful violations of workers’ rights.

The SWU is especially keen on tarnishing Starbucks’ image as a “socially responsible” company. Union reps say that Starbucks has a systematic problem with low wages, irregular working hours, and a lack of reliable health care. Starbucks maintains that it pays competitive wages and is among the first large employers to offer health insurance to part-time employees, who make up 100% of its workforce.

Starbuck’s carefully cultivated reputation for social responsibility, may be vulnerable. “The image of the brand that it is wonderful being green, promoting free trade, and helping people, and not being an oppressor of labor.”

Full article:
http://www.businessweek.com/magazine/content/09_02/b4115026911242.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

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Excerpted from Marketing Daily “Understanding, Leveraging Consumers’ Five CPG Mindsets” by Karlene Lukovitz, October 16, 2008

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Consumers approach different categories of consumer packaged goods with different mindsets, and marketers that understand and leverage these can enhance their products’ performance.

CPG marketers “don’t want to get it wrong in the fleeting nano-second of purchase decision  … Marketers need to know what buttons to press to influence their shoppers and win on the ultimate marketing battleground–the store aisle.”

Here’s a summary of the five CPG mindsets and how marketers can best exploit these. The insights apply across all retail channels where CPG’s are sold, including grocery, drug stores, convenience stores, mass merchandisers and club stores.

Indifferent auto-pilot and blinkered auto-pilot mindsets: When it comes to products like bathroom cleaners, bar soaps, dishwashing soap and cotton swabs, consumers’ pilot buttons are set to “indifferent.” Rather than spend time on decisions, they automatically reach for the brands they usually buy, generally without comparing prices. Since there’s low brand-attachment, consumers have no problem switching if their usual brands aren’t available.

To avoid such switches, marketers of leading brands in these CPG categories need to ensure against out-of-stocks or visibility and distribution issues … The overall key to influencing consumers on auto pilot lies in knowing when and how that mindset can be disrupted by external stimuli, so that they are ready to consider alternatives and new offers…

Browser mindset: Consumers are more engaged with products such as shampoo and conditioner, body washes, and toothpaste and brushes–they check out labels and packaging, sniff and test these. This means that marketers need to provide a wide product assortment and realize that packaging innovations can be persuasive in decisions.

Buzz mindset: Hand and body lotions, air fresheners and baby toiletries are among the product categories that are “buzz-activated.” Shoppers actively seek out information about these.

Constant innovation in packaging and new product attributes–introduction of attention-grabbers such as “age-defying,” “shimmering,” tanning and aromatherapy, for example–combined with exciting advertising and new product introductions, are the keys for these categories.

Bargain-activated mindset: Unless there’s hot news about some brand, shoppers tend to switch brands on toilet paper, laundry detergent, paper towels, facial tissues, liquid hand soaps and batteries based on which are on sale or appear to be bargains.

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Full article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=92836

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Excerpted from Ad Age “What Went Into the Updated Pepsi Logo ” by Natalie Zmuda, October 27, 2008

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The new logo is a white band in the middle of Pepsi’s circle that loosely forms a series of smiles: A smile will characterize brand Pepsi, while a grin is used for Diet Pepsi and a laugh is used for Pepsi Max. The new logo is Pepsi’s 11th…Five logos have been introduced in the past 21 years, with the last update in 2002…

Consumers won’t see a new campaign for a while…the launch isn’t expected until 2009… 

So far, branding experts are in both camps. “It’s tilting the brand presentation from a classic expression of uniqueness and quality into something more humorous, almost flippant,” said Tony Spaeth, an identity consultant. “…it is less durable, less permanent and classic. It comes across as more of a campaign idea than an enduring brand expression.”

“This seems to be a really good solution. It feels like the same Pepsi we know and love, but it’s more adventurous, more youthful, with a bit more personality to it,” said Chris Campbell, executive creative director at Interbrand. “In theory, what they’re doing sounds like a really clever solution to link together a family of brands.”

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Full article:
http://adage.com/article?article_id=132016

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Excerpted from
http://www.cnn.com/2008/POLITICS/11/04/exit.polls/

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While Obama will be the nation’s first black president, John McCain would have been the oldest person ever elected to the nation’s highest office.

Race played less of a role in the election than age

The only age group where McCain prevailed was 65 and over, and that by just a 10-percentage-point margin, 54 percent to 44 percent, the exit polls showed.

