Archive for the ‘Mktg – PR – Public Relatios’ Category

The perils of celebrity endorsements … sponsors tell Lance to peddle somebody else’s wares.

October 22, 2012

Punch line: Despite sticking by athletes during controversial times, Kobe Bryant and Tiger Woods included, Nike has dropped Lance Armstrong from his contract as the doping allegations continue.

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Excerpted from the New York Times’, “Armstrong is Dropped by Nike as he Quits Role at His Charity”

A week after the United States Anti-Doping Agency made public its evidence in a doping case against Lance Armstrong, Armstrong on Wednesday stepped down as chairman of Livestrong, his cancer foundation, the organization that inspired millions fighting the disease.

The fallout from the antidoping agency’s report also prompted Nike, the company that stood by Armstrong through more than a decade’s worth of doping allegations, to terminate his contract.


“I have had the great honor of serving as this foundation’s chairman for the last five years and its mission and success are my top priorities,” Armstrong said in a statement. “Today therefore, to spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship.”

Armstrong, the seven-time Tour winner who denies ever doping, founded the organization in 1997 after he survived testicular cancer and it sold millions of yellow Livestrong wristbands and went on to partner with Nike to sell millions of dollars of Livestrong gear.

In a statement on Wednesday morning, Nike said the evidence that Armstrong had doped was so overwhelming that it could no longer partner with him. In the past, the company stood by athletes like Kobe Bryant, who was accused of sexual assault but never convicted, and Tiger Woods, who gained international notoriety for his extramarital affairs. Nike severed ties with Michael Vick when he went to prison for his role in a dogfighting ring but later re-signed him.

“Due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade, it is with great sadness that we have terminated our contract with him,” the statement said. “Nike does not condone the use of illegal performance enhancing drugs in any manner. Nike plans to continue support of the Livestrong initiatives created to unite, inspire and empower people affected by cancer.”

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Lessons from Toyota’s quality snafu

January 29, 2010

Ken’s Take:

(1) Kudos to Toyota for stepping up with a J&J Tylenol-like response in the market … especially since the analogous Audi problem turned out to be bogus.  It’ll hurt Toyota  in the short-run, but pay dividends in the long-run

(2) Press reports have a tinge of “good for them, good for US” … seem to overlook that most of the vehicles are made in the U.S.  Hmmm

(3) GM will regret its direct attack during during Toyota’s sales cessation period.  I’m as competitive as the next guy (ok, more competitive), but what goes around comes around … Just watch and remember.

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Consumer Reports, the bible of the car-buying public, now rates Ford’s quality higher than Toyota’s.

Excerpted from WSJ:Toyota: Too Big, Too Fast, Jan. 28, 2010

Three or four years ago senior Honda executives demanded to know from their underlings how arch-rival Toyota could expand its production and sales so quickly and still keep its quality intact.

Now they’re getting the answer: Toyota’s once-vaunted quality actually was eroding.

In fact, Consumer Reports, the bible of the car-buying public, now rates Ford’s quality higher than Toyota’s.

General Motors held the title of “world’s largest car company” for decades before things began to go wrong there. Toyota grabbed the top spot last year, and things started going awry in just a matter of months.

This week the company suspended the sale of eight different models, including the popular Corolla, Camry and Avalon, for potential safety problems. Next week Toyota will halt production at the five North American factories that make those vehicles.

The company also expanded a recall that already was the largest in automotive history. Some 4.8 million Toyota cars and trucks might suffer from sticking accelerator pedals or faulty floor mats that seem to grab the accelerator and can cause the car to accelerate out of control. Several deaths have been attributed to the problem.

How could this possibly happen to the car company that was the undisputed leader in quality, the company that all the others from Germany and America and even Japan wanted to emulate? The answer is almost too simple.

Toyota is suffering from trying to get too big, too fast. It went on a headlong expansion spree around the world.

In doing this Toyota abandoned one of the pillars of its conservative culture: never building a new product in a new factory with a new workforce.

Any new Toyota factory, anywhere in the world, would first build a vehicle that Toyota was making at one of its existing plants. That approach minimized quality-control variables.

But in 2006 Toyota started building its first full-size pickup truck at a new factory with a new workforce in San Antonio, Texas. That truck, the Tundra, was recalled both for the gas-pedal issue and for another problem, potential corrosion of the vehicle’s frame.

In 2005 Toyota recalled 2.38 million vehicles in the U.S., which was slightly more than the number of cars and trucks the company sold in America that year. 

