BrandDigest

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BrandCoach's BrandDigest is a handpicked selection of must-read articles on branding, brand strategy and brand management. In most cases you'll find an excerpt (or a management summary) of the article and a link to the original publication. Feel free to comment or to suggest other reading material you want to share with the BrandDigest community.

Is Your Fighter Brand Strong Enough to Win the Battle?

Five Steps to Ensure Success.

Fighter brands can be tempting, but their history is a discouraging roll-call of failed campaigns that inflicted little damage on targeted competitors and resulted, instead, in significant collateral losses for the company that launched them.

_______________________________

By Mark Ritson

It's an increasingly common dilemma for CMOs with brands in the middle or top end of the market. Should you tackle the threat head-on and reduce existing prices on your premium brand, knowing it will reduce profits and potentially damage brand equity? Or should you maintain prices, hope for better times to return, and in the meantime lose sales from customers and support from your CEO? With both of these alternatives often proving equally unpalatable, many marketers have decided on a third option: launching a fighter brand.

It's one of the oldest strategies in branding. Unlike traditional brands that are designed with a set of target consumers in mind, fighter brands are specifically created to combat low-price competitors that threaten to steal market share away from a company's premium brand. When fighter brands work, they not only defeat low-priced competitors, they also open up new markets for companies to pursue. My research into fighter brands reveals five key strategic steps you should take to ensure your fighter brand will emerge victorious.

The first step is to ask yourself if a fighter brand is really what your organization needs. Can you afford to spend precious resources on a new, low-priced brand at a time when perhaps you should focus investment and management attention on your existing portfolio of brands? Too often companies must embark on significant cost-cutting and re-pricing strategies for their premium brands after acknowledging that their respective fighter brand strategies have failed. These crucial strategic transformations are usually delayed for years while organizations conceive, execute and finally retract their fighter brands. Start your fighter-brand campaign by questioning whether you even need one in the first place.

If you decide to launch, the second step is to prevent cannibalization. Most fighter brands are created explicitly to win back customers who have switched to a lower-priced rival. Unfortunately, once deployed, many have an annoying tendency to also acquire customers from a company's own premium offering. The best fighter brand strategies, like Procter & Gamble's use of Luvs in the diaper category, not only factor in the degree to which the brand will steal from its sister brand, they also include strategies to minimize the amount of cannibalization incurred. P&G specifically removed innovative features from Luvs and invested heavily in premium brand Pampers to ensure that they attacked their respective competitors more than they fought with each other.

Third, create a fighter brand strong enough to bury the competition. Fear of cannibalization often leads companies to overprotect their premium brands at the expense of the combative potential of their fighter brand. Make sure you market-test your fighter brand, and be prepared to recalibrate its price and performance so it finds the sweet spot between cannibalizing your premium brand and failing to damage your rivals.
(...)

Fourth, give your fighter brand a sustainable business model. While a fighter brand is designed to attack a low-price rival, it also has to do so profitably, or it won't maintain those attacks long enough to eventually defeat its enemy. This was the key mistake General Motors made with Saturn, which successfully stole market share from Toyota and Honda, but incurred huge operating costs. With GM losing $3,000 for every Saturn car it sold, the company was forced to cut production costs. In turn, Saturn lost its edge, and Japanese imports resumed their domination of the U.S. market. (...)

The final step to fighter-brand success is early and frequent consumer focus. Normally, a successful brand has its genesis in the recognition of an unmet consumer need. But fighter brands originate with a competitor and the strategic success it has achieved, or threatens to achieve, against your organization. The DNA of a fighter brand is therefore potentially flawed from the very outset: It is derived from company deficiencies and competitor strengths, not a focus on consumers. To avoid a potentially fatal competitor orientation, apply the same degree of consumer focus for a fighter brand as you would any other launch.

(...)

______________________________

These are only a few excerpts. Read the full article here.

Originally published in Advertising Age CMO Strategy, October 13, 2009

Mark Ritson is a visiting associate professor of marketing at MIT Sloan School of Management. His article Should You Launch a Fighter Brand? appears in the October issue of Harvard Business Review.