Minorities went heavily into the Obama camp. Blacks, 96 percent Obama to 3 percent McCain; Latinos, 67 percent Obama to 30 percent McCain;

Obama did well with Latinos because they appear to disapprove of President Bush’s job performance more than the rest of the country,

About 80 percent of Latinos give Bush negative marks, while 72 percent of all Americans do, exit polling showed.

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Ken’s Take:

(1) Interesting that 93% of blacks voted for Obama because he was — on his record and positions — the better candidate.  But, 54% of old people voted for McCain just because he was old.  Huh ?

(2) McCain put his political career on the line pushing for comprehensive immigration reform (i.e. amnesty).  Which, incidentally, Bush supported.  Obama stayed out of the fray.  Yet, Hispanics rejected McCain 2 to 1.  Gotta feel a bit sorry for the guy.

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Excerpted from Brand Channel “Rating Nation Brands: What Really Counts” by Randall Frost, October 6, 2008

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Simon Anholt, a nation branding expert who advises governments on such issues, believes it is unacceptable for governments to spend taxpayers’ and donors’ money on nation branding campaigns if the results can’t be measured, tracked, or made accountable. For that reason, he launched his Nation Brands Index (NBI) in 2005…

The NBI index considers a country’s exports, governance, culture and heritage, people, tourism, and investment and immigration…

According to Anholt, the NBI ranking is not simply a list of the 40 or 50 ‘strongest nation brands’ in the world. Rather, he says, it’s a highly detailed analysis and comparison of 40 or 50 selected countries…

Last August, East West Communications in Washington, D.C., released a competitive ranking of nation brands. Unlike the NBI index, the East West Global Index 200 looks at all 192 UN members, as well as 8 territories, based on how they are perceived in the international media.

According to East West president Thomas Cromwell, the new index tracks 38 major media sources…plus major regional publications that are translated into English and some digitized input from broadcast channels…

Perception Metrics in Ohio conducts the media analyses for East West. According to Brad Snyder of the company,…“What we’re really trying to identify is the brand value by considering the number of mentions, and the tone; we believe both are essential. How much is the country being portrayed positively? And how often is that positive image reinforced? Or is a negative image being presented, and is it hitting home?”…

Both the NBI and East West indexes rank nations by how favourably they are perceived around the world. Because the NBI measures consumer perceptions, however, and East West media perceptions, one would not expect total agreement in the two rankings. But both indexes employ scientifically sound methodologies, so one might anticipate a little more overlap than appears to be the case..

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If one considers the top 100 ranked (positively nuanced) countries in the East West index, the ten most frequently media-cited countries are the US, the UK, Australia, France, Japan, Russia, Germany, Italy, Spain and Canada. These countries correspond quite closely to those that have the highest rankings in the NBI index.

One interpretation of this result is that although the media sets the agenda for awareness of countries (what countries people think about), it does not influence what people think of those countries nearly as much…

Professor David Gerstner of Pace University in New York is currently developing yet another nation branding index. Says Gerstner, “Given the increasing importance, attention, and interest in place branding, more nation rankings are likely to appear in the future. The results of these studies are likely to vary. The reason is that, even though they claim to measure the same idea—how attractive or well-regarded a nation is—due to differences in methodologies they are actually measuring different things.”

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Full article:
http://www.brandchannel.com/start1.asp?fa_id=443

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Excerpted from AdAge “Tampa Bay Rays get P&G Style Makeover” by Jeremy Mullman, October 6, 2008

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Under the guidance of a former Procter & Gamble brand manager, the Tampa Bay Rays have gone through the sort of transformation typical of deodorant sticks and shaving razors. First off, the team got a new name — Devil is gone — and a fresh logo and color scheme, swapping green for blue. A list of “consumer touchpoints” was found via focus-group research and monitored to make sure the ballpark experience is fun for fans.

And a P&G staple — product improvement — was even applied as the team morphed from one of the league’s most hapless teams into perhaps its best young squad. The emergence of fresh stars such as pitcher Scott Kazmir and third baseman Evan Longoria helped the team beat out such annual powerhouses as the Boston Red Sox and New York Yankees to win a division title and playoff berth only a year after finishing dead last. There’s evidence the strategy might be starting to show a glimmer of success. The Rays won their first playoff game last Thursday, and their first two home games are sold out.