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Another question is how quickly Toyota can resolve the unintended acceleration issue. It’s a problem with a curious history.

In the mid-1980s Audi was accused of having a similar problem, and its U.S. sales almost evaporated. But the issue, fed by media hysteria, turned out to be bogus.

Toyota’s acceleration problem appears to be the real thing. The company has pinpointed specific likely causes—linkages in the gas-pedal mechanism and the size of the floor mats.

In an era when cars have more microchips than many desktop computers, these things are amazingly low tech.

Reports yesterday said Toyota was zeroing in on a repair: inserting a “spacer” in the pedal mechanism that would increase the tension in a spring and help prevent sticking.

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The company remains the leader in gas-electric hybrid technology. Toyota is reversing its overexpansion and reducing excess capacity by closing a plant in California, and postponing plans to build another plant in Tupelo, Miss.

Because it is Japan’s biggest auto maker by far, Toyota tends to be insular. One pressing need is for Toyota to develop a new generation of talented and trusted local leadership in the many countries where it operates. It’s impossible for a small inner circle in Japan to run a global company effectively in the long run. 

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The immediate question is what Toyota’s dramatic moves will do to its reputation.

Consumers might (and should) give the company credit for taking unprecedented and costly action in the interest of protecting their safety. But many Toyota owners are worried, and brand-loyalty ratings have begun to drop.

In last year’s J.D. Power Customer Retention Survey, Toyota lost the top spot to Honda for the first time since the poll began six years ago. Toyota and Lexus still hold the second and third positions in the survey, but the trend has to be discomfiting.

General Motors, meanwhile, has begun offering special discounts to Toyota owners who trade in their cars, a marketing move that might backfire the next time GM has a big recall.

PRs more challenging since profit has become a 4-letter word …

November 11, 2009

TakeAway:  In an age where company reputation is playing an increasingly important role in sales generation and growth, the decline of traditional business media could cause big problems for marketers.  Companies must now take the laboring oar and find creative ways to ensure that their preferred message makes it to the consumer.

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Excerpted from Strategy & Business, “What a Declining Business Media Means to CEOs” By William Holstein, September 28 2009

The business media is mired in deep economic crisis … the surviving business magazines are much thinner … Newspapers are suspending publication of stand-alone business sections and downgrading their coverage … Even at relatively healthy business news outlets, there is a decline in the quality of business coverage …

One might argue that the weakened state of business media doesn’t matter much … But the consequences for business decision makers are three-fold, and grave.

First, it means that business coverage could become more negative toward profit and enterprise than it is today … Criticism of corporations will be less nuanced, less aware of context, and less insightful. Competent, complacent, and craven companies — or divisions within companies — will all be tarred with the same brush.

Second, the decline in business journalism gives corporate decision makers less of a platform to display and test their own company’s strategy. “It means that there are fewer opportunities for a CEO to get his or her story into the media,” says CNN …

But perhaps the worst effect is the most subtle: Corporate leaders now have fewer opportunities to learn from one another’s experience, or even to know what’s going on in their regions and industries …

What specifically should a corporate leader do differently in this environment? The first priority is to maintain the visible public presence of his or her own company — to build its reputation as a reliable entity, in a time when the integrity of many companies has come under scrutiny …

Meanwhile, it’s more important than ever for CEOs to develop core communications messages that go beyond the issue of profitability and stock price. GE has been very effective with its Ecomagination campaign. Companies must define the way they appear in the world at large …

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Trenchcoat marketing … it’s not what you think.

October 8, 2009

BrandChannel, Can BurberrySpace Help Reposition A Luxury Fashion Brand?, September 17, 2009

Burberry, intent on holding onto its recently upgraded cutting-edge image, will launch its own social networking site.

The site, Art Of The Trench, will feature user-submitted pictures of people sporting the brand’s famous trench coat.

Burberry’s goal is to strengthen ties with existing customers while attracting new faces — younger consumers they hope will be inclined to spend disposable income on luxury items.

The premium site is another step in Burberry’s campaign to reclaim its brand as a classic label with a twist of cool, after years of knockoffs and thuggish associations had morphed it into “checks for chavs.”

But do the kids really want Facebook for trenchcoats?

Burberry hopes so.

If the brand’s Facebook page — currently boasting over 666,000 fans — is any indication, their updated, traditional-meets-hip brand may turn out to be a good social networker.