An analysis of “a brand is”

A Brand Is a bundle of values and attributes that define a product or service’s value which is delivered to its customers, and the way of doing business which is the basis of a company’s relationships with its stakeholders

_______________________

By Denise Lee Yohn

The folks at BLACKCOFFEE have been inviting folks to complete the thought, “A Brand Is…” 

I was so fascinated to read the range of responses that I decided to take a closer look.  I wanted to see what common themes emerged among people’s definitions of “Brand” and what we could learn from them.

(...)

Here’s what I found:

1.    Some used the historical definition of a brand when branding was used on cattle, or suggested a brand is something which functions like a brand on cattle.

A brand is a label created by a company.—lix
A brand is a mark made by burning with a hot iron to attest manufacture or quality or to designate ownership—Bill
A brand is a different name for the same product—yo
A brand is a mark made by burning or otherwise, to indicate kind, grade, make, ownership—@SIGEPJEDI
A brand is a logo, a font, a long-standing celebrity spokesperson. It’s a memorable commercial. It’s a quality product with quality ingredients. It’s consistency.—Jocelyn Geboy
A brand is an iron tool heated in the fire and used to indicate ownership of cattle.—Stephen

2.    Some chose simply to say what a brand is not. (...)

3.    Some responses were negative towards brands. (...)

4.    Some people spoke of the financial value of a brand.

A brand is something you pay extra for—Mark
A brand is the difference between a 99¢ cup of coffee $4 venti, foamy, ristretto, doppio expresso con panna cappuccino.—Ken Peters
A brand is your most important asset if you own it or rely on it for income.—Kendall Langston

5.    Many people suggested a brand is “in the eyes of the beholder,” not under the control of the companies or marketers who promote it.

A brand is something companies try to control but often can’t—Jordan
A brand is perception—accidentalthinking
A brand isn’t what you say it is, it’s what consumers say it is – and you’d better listen, because they’re vocal.—Ken Peters
A brand is a set of associations the audience has and how they see your business activities—@alexisvandam
A brand is a user generated meaning—Luis Miranda
A brand is the sound of your voice coming out of someone else’s mouth—Bill Gathen
A brand is what people outside a company perceive it to be based on everything they hear, read and see about that company.—Lewis Green
A brand is a recipient built by marketers but filled with people’s thoughts, frustrations, use, likes, dislikes… experience.—Rafael Lizárraga
A brand is perception—@kandacehudspeth
A brand is a collective perception in the minds of consumers—@faris
A brand is whatever I perceive it to be—Arvind
A brand is perception—Kandace
A brand is the sum of audience associations and expectations, both tangible and intangible, that surround your offerings.—@ericbrody
A brand is what everyone else sees—vera
A brand is how you are perceived by others and you get the opportunity to build your brand up – or tear it down with every customer interaction.—Stephen Lynch
A brand is the perception of a product.—David Mitchel
A brand is what they say about you after you have left the room…—Rob Levinson
A brand is everything people believe about your product, real or imagined, true or false.—Roger Dooley – Neuromarketing
A brand is the collective views of the people who care.—David Meerman Scott
A brand is the idea held in the minds of the customers of the experience they’ll have, and in some case what they will become, by purchasing your product.—Steve Farnsworth (@TheRealPRMan)
A brand is your reputation, your legacy. It is how you are perceived by an audience that must find you relevant.—Lida Citroen, LIDA360.com
A brand is how you are perceived by others—Stephen Lynch
A brand is useless without consumers.—Bryant Florez
A brand is what the public believes it is, not what companies say it is.—Jonathan Moore
A brand is what customers buy, not what businesses sell.—David Brier
A brand is all that stuff in the head of people ‘out there’ that you often have very little control over—Jon Howard
A brand is about people’s reactions to an organization’s actions.—Mark Gallagher—Brand Expressionist®, BLACKCOFFEE
A brand is a perception in the minds of others. It’s what they think you are, not what you think you are. It can be an image, a voice, a personality or a product/category, but it boils down to whatever people think when they hear the name.—Janice Dottin
A brand is [mine]—Kevin Gatta

6.    Yet, others responses spoke about a brand as a company’s values and/or corporate culture.

A brand is vision-led culture.—Steve Barnett
A brand is much more than a logo. It should represent the core values of your company, product, or service. A good brand should lead your organization internally, and clearly represent what you stand for to consumers.—D.K. Smith
A brand is your company’s DNA.—Nicho Valadez
A brand is a set of values you agree with.—Michael Ancevic

7.  A lot of people’s responses were about feelings – either saying a brand evokes feelings or that a brand is a feeling itself.