But there’s still a long way to go. Sales did climb about 30%, but that put the Rays at only 26th in attendance among the league’s 30 teams — a weak performance, considering they boasted the league’s second-best record…

Mr. Raymond — who worked on fabric softeners and panty liners at P&G — and the team’s other top executives have nevertheless engaged in a Procter-style treatment of their brand, complete with a mantra of five “brand pillars” and 30 carefully monitored consumer touch points that help the team monitor consumer satisfaction. “It’s a lot like what P&G does with brand-equity models,” he said. “We know when our cleaning scores dip or when our security wasn’t helpful enough”…

The team also has taken steps to improve its fan experience by strategizing against the armies of Northeast transplants in the area who flock to the stadium to cheer against the home team whenever the Yankees or Red Sox come to town.

It designated a group of its most hard-core fans to meet with the team’s coaches or players before games to initiate new cheers; gave away cowbells to fans, who bring them back and ring them in droves when opposing players are on the verge of striking out; and even used YouTube-style consumer-generated fan videos on the stadium’s JumboTron.

The result has been a formidable home-field advantage — when the fans actually show up, that is. “Our record is 20-2 in games where we have 30,000 or more fans,” said Mr. Raymond, raising the obvious question of how good the Rays’ record would be if they could draw crowds like that for the other 59 home games.

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Full article:
http://adage.com/article?article_id=131499

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According to Pete Blackshaw of Nielsen, a brand’s credible reputation is driven by 6 factors:

Source: Pete Blackshaw http://www.tell3000.com/

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Excerpted from AdAge “Small Brands Could be J&J’s Next Big Thing ” by Jack Neff, October 6, 2008

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Selling big, heavily extended brands at large retailers has been a cornerstone of success for the personal-care marketers for most of the decade. But as that business model shows signs of fraying, $61 billion Johnson & Johnson increasingly is trying something a lot more entrepreneurial.

In the past year, J&J has quietly ramped up a major assault on direct-response skin-care powerhouse Proactiv with the SkinID brand. The Neutrogena subbrand offers customized acne-fighting and other skin-care products and is sold online…

Clearly, J&J has benefited from the big-brand, big-retailer model up to now. Information Resources Inc. data reported by Deutsche Bank shows the company gaining share in key categories such as acne products, facial moisturizers and cleansers in recent quarters. With global sales estimated by people familiar with the company at $2 billion to $2.5 billion, Neutrogena is neck and neck with other global megabrands, such as Procter & Gamble Co.’s Olay and Unilever’s Dove.

Yet both of those rival brands have slowed within the past year and begun losing share, at least in tracked U.S. channels. And even the biggest brand behemoth in mass, L’Oréal…has begun losing share in cosmetics and hair colorants in the past year…to smaller P&G brands Cover Girl and Clairol…

Should the same fate befall Neutrogena, at least J&J has skin in another game. J&J launched SkinID by “Neutrogena Dermatologics” on a limited basis in April, then ramped up spending behind infomercials featuring former “American Idol” contestant Katharine McPhee starting in May…

As with Proactiv, the products are customized assortments available only by phone or online, but Neutrogena ads bill SkinID products as “twice as effective as Proactiv.” The tack appears to be working, with traffic to skinid.com running at around half the level of traffic to proactive.com after only a few months of all-out effort by J&J…

“We’re revolutionizing skin care through questions to our consumers,” said Cal Schmidt, VP-sales and marketing for J&J unit McNeil Nutritionals, referring to the early stages of SkinID in a talk at an Advertising Research Foundation forum in April. “We are offering our customers specific products tailored to them… And then you have this ongoing dialogue.”

Not to mention ongoing sales. What likely makes the proposition most attractive to Neutrogena is automatic replenishment, which keeps consumers buying and prevents the switching common at a retail shelf…

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The SkinID brand isn’t J&J’s first attempt at skin-care products for specific skin types.  The company has had success with another smaller brand, Ambi, since it acquired the brand in 2004.  The Ambi brand includes skin-clearing and skin-tone evening products to specifically meet the needs of African, Asian and Latin woman.  As with SkinID.com, the product website, ambi.com also provides skin care advice for consumers and helps them find the product to best meet their skin-care needs.

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Full article:
http://adage.com/article?article_id=131485

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Excerpted from BusinessWeek “The Case for Brand Accretion”, by Steve McKee, September 12, 2008

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Brand accretion. With respect to branding, accretion is the simple principle that the more you invest—and the more consistently you invest—the better your long-term returns will be.