Full article:

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Employees Are Becoming the Newest TV Stars

May 8, 2009

Excerpted from Forbes, “Forget Celebrities. Employees Make Compelling Ad Stars In Tough Times” By Helen Coster, Apr 17, 2009

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A few employees who haven’t lost their jobs suddenly have a new one: advertising.

At a time when consumers are distrustful of big companies and their leaders, marketers are putting employees in ads in an effort to make their brands seem more transparent and trustworthy. These ads, from companies like Ford Motor, ExxonMobil, and Alabama Power, among others, are geared to make customers and employees feel better about these companies. Honda Motor Co. features at least 30 employees, including Chief Executive Takeo Fukui, and a few luminaries, including race car driver Danica Patrick, in three seven-and-a-half minute online films dubbed “Dream the Impossible” …

Nationwide Insurance is taking a similar approach with its new TV, print and radio campaign called “I Am On Your Side.” The TV ads feature Nationwide claims adjusters and customer service representatives talking about their experiences on the job. In one spot, property claims representative Terry Medley talks about how people prepare for a “prize fight” before they talk to an insurance adjuster. “We wanted to come across as authentic and genuine,” says Nationwide spokesman Michael Switzer …

[T]he TV spots … mark a sharp departure from the company’s previous ad effort. Themed “Life Comes at You Fast,” it featured celebrities such as Kevin Federline and Fabio showing the bad things that can happen to people when they aren’t prepared.

In some cases, marketers hope to demonstrate that by treating employees well, they will do good things for customers too. A current print ad from Verizon Wireless talks up innovation by touting its training programs for employees, including Philip Morisky, who is pictured teaching his son how to ride a bike. The tagline: “Our people. Our network.”

Companies tend to trot out employees as spokespeople when the economy or the company is in trouble. “Because of the financial crisis, there’s a growing anger about big companies in particular … People think that CEOs are overpaid, that big companies don’t respect the environment. … This is the natural reaction of some companies to say: “We’re on the consumers’ side. We’re not the enemy.”

Will people really buy more cars if they relate to the Average Joe in a Honda ad? “I think in the long term [they will],” says Honda’s Center. “It’s always controversial when you do institutional advertising but, as a marketer, you have to be able to juggle a couple of balls. One of them is to sell products and generate revenue in near term while continuing to build the foundation your house is standing on. That’s why we’re doing these things, even in these tough times.”

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A Tough Sell: McDonald’s Targets Moms

January 23, 2009

Excerpted from Washington Post, “McDonald’s Courts Moms As Fast-Food Emissaries: Chain Enlists Its Toughest Customers to Talk Up Menu’s Healthful Side “, by Michael S. Rosenwald, November 20, 2008

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The only obstacle between kids and their french fries: Mom.  “They are probably one of the most victimized foods,” says McDonald’s nutrition director.

Plausible reason: A medium order of fries at McDonald’s, besides the delectable taste, includes 380 calories, 270 milligrams of sodium and a color preservative called sodium acid pyrophosphate. But McDonalds points out that fries are rich in potassium and are “a really good source of fiber.”

One mom replies, “Once you throw them in grease, you kind of ruin it.”

Another says, “Potassium is good in bananas.”

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But McDonald’s thinks it has a positive case to make and has recruited mothers to go behind the scenes of the company’s operations, meet senior executives and then communicate what they see via the Web, along with appearing in video of their travels.

The idea behind the company’s Quality Correspondents program: If McDonald’s can win over moms by showcasing food quality (the eggs in Egg McMuffins are real) and highlighting healthful options, the company can brighten its image at a crucial time in the arc of the fast-food industry. Customers, bombarded with news about food recalls, are paying more attention to safety, quality and ingredients — despite still not wanting to wait very long for their lunch. The message takes on heightened importance now, as strapped parents bargain in their heads over whether a McDonald’s meal can take the place of higher-priced options.

McDonald’s executives are betting that if they can shatter myths about the company’s food — a slaughterhouse visit shows chickens being handled humanely but also proves McNuggets contain chicken — and display an obsessiveness with food safety and quality to a select group of moms, the message will trickle through society.

“When people are asked to define who they trust and who they believe, the answer is people like themselves, not journalists and not academics.”

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A public relations milestone …

October 1, 2008

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“A man claiming to be the spokesman for pirates holding a Ukrainian ship laden with Russian tanks said they wanted $35 million to set it free.”

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Ken’s POV: Since when do pirates have a “spokesman” ?

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