A brand is the feeling I get when I think about a company.—Jon
A brand is my connection to the product.—Missy
A brand is a gut feeling—luke
A brand are the hopes and expectations you have of a product and the company that makes it.—edward boches
A brand is the emotion invoked by a product—Mansi
A brand is a feeling evoked by simply thinking of the brand name.—Greenwala
A brand is an evocation—http://sidere.wordpress.com
A brand is how it makes you feel—Ld
A brand is butterflies or knives in your stomach—David Armano
A brand is a person’s gut feeling about a product, service, or organization.—Marty Neumeier, Neutron
A brand is a perception and lingering feeling that lives in the minds of your market. It’s based on emotion and defined by the experience people have with your brand.—Carol Chapman
A brand is an emotional short-cut to feeling good.—Anthony
A brand is what captures a consumer’s heart, not just a mind—Heidi Foreman
A brand is a collective emotional response.—Michael Troiano
A brand is something that evokes everything from DESIRE … to HATE.—Stephen Cocca
A brand is an expectation of receiving a feeling by way of an experience.—Tom Asacker

8.    Many people offered up answers describing what a brand does – e.g., generate demand. (...)

9.  Some explained a  brand functions like a memory tool.

A brand is something people remember.—EV
A brand is what you would want another person to remember first thing in the morning and think of just before he or she goes to bed.—Strategic Growth Advisors
A brand is the scar left behind on a person’s brain.—Zach K.
A brand is a concept seared into the mind.—Mark
A brand is like knowing exactly what to reach for when you cut your finger.—Jordan Julien
A brand is a product idea/vision that gets burned into consumers’ minds.—RcSim

10.    Others described the differentiating function of a brand.

A brand is what you have when everything else is equal.—Michael
A brand is unmistakable and unique.—@bradleyphoto
A brand is a developed and distinctive concept—-unknown
A brand is all you put on something that is equal to everything else in order to make it different—sg
A brand is a how people identify and differentiate goods and services.—Bobby
A brand is a token of difference.—Minko Dimov, creative director at protobrand
A BRAND IS THE RECOGNITION THAT ADDS SUPER-VALUE TO A PRODUCT THAT COULD DEFINE THE UNIQUENESS IN IT!!—Naveen Kumar
A brand is your face in this world to differentiates you from others—Karl Varley
A brand is a unique and deliverable claim of distinction supported by evidence of performance.—Ro Breehl

11.    A brand is an image or personality to some folks.

A brand is PERSONALITY!—Trish
A brand is the face you put on when you go out in public—Doug Besser
A brand quite simply is your voice, your vibe, your essence. It’s how you’d like to be perceived you in your ideal reality. There are three views: How you see yourself, how others see you and how you really appear. In many instances, companies use the equivalent of plastic surgery, attractive lighting and couture to craft their personae. Standards and guidelines aside, Few rarely “live” the brand, which in itself is a somewhat overused term.—David Weinstein
A brand is like a purpose-led person’s personality.—Harasha Bafana
A Brand is Attitude. It’s what you stand for, illustrate in visuals, sound like, how you act, what you stand for and how you communicate. It’s the sum of all impressions perceived in every brand channels.—Karsten Kjems
Very simple…an IMAGE of what your product/service is conveying to the masses.—Judy
A brand is your first impression—Joel Beukelman
A brand is what people see when they look at you and your product—Aaron Irizarry
A brand is more than a logo or a website. It’s a complete personality. One that drives the focus of the audience and engages them on a personal level.—Troy

12.    It’s an identity to others.

A brand is who you are.—John Turmelle
A brand is…expressing your own identity.—Kim Brown Irvis
A brand is establishing your sense of identity—MIke B
A brand is a part of someone’s identity—Mark Begin

13.  And a story or drama to still others.

A brand is a fairy tale.—@issamheddad
A brand is a story in which the author and the audience are both in control.—@mattquint
A brand is story or association in the mind of consumer.—Ritu Sinha
A brand is performance art.—Mike Wagner, CEO White Rabbit Group
A brand is part theater, part magic, part inspiration and whole-hearted passion. The stage is the mind of your audience. Let the production begin.—David Brier, Chief Gravity Defyer
A brand is a story told in the marketplace. Customers are telling your story with or without your help. Align the right brand message to the right channel of the consumer’s social grid to provide a multi-touch experience.—Matthew Kruchko, Applied Storytelling