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In a branding context, accretion means that none of your marketing efforts exist in a vacuum. Sure, you want them to have an impact today, but they also add to, and are interpreted within, the context of your past and future efforts.

Think of branding as a process, not a static point in time; if your message is steady and consistent, you can build significant brand equity. If, however, you continually change your approach, carelessly cut your budget, or seek only short-term benefits, you’ll be compromising your own long-term interests.

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James Gregory’s marketing firm, CoreBrand, has conducted years of research about the long-term effects of marketing investments. He says it’s rare for even a one-year surge in advertising spending to generate measurable results in image development; it’s usually at least three years before you see real change. That’s a long time if you’re starting from zero, but if your efforts are continuous, the power of accretion will continually work on your behalf.

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Full article:
http://www.businessweek.com/print/smallbiz/content/sep2008/sb20080912_752256.htm

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Excerpted from Strategy & Business, “A Breakaway Opportunity for “Inferior” Products”, by Leslie Moeller, James Ryan, and Juan Carlos Webster, September 16, 2008

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As the difficult economy causes consumers to trade down in their purchases, companies need to adjust their offerings to their customers’ new behavior.

The current economic crisis is creating a “new normal” in consumer buying habits. Before the recent downturn, when consumers tried to save money, they traded down from branded products to private-label or so-called value brands. But they tended to keep buying some form of the product; they continued to pay for the convenience of, say, antibacterial throwaway wipes or gourmet frozen foods. In the current economy, they are not just trading down within a category, but switching to “inferior” products and services — paper towels instead of wipes, washcloths instead of paper towels. In the process, they are raising the value of the type of products and services economists call “inferior goods”: those that attract consumers more when purchasing power declines.

This will require a major shift of focus for many consumer-oriented companies. During the past decade or so, marketers have grown accustomed to the trend known as “premiumization”: Each year, consumers sought out higher-priced and more distinctive products.

Premiumization will never go away completely. But suddenly it has moved to the slow lane. The reason, of course, is the continuing economic downturn.

The impact has not been gentle on premium products, even the relatively inexpensive or everyday kinds. Retail sales figures for the second quarter of 2008 showed declines of 0.7 percent for Target Corporation (versus a gain of 2.7 percent for Wal-Mart Stores Inc., which has much less of a premium focus in its category) and a significant “mid-single-digit” decline for the Starbucks Corporation.

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If you can attract consumers to your category from another, the era of inferior products may bring you superior opportunities. Consumer-oriented companies should consider the following options when facing the current economic slowdown:

1. Don’t blindly lower prices to regain volume. Simply reducing prices could well be financially disastrous; it already has been for several casual-dining restaurant chains. Across-the-board price-cutting may lower the price of a $12 meal to $9 or $10, and thus affect the perceived value of, say, Boston Market versus Chipotle, but it will not have any effect on a consumer who is opting for a $5 meal by eating at home.

2. Find the inferior products that will attract consumers as their purchasing power decreases. Introduce a new brand or sub-brand in the categories to which consumers are moving in this downturn. Of course, companies will run the risk of potential cannibalization, but that’s still better than losing customers altogether.

3. Cement consumers to your brand. Once you have attracted consumers to your inferior product, bind them to your brand. Give them an experience that merits repurchase. Think about the products you can trade them up to when the economy starts to recover — for example, the health-conscious, convenient, or premium products that will make them stick to your brand as their incomes increase.

4. Make the new normal feel better. You can help consumers feel good about migrating to inferior goods by enabling them to justify their decisions in terms other than affordability. Toyota Motor Company’s Prius is a great example: Consumers don’t feel bad about trading in their BMW or Escalade, because they are doing their part for the environment; it’s not simply that they can’t afford anything more expensive.

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Brand owners and companies that offer products or services to customers across a broad range of price points, and that can manage the cycle, will fare better than those with more focused products and offerings that can’t adapt up- or downstream as consumer choices change.

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Full article:
http://www.strategy-business.com/li/leadingideas/li00093?pg=all

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Excerpt from Ad Age “Coke Still No. 1 in Brand Value” by Jean Halliday September 19, 2008  

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Coca-Cola is again the world’s most valuable brand, according to Interbrand’s just-released annual list of the Best 100 Global Brands.

While Coke held onto its top slot from last year, IBM, by expanding its services and transitioning out of production, moved up to No. 2, knocking Vista-burdened Microsoft to third…GE was fourth, boosted by its “Ecomagination” communications program, and Nokia fifth.