14.    Some responses spoke of a brand as a promise.

A brand is a promise—@brennahanly
A brand is why I keep coming back, when that brand keeps its’ promise.—Dave Bradley
A brand is a promise, not something that happens when you spend mountains of money advertising.—Restaurant Marketing
A brand is delivering on a promise – perhaps inspired and initiated by a Company – but driven & actualized by the customer.—Robert Collins
A brand is a promise which when kept creates preference—Justin Basini (although not my defnition but I love it)
A brand is promise delivered to your customers.—Jeffrey Hayzlett, CMO, Kodak
A brand is a promise fulfilled—Lauren Hughes
A brand is a promise of performance in the mind of the consumer.—Jack Birch
A brand is the equilibrium between people’s emotion and a company’s product, service; in short, a brand is the value a company promises to its clients—Colin
Some thought a brand is more of a relationship.
A brand is meaning & relationships—Juanjo
A brand is a mutual friend.—farfariya
A brand is a relationship driven by the customer experience—Fred Page
A brand is a relationship.—Dave Bradley
A brand is a long term profitable bond between an offering and a customer. This relationship must be based on economic, experiential & emotional value. Backed up by operational excellence & consistently monitored, measured and improved.—Marcus Osborne, Malaysia
A brand is a connection between the company and it’s customers—Stephan Lenting
A brand is a proxy for a relationship.—Ben Kunz
A brand is an experience to be shared with others or kept to ourselves. A brand is the personal interaction we have with a product, service or person. A brand is as fragile or as strong as friendship. If it breaks its promise, the relationship may be in jeopardy.—Kneale Mann

16.    And some offered that a brand is an experience.

A brand is what i experience when i get in touch with its products and with it communications efforts—maria
A brand is something you trust because it gives you lifestyle experience—http://scratchvertise.blogspot.com/
A brand is a customer experience — including perceptions, like, dislike or apathy — of a product or service.—jeff
A brand is the reaction one has to a company, product or service based on the sum total of experiences, directly or indirectly, said person has had with company, product or service.—Joel Mier
A brand is the entire experience a consumer has with every touch-point of your brand, the emotional connection they have with it and the interaction itself represents the opportunity for a brand to transact an experience with the consumer that will not only deliver the delight they expect but also provide them with unexpected value and satisfaction that is unique unto your brand alone.—John Walsh – FlyLite
A brand is a summary of thousands of touchpoints.—Tyrale
A brand is the aggregate of all the tangible and intangible interactions one can have with it.—John Schneider
A brand is the emotions, feelings, and thoughts generated from the experience of a place, idea, or product.—Seth Hosko
A brand is an experience that is shared between customers.—Kneale Mann

17.    Some responses didn’t fall into one of the above groupings – either because they spanned multiple themes, or because they introduced a different thought. (...)

18.    And some offered up definitions similar to mine:

(...)

My response:
A Brand Is… a bundle of values and attributes that define:
•  a product or service’s value which is delivered to its customers, and
•  the way of doing business which is the basis of a company’s relationships with its stakeholders

_____________________

This is only an excerpt from Denise Lee Yohn's original post.

Read more here.

Published on Brand As Business Bites (TM), on Sept. 6th, 2009

BruTwestival

Be sure to be there ... !

True Marketing Doesn't Just Sell the Story

If CMOs are truly to be growth champions for their corporations, they can't simply rely on traditional marketing and brand-building techniques.

To Achieve Top-Line Growth, CMOs Must Design New Businesses

______________________________

by Robert C. Wolcott

In nearly a decade of research, my colleagues and I have found that established companies increasingly are successfully building new businesses on a repeated basis, a process we call corporate entrepreneurship. Marketing -- true marketing, not just selling the story but helping create it -- must play a central role. True marketing is about understanding current and potential customers better than anyone else, translating those insights into powerful new offerings and experiences, and creating ever more effective and efficient paths to market.

In other words, marketers must design new businesses, rather than just launch new products.