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Full article:
http://adage.com/article?article_id=131117

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Excerpted from Brand Week “Retailers Rally Behind Their ‘Captive Brands'” by Elaine Wong, September 28, 2008

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Retailers have come a long way from the no frills aisle.Rather than marketing store brands as some lesser, cheaper alternative to brand name products, Wal-Mart, Walgreens, CVS and others are increasingly creating and promoting their own “captive brands”… 

Carrying no evidence of the store’s affiliation, these brands, manufactured by a third party and sold exclusively at the chains (hence “captive”), let the retailer command a price similar to brands produced by consumer packaged goods companies like P&G. They also let the retailers gain ground in a category—beauty—for which consumers generally take a dim view of traditional private label brands….

One reason why the shift has affected beauty care more than other industries is because the category itself is “over-SKU-ed,” said Mike Moriarty…”If you look at the haircare aisle, it has way too much product in it anyway.”  The influx makes it particularly tempting for retailers to introduce their own offerings because they can identify certain niches not yet met by their consumer packaged partners, Moriarty said.Since the retailer ultimately controls the display units, the result is a shelf space war. That’s a circumstance in which captive brands have a distinct advantage…This, however, does not mean that captive beauty brands will eventually displace their branded rivals, CVS’ Pensa said.. 

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Full article:
http://www.brandweek.com/bw/content_display/news-and-features/packaged-goods/e3if624dc1ee34cd1b5f24e9d19408550b8?imw=Y

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Excerpted from BrandChannel: “Brand Obama or Brand McCain ”, Patt Cottingham

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Ken’s Note: The full article is interesting reading for marketers.  It’s a non-political run-through of of how the candidates’ “brands” developed — the words, the images, and of course, the logos.

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OBAMA LOGO: The Obama Campaign chose an icon that captured the feeling of sunrise over a field of red and white stripes. There is also a subtle “O” for Obama that is in play here though the name Obama is not used in the icon. This makes it a universal logo/icon that anyone can attach their own meaning to. The Obama and Pepsi (far right) logos are both round, youthful, and use the colors red, white, and blue.

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McCAIN LOGO: The McCain Campaign chose a logo that comes directly out of his family heritage of 3 generations in the US Navy, as well as his war hero status political leader. The colors of blue and gold are US Navy colors, the star icon comes directly out a military reference found on many uniforms indicating rank. The McCain and US Army logos (far right) are traditional, proud, and derived from the military.

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Full article:
http://www.brandchannel.com/images/papers/443_Presidential_Brands_final_web.pdf

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Excerpted from BrandChannel “Best Global Brands: Lessons Learned” by Jim Thompson, September 17, 2008  

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Despite this past week, the year 2008, in general, has been an excellent one for developing nations. China, Brazil, Russia, India and other historically troubled economies continue to enjoy burgeoning middle and upper classes that are spending money on purchases they could not afford in the past.

In contrast, this has not been a good year for developed nations. The United States, and now every country tied to America’s radioactive financial service industry, is suffering because deluded borrowers and irresponsible lenders were circulating money they never actually had.

So, what can Interbrand’s 2008 Best Global Brands report teach us about the world’s top 100 brands in this bipolar global economy? Plenty.

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Lesson #1: Brand Engagement is Crucial

Here is how Merrill Lynch positions its brand online:

Merrill Lynch demonstrates its commitments to clients and shareholders through the firm’s emphasis on excellence, integrity and ethical behavior…

Though individual citizens share much of the responsibility, financial services touting a devotion to fiscal responsibility and economic viability failed to maintain brand engagement among their ranks, and the result has been a devastating collapse of trust and shivers of recession that are reverberating across the globe.

Investing in the proper training of employees so they embrace and live corporate brand attributes is a key component of branding, so it is not surprising that myopic financial service brands such as AIG, UBS, and Morgan Stanley have all dropped in Interbrand’s 2008 Best Global Brands rankings…

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Lesson #2: Luxury Brands Adjust to the Tides of the Global Economy

…Luxury brands benefit from a consumer-driven psychological buoyancy that allows them to paddle the currents that stir the global economy…

People like nice things. Unfortunately, most of us can’t afford the highest in quality, the finest in elegance, and the sleekest in design. The vast majority of the human race cannot afford a Rolex watch. However, as many economies around the world thrived during the past year, increasing numbers of people came within financial reach of luxury brands…as these demographics become accustomed to nice things, something compelling happens.