Business design is the essence of marketing. It is also the most vital component for successful, game-changing innovation. Apple understands this. It doesn't just create new products. Marketing prowess played a much greater role in the iPod and iPhone's success than technology, and I don't just mean great ad campaigns. With the iPod, Apple showed it understood better than competitors what customers would demand. It created an exceptional (and legal!) music-downloading experience and built the marketplace infrastructure, such as iTunes and Apple retail locations.

Our research shows that innovation can apply to any aspect of how a company does business. While that's not surprising, what should be most impressive to marketing professionals is the range of factors marketing organizations can affect when it comes to creating new businesses.

Obviously one of the most commonly thought of types of innovation is a breakthrough new product or service. P&G's Crest SpinBrush was introduced in 2001 and became the world's best-selling electric toothbrush by 2002 based on its ease of use, portability and affordability. New products and services are still fundamental.

But there are other, perhaps more subtle and equally powerful ways companies can create new value. Starbucks, of course, convinced Americans to pay $4 for coffee, and it didn't invent anything, at least not in terms of technology. Its innovation was about an exceptional customer experience, for which customers paid a premium. It was a whole new mission that changed American culture.

Here are types of innovation where marketing should play a central role:

1. Customer experience
   Customer-experience innovation isn't limited to consumer companies. If you have customers, you have a customer experience, whether you know it or not. Global cement behemoth Cemex created a satellite GPS dispatch system to radically enhance its responsiveness to customer orders, taking the industry standard from more than 24 hours down to 30 minutes in many markets.
2. Customers
   Customer innovation involves discovering new customer segments and/or uncovering unmet or unarticulated needs. Virgin Mobile became a successful late entrant into the U.S. cellular market by focusing on the underserved segment of Americans under 30. Within three years of its launch, it had attracted more than 4 million subscribers in very competitive markets.
3. Value capture
   Value-capture innovation involves discovering new revenue streams, innovative pricing mechanisms and new ways to get paid by customers or partners. Google's paid search and Allstate's accident-forgiveness feature on auto-insurance policies are innovative ways in which companies have captured value in unique ways. (Allstate charges more for the original policy, while consumers no longer feel victimized when accidents send their rates skyward.)
4. Presence
   Presence innovation creates new distribution channels or innovative points of presence. Health clinics in Walmarts and pop-up retail stores are current examples of innovating presence.
5. Networking
   Networking innovation entails the enhancement of intelligence, flexibility or effectiveness through technology-supported networking. McDonald's Moms' Quality Correspondents community offers selected mothers the opportunity to communicate with the fast-food giant and each other both online and in person.
6. Brand
   Brand innovation leverages or extends the brand in creative ways. Virgin is probably the most-recognized example.

__________________________

Robert C. Wolcott is the founder and executive director of the Kellogg Innovation Network at the Kellogg School of Management, where he teaches innovation management and strategy. His book, with Michael J. Lippitz, "Grow From Within: Mastering Corporate Entrepreneurship and Innovation" (McGraw-Hill), will be available this fall.

This is only an excerpt. Read Robert C. Wolcott's full article here.

Published in Advertising Age / CMOStrategy : September 02, 2009

How Can Business Move From An Age Of Exploitation To An Age Of Regeneration?

Bauhaus Is Not Just A Design Movement. What Business Can Learn From Bauhaus? How Can We Move From The Industrial Age - An Age Of Exploitation To An Age Of Regeneration?

____________________________

By Idris Mootee

I've been a Bahaus follower for 30 years. I am still fascinated by some of work produced during that period. A Bauhaus Summer School workshop was hosted last month by Michael Zinganel who is a freelance architecture theorist, cultural historian, curator, and artist from Austria. The workshop was designed in a way to bring the Bauhaus sites closer to its local residents through more everyday interaction with special postcards, downtown dialogues, Bauhaus city game, and by projecting super sized figures on the walls of the 1920's Bauhaus building. I think that’s really cool. I wish I could join them for a few outdoor workshops.

Talking about Design School, the Bauhaus was the most influential art, craft and design school of the century. They are definitely more than just design. The Bauhaus teachers were very  influential people including artists such as Paul Klee, Lászl Moholy-Nagy, Wassily Kandinsky, Walter Gropius and Marcel Breuer. I am a big believer of multi-disciplinary thinking and Bauhaus was the first to advocate multi-disciplinary thinking with the goal that students should be able to do work from graphics, products to architecture and every student needed a combined practical and theoretical education (which was revolutionary at that time).

The result was a successful integration of design theory with the industrial process. Bauhaus reacted to social change by creating an aesthetic relevance to the requirements of the time. Bauhaus protagonists wanted to bridge the gap between the social idealism and the commercial reality and to promote a response to the emerging technological culture. The aim was to take advantage of the possibilities of mass production to achieve a style of design that was both functional and aesthetic. Objects were to be designed to have "simplicity, multiplicity, economical use of space, material, time and money which looks as modern as anything in production today. What would a revive Bauhaus movement means within the context to today's social technological advances?

What is interesting and not well known is that Bauhaus was not just a design experiment, it was a political experiment a well. Some suggested that they were socialists and the Bauhaus philosophy is fundamentally a socialist philosophy. The concept of manufacturability, affordable designed objects, the stripping away of all those non-essential decorative elements (being viewed not only as poor design but bourgeois), are all elements of a socialist philosophy. I am not sure I agree with that view but it is something interesting to share. For me, it is a sound business strategy.

What we need today is a movement in business that is equivalent to Bauhaus. How do we take advantage of mass co-creation and social connectivity to create new business models that are designed to be sustainable, simple and empathetic? We’re still applying Alfred Sloan’s concept of what a corporation is since he invented the modern corporation half a century ago. His concept of the modern American corporation was a big innovation with core ideas including: 1/ Firms exist as a monitoring device to control shirking 2/Bigger is better because of the economies of scale.

In the next decade, we will need to reinvent the Modern Corporation and management as we’ve seen today. There are many flaws in the design of the modern corporation. One such flaw is the over emphasis on short-term financial performance. All the great management thinkers—going right back to Peter Drucker—have said this for years. There's nothing wrong with using profit as a measure of your company's economic performance so long as you look at it over 10 or 20 years. But if you shorten that time horizon too much, and CEOs become focused on minute-by-minute fluctuations in the company stock price, profit loses its meaning and self-interest comes to completely dominate collective well being. Peter Senge (MIT) wrote in “Leaders to Leaders” a piece called “The Necessary Revolution” and talked about a regenerative economy. It is another inspiration for us to think about the future of the modern corporations. Here’s a short excerpt:

    Abundance of Opportunities 

There are many reasons for taking the lead in creating a regenerative economy, starting with building a brand and recruiting and retaining talented people. In a world of proliferating choices, brands that stand for quality and responsibility will be distinguished from those that don't. Moreover, the companies behind those brands are where people who have choices will want to work. As Jeroen van der Veer, chief executive of Royal Dutch Shell, points out, "In my view, the successful companies of the future will be those that integrate business and employees' personal values. The best people want to do work that contributes to society with a company whose values they share, where their actions count and their views matter." However, branding and employee recruitment and retention are not the sole reasons for embracing leadership in the regenerative economy.

    Business will be key in our ability to create a regenerative economy.

There is significant money to be saved. Companies in all sectors have saved massive amounts of money simply by reducing their waste and energy usage. By focusing on slashing greenhouse gas emissions along with associated energy use, DuPont was able to save $3 billion while growing by 30 percent over the same 15-year period. By adopting a vehicle-painting technology that applies three coats of paint simultaneously, Ford reduced CO2 emissions from the process by 15 percent and volatile organic compound emissions by 10 percent—while reducing painting time by 20 percent, resulting in significant cost savings. GE Industrial saved $12.8 million a year by changing over to high-efficiency lights in its manufacturing plants. 

____________

First published at Innovation Playground, August 23, 2009. Read more by Idris Mootee here.

(Thank you Idris, for kind permission to repost)

I've been a Bahaus follower for 30 years. I am still fascinated by some of work produced during that period. A Bauhaus Summer School workshop was hosted last month by Michael Zinganel who is a freelance architecture theorist, cultural historian, curator, and artist from Austria. The workshop was designed in a way to bring the Bauhaus sites closer to its local residents through more everyday interaction with special postcards, downtown dialogues, Bauhaus city game, and by projecting super sized figures on the walls of the 1920's Bauhaus building. I think that’s really cool. I wish I could join them for a few outdoor workshops.