Ricca explains, “In a mature economy, a consumer’s self-confidence derives from being discerning rather than merely rich. Subtle details, which add depth to the product experience, are not within reach of the wealthy, but the wealthy cognoscenti.” Indeed, being able to afford Iranian caviar, and being able to deconstruct Iranian caviar, represent two different levels of experience with the luxury-brand lifestyle.

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Lesson #3: Know Thyself and Build Trust in Others

Branding communicates a set of values and promises to customers. When a brand delivers on those promises, trust is created, and a relationship based on shared experience and loyalty ensues. That bond is vital to brands, particularly when the economic climate sours and consumers shift their spending habits.

As the 2008 Best Global Brands Executive Summary states, “The uncertainty of a downturn drives consumers to want more for their money and demand a more emotionally rewarding experience for their hard-earned and limited cash.” In such times loyalty often competes with necessity. “It’s no longer a choice between Nike or adidas shoes. The question becomes, ‘Do I buy shoes or an iPod?'”…

Brands that have and continue to consistently build trust with consumers are better off in tough times than brands that seek to capitalize on the latest trend or exploit the sincerity of the moment…

Brands who aren’t true to who they say they are can be more susceptible to outside forces and peer pressure from changing markets and emerging trends. There is a difference between being thoughtful, engaged, and flexible, and simply being something you are not. Like trustworthy.

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Lesson #4: Brands are Defining Borders in the Global Economy

…With the incredible expansion of international commerce and advances in transportation over the past 100 years, immigrants—both legal and illegal—have become the blood coursing through today’s economic circulatory system. The phrase “Made in _____” should be expanded to say “Made in _____, by _____.” For example, “Made in the U.S.A., by Mexicans.” …Or even “Made in France, by some Algerians, four Russians, a Brazilian, and nine Saudi Arabians.”

Dr. Häusler explains that when consumers around the globe think of fine “Italian” menswear, they aren’t thinking of Italy, the actual country, at all; they are, in fact, collectively thinking of Italian brands such as Armani, Brioni, and Ermenegildo Zegna…Though particular nations may benefit from the halo effect of these brands, which is certainly warranted, credit should be attributed to the brands for the quality of their products and their admirable unwillingness to compromise the brand values that consistently ensure quality.

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Lesson #5: Technology Continues to Empower the Consumer

…Understandably, a brand’s worst nightmare is of being hijacked by disgruntled customers with plenty of attitude, heaps of time, and a high-speed Internet connection.

Brands, however, must respect social networking. Corporations spend millions of dollars on marketing research to understand what their customers, and potential customers, are thinking. With the Internet today, that information is everywhere.

Brands must deal with positive feedback by being grateful, intelligent, and gracious, reaching out to loyal customers and building mutually beneficial relationships with prospective ones. Negative feedback should be treated deftly and honestly, and never create the impression of being defensive, paranoid, or dismissive. How a brand reacts to negative feedback and criticism speaks volumes about its values, ethics, and maturity. Above all, respect the power of pedestrians on the Web…

After all, brands that don’t value input from their customers don’t have much value themselves.

At least that is what online consumers are telling us. 

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Full article:
http://www.brandchannel.com/start1.asp?fa_id=441

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Excerpted from BusinessWeek, “Best Global Brands: Gutsy marketers spend into the teeth of a recession”, by Burt Heim, September 18, 2008

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Every time a recession threatens, executives glare at the balance sheet and wonder aloud about one particular expense: brand building. Trimming the marketing budget can seem eminently sensible. After all, doing so won’t hurt product quality or, most likely, next week’s sales. As the business climate has worsened in recent months, a number of blue-chip companies have announced plans to cut marketing costs.

Then there are the other guys—companies that refuse to let tough times distract them from their long-term brand-building efforts. Sometimes they see a recession as the perfect moment to get a leg up on a weakened rival. Others strengthen their brands to ward off discount competitors. Still others feel they have a knockout new product that requires support.

“There’s always pressure to cut,” says Jez Frampton, chief executive of Interbrand, a brand consultancy, which typically advises clients to spend harder during a recession. Consumers, he argues, “are more conscious they’re spending their hard-earned money. It increases what they expect they should receive in return.”