Talking about Design School, the Bauhaus was the most influential art, craft and design school of the century. They are definitely more than just design. The Bauhaus teachers were very  influential people including artists such as Paul Klee, Lászl Moholy-Nagy, Wassily Kandinsky, Walter Gropius and Marcel Breuer. I am a big believer of multi-disciplinary thinking and Bauhaus was the first to advocate multi-disciplinary thinking with the goal that students should be able to do work from graphics, products to architecture and every student needed a combined practical and theoretical education (which was revolutionary at that time).

The result was a successful integration of design theory with the industrial process. Bauhaus reacted to social change by creating an aesthetic relevance to the requirements of the time. Bauhaus protagonists wanted to bridge the gap between the social idealism and the commercial reality and to promote a response to the emerging technological culture. The aim was to take advantage of the possibilities of mass production to achieve a style of design that was both functional and aesthetic. Objects were to be designed to have "simplicity, multiplicity, economical use of space, material, time and money which looks as modern as anything in production today. What would a revive Bauhaus movement means within the context to today's social technological advances?

What is interesting and not well known is that Bauhaus was not just a design experiment, it was a political experiment a well. Some suggested that they were socialists and the Bauhaus philosophy is fundamentally a socialist philosophy. The concept of manufacturability, affordable designed objects, the stripping away of all those non-essential decorative elements (being viewed not only as poor design but bourgeois), are all elements of a socialist philosophy. I am not sure I agree with that view but it is something interesting to share. For me, it is a sound business strategy.

What we need today is a movement in business that is equivalent to Bauhaus. How do we take advantage of mass co-creation and social connectivity to create new business models that are designed to be sustainable, simple and empathetic? We’re still applying Alfred Sloan’s concept of what a corporation is since he invented the modern corporation half a century ago. His concept of the modern American corporation was a big innovation with core ideas including: 1/ Firms exist as a monitoring device to control shirking 2/Bigger is better because of the economies of scale.

In the next decade, we will need to reinvent the Modern Corporation and management as we’ve seen today. There are many flaws in the design of the modern corporation. One such flaw is the over emphasis on short-term financial performance. All the great management thinkers—going right back to Peter Drucker—have said this for years. There's nothing wrong with using profit as a measure of your company's economic performance so long as you look at it over 10 or 20 years. But if you shorten that time horizon too much, and CEOs become focused on minute-by-minute fluctuations in the company stock price, profit loses its meaning and self-interest comes to completely dominate collective well being. Peter Senge (MIT) wrote in “Leaders to Leaders” a piece called “The Necessary Revolution” and talked about a regenerative economy. It is another inspiration for us to think about the future of the modern corporations. Here’s a short excerpt:

    Abundance of Opportunities 

There are many reasons for taking the lead in creating a regenerative economy, starting with building a brand and recruiting and retaining talented people. In a world of proliferating choices, brands that stand for quality and responsibility will be distinguished from those that don't. Moreover, the companies behind those brands are where people who have choices will want to work. As Jeroen van der Veer, chief executive of Royal Dutch Shell, points out, "In my view, the successful companies of the future will be those that integrate business and employees' personal values. The best people want to do work that contributes to society with a company whose values they share, where their actions count and their views matter." However, branding and employee recruitment and retention are not the sole reasons for embracing leadership in the regenerative economy.

    Business will be key in our ability to create a regenerative economy.

There is significant money to be saved. Companies in all sectors have saved massive amounts of money simply by reducing their waste and energy usage. By focusing on slashing greenhouse gas emissions along with associated energy use, DuPont was able to save $3 billion while growing by 30 percent over the same 15-year period. By adopting a vehicle-painting technology that applies three coats of paint simultaneously, Ford reduced CO2 emissions from the process by 15 percent and volatile organic compound emissions by 10 percent—while reducing painting time by 20 percent, resulting in significant cost savings. GE Industrial saved $12.8 million a year by changing over to high-efficiency lights in its manufacturing plants. 

____________

First published at Innovation Playground, August 23, 2009. Read more by Idris Mootee here.