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Still, it requires a gutsy chief marketing officer to ask the boss to invest in something as squishy as brand-building when the economy softens. CEOs typically set marketing budgets as a percentage of expected future revenue, a number that often shrinks in a downturn. Results-hungry investors, meanwhile, want marketing money spent on activities that ring cash registers now, like promotions or coupons. Even the competition can create temptations to play it safe. Advertisers closely monitor how often their ads appear vs. the competition’s. They call this their “share of voice.” A pullback by a timid rival gives penny-pinchers an excuse to pull back while still preserving share and save money. And most companies succumb to the pressure. During the last two recessions, in 1991 and 2001, overall ad spending fell.

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Real life isn’t so simple, of course. Many factors determine whether spending into a downturn will work, not least of which is the quality of the product and the advertising. Plus, the consumer you thought you knew, pre-recession, can be almost unrecognizable. When times get tough, people reexamine old habits and brand loyalties. Their tastes shift dramatically as they cut back. “The rate of change can be phenomenal,” says John Hayes, CMO at American Express. In the past year alone, he notes, consumers have far more negative perceptions of debt and spending on themselves.

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Defensive Spending
Many companies that continue to invest in their brands during a downturn are not so much going on the offensive as playing defense. AmEx is no exception. CMO Hayes says he has been “doubling down” in recent months on messages that promote trust and security.

Often a downturn ups the ante in a defensive battle companies have been fighting for years. In such cases, pulling back is a false economy. In 2000 Kellogg’s decided to increase its advertising spending to brand its cereals as premium products and avoid being commoditized. The strategy so far has worked. In the first six months of this year, Kellogg’s was able to pass along higher ingredient costs, while many other food companies couldn’t. “We believe it’s critical, when the economy gets tougher, that people should be seeing the value of our brands constantly,” says Mark Baynes, Kellogg’s chief marketing officer. “Brands are much more than flakes in a box.”

Kimberly-Clark, which owns the Kleenex brand, is also playing defense in the U.S. To justify charging more than its rivals, Kimberly-Clark is following the usual playbook for packaged-goods companies: creating new iterations of the same product—extra-soft tissues, anyone? It’s also trying to forge a more personal connection with consumers by spending heavily online and on TV. “The worst thing you can do,” says CEO Tom Falk, “is pull in your brand-building spending and become more of a commodity.”

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Offensive Spending
Then there are the companies that go on the marketing offensive. In some cases, they are perfectly suited to hard times and simply want to remind customers that they represent good value. Wal-Mart Stores, for example, has recently upped its advertising spending and returned to selling itself as a champion of the low- and middle-income consumer.

Some companies, having reached the top, are willing to spend to stay there. Louis Vuitton plans to continue to boost its marketing budget, downturn or not. “We never change the long-term strategy because of short-term problems,” says CEO Yves Carcelle. Louis Vuitton’s aim is twofold: keeping the aspirational masses hooked on classic luggage and handbags and ensuring that fashionistas continue to see the company as edgy.

Even underdogs can show some bite during a downturn. Amid slowing sales in the U.S., Volkswagen is going after a niche its Detroit rivals have pretty much left for dead: minivans. Pushing its new Routan minivan, says VW marketing manager Brian Thomas, strikes at the soft underbelly of his rivals: The Big Three have slashed ad spending on minivans, and the entire industry is running ads promoting fuel efficiency. That makes minivans a comparatively quiet niche, one in which its theoretically easier to grab consumers’ attention.

Edit by DAF

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Full article:
http://www.businessweek.com/magazine/content/08_39/b4101052097769.htm

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Excerpted from Fast Company, “Who Do You Love”, Dec. 19, 2007

Juan Valdez … the fictional coffee-growing icon … has been featured in ads for decades, helping establish “100% Colombian coffee” as a global brand.

Juan’s appeal: humble but uncompromising, dedicated to the hard work of raising coffee by hand. “Juan Valdez taps into a fundamental human truth … that the things we savor the most are the hardest earned.” People emotionally connect with Juan because he seems authentic, and authenticity is a priceless commodity.

In an increasingly shiny, fabricated world of spun messages and concocted experiences … “Authenticity is the benchmark against which all brands are now judged. ”

Overloaded by sales pitches, consumers are gravitating toward brands that they sense are true and genuine. Hunger for the authentic is all around us. You can see it in the way millions are drawn to mission-driven products like organic foods.

Playing the authenticity game in a sophisticated way has become a requirement for every marketer, because the opposite of real isn’t fake–it’s cynicism. When a brand asserts authenticity in a clumsy way, it quickly breeds distrust or, at the very least, disinterest.

Each brand must build its own primary source code for the authentic. Still, there are some larger lessons (and pitfalls) that anyone charged with overseeing a brand would be wise to consider.

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What does it take to be authentic?

It is a brand’s values — the emotional connection it makes — that truly define its realism.

A strong point of view. Authenticity emerges from “people with a deep passion for what they are doing.” So Martha Stewart is perceived to be authentic in large part because her ambitious recipes for Perfect White Cake and Chocolate-Strawberry Heart-Shaped Ice-Cream Sandwiches stand in the face of a world where food is mass-produced and preparation for the average dinner is measured by the number of minutes it takes to microwave the thing.

Serving a larger purpose. Every brand is governed by an ulterior motive: to sell something. But if a brand can convincingly argue that its profit-making is only a by-product of a larger purpose, authenticity sets in. “Just as there are purpose-driven lives … there are purpose-driven brands.” (Think Whole Foods)  “When a brand changes its story to better capture its customers’ dollars, it’s basically a poser … and people sense that right away.”

Integrity. Authenticity comes to a brand that is what it says it is. In other words, “the story that the brand tells through its actions aligns with the story it tells through its communications,” posts about Wal-Mart, the deception elicited a torrent of rebuke.

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How do you stay authentic even as you get big?

Ubiquity might not be toxic to authenticity, but it certainly dilutes it. When a brand spreads far beyond its home turf, its branches almost invariably (though not inevitably) weaken.

No business has confronted this challenge more urgently than Starbucks. As chairman Howard Schultz lamented to upper management in a bluntly worded missive on Valentine’s Day, the company’s rapid growth has “led to the watering down of the Starbucks experience,” and the company’s stores “no longer have the soul of the past.” .”

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Can you be authentic when you’re trying to be authentic?

Authenticity is necessary, but it cannot be compelled. Coerced by corporate fiat, their “warmth” can wear out its welcome and feel contrived. 

And therein lies an authentic paradox: A brand doesn’t feel real when it overtly tries to make itself real. To the hypertargeted consumer, baldly billboarding a brand’s message smacks of insincerity.

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Can you be cool and still be authentic?

“Fortress brands” are deeply rooted in their heritage and values, they are inflexible, unmovable, and ultimately stuck in time. “That’s the problem with a dogmatic, static brand … the competition will outflank it, and the world will pass it by.”

Levi’s, for one, is a brand that appears to have slipped into the fortress category. The king of denim, whose founder stitched and riveted the world’s first pair of jeans in 1873, has lately missed out on the fast-changing trends of an industry that it created.

To maintain its integrity, a brand must remain true to its values. And yet, to be relevant–or cool–a brand must be as dynamic as change itself. An authentic brand reconciles those two conflicting impulses, finding ways to be original within the context of its history.

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Full article:
http://www.fastcompany.com/magazine/115/features-who-do-you-love.html

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Excerpt from Marketing Daily “Campbell’s Launches Latest V8 Extension: Soups” September 8, 2008

The odds that consumers will berate themselves because they “could’ve had a V8” have just gotten slimmer.

Campbell Soup Company, which has expanded V8-branded juices to more than 20 varieties in recent years, is now extending the brand to a product category it knows pretty well: soup…

The product launch will be supported with print and TV spots, both slated to begin mid-September. The tagline is simplicity itself: “Introducing New V8 soups from Campbell’s.”

If successful, the soup line will be another example of Campbell’s mastery of using V8’s clearly defined brand mission–“To help more people get more vegetables, every day”–as the platform for a growing number of products bearing the familiar, trusted, 75-year-old V8 name…

The appeal of the much-pursued “master” or “mega” brand concept is clear: Extending an established brand’s power to more categories and consumers to realize greater sales volume, efficiencies and margins. However, many brands have failed to realize volume and share-of-market goals with extensions.

…Some brands, including V8, have the substantial advantage of being able to offer and market/advertise the same common, core benefit (the benefits of vegetable nutrition) across products…But in other cases–as with the drug category and Tylenol–while the brand personality/trust factor has real value, it’s the specific benefit being sought through a specific drug (long-lasting pain relief for arthritis versus quick pain relief for common headaches) that must be the main focus of each new product’s positioning and marketing strategy under the same brand.

Edit by SAC

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Full article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=89983

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