(Thank you Idris, for kind permission to repost)

The CMO's Role in a Customer-Centric Organization

The Head Marketer Is Pivotal to Defining and Implementing Programs About People, Not Products

________________________________

by Jay Galbraith

Deciding whether to adopt a customer-centric orientation is a significant decision for organizations, not to be made casually. It results in debates defining customer centricity, often with the question, "How customer-centric do we need to be?" Inevitably, it means organizing around the customer and the further proliferation of the types of marketing needed to do so effectively. The many companies that have embraced a customer-centric orientation have experienced some real and often unexpected challenges. At the center of these challenges is the role of the chief marketing officer -- the person who needs to deliver thought leadership, lead the strategy debate and reorganization, and then integrate the various marketing types into a company-wide, customer-centric orientation.

The need for strong thought leadership begins by defining customer centricity. This task is more difficult than simply establishing a company lexicon. The reason is that many product-centric companies think that they are customer-centric -- and when people like me tell them they're not, they push back. These companies, such as Hewlett-Packard's printer business, have followed all of the experts' advice to be customer-focused. They drive their product-development process with customer insights. They use ergonomic and anthropological studies to guide product design. They test the design on focus groups and user groups. They measure customer satisfaction and so on. But at the end of the day, they are still product-centric. Why? Because they are trying to reach as many customers as possible for their product. Their metric is market share and customer retention.

A customer-centric business tries to find as many products and services as possible for the customer. They create solutions and experiences for their customers. The CMO's role? To be the thought leader who defines customer centricity and determines if the company is product-centric or customer-centric.

'How customer-centric should we be?'
The question then becomes one of, "How customer-centric should we be?" The CMO often leads this effort or is certainly a key player. The strategy group and the sales leaders are often allies in the formulation of the strategy, which can vary from a "light" version to a complete customer-centric version. The more complete the solutions or experiences are, the greater the CMO role.

(...)

Leading segmentation
The CMO role is key in leading the segmentation effort. The CMO needs an accepted segmentation methodology. The creation of solutions based on insights falls to the segment organization at Best Buy. But the CMO needs to build and establish a robust insight-development process throughout the company to drive the development of solutions. Finally, the CMO will need to bring the brand architecture framework to bear. The segments may or may not have their own sub-brands.

The company pursuing the customer-centric orientation inevitably organizes around the customer. The structure follows the strategy. Best Buy, IBM and P&G all have added organizational units dedicated to customers or customer segments. But these new units are not automatically welcomed and integrated into the companies' power structure.

The successful implementation of customer segments creates yet another kind of marketing: the customer-marketing specialist. The marketing community consists of specialists at the corporate center, such as customer insights; product marketing in the business units; regional marketing in the regions and now customer marketing in the segments. The CMO needs to have the leadership skills to manage this company-wide community. The CMO typically runs the marketing councils for the company. Because the marketing function operates in a matrix such as finance, the council is the primary means of integration.

These roles of thought leader, transformation leader and matrix manager are probably the biggest challenges for the contemporary CMO. Like many leadership roles today, there is no one individual who can play all of them simultaneously. Instead, the CMO will need to lead a team to execute customer centricity.

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Jay Galbraith is founder-president of Galbraith Management Consultants, an international consulting firm that specializes in solving strategy and organizational design challenges across corporate, business unit and international levels. He is also the author of three books, the most recent being "Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble and Others Design for Success" (Jossey-Bass, 2008).

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These are only a few excerpts. Read the full article here.

Published in Advertising Age, CMOStrategy on August 24, 2009

6 Essential Skills for Exponential Times

Our world is changing. Beyond the obvious. Beyond the Obama. Beyond the recession and drama in the Middle East. Beyond cars that look like insects and phones that measure contractions and 10 year-olds that that know brands better than college professors.

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By Michelle Tripp

I recently ran across this gem on the tweet circuit. It’s been around for awhile. A little like the mythic chupacabra that disappears for awhile and then mysteriously resurfaces. If you haven’t watched it yet, pretty much stop everything and spend an eye-opening five minutes. (*)

What are we supposed to do?

Thriving in a flat world is all about creating value on an individual basis, and expanding that value as far and wide as possible. In the past, the Renaissance Man was revered. In the Exponential Age, it will be the Exponential Man (or Woman) that has success. The Exponential Human. Someone creating value individually with a broad impact. Someone taking small actions with big results. Think of today’s independent iPhone developer. There’s the potential for exponential value. Because of technology, it no longer requires a corporation to launch great ideas or ubiquitous innovations. The same with journalists and inventors and educators. Silos and vertical structures are out.

All it takes is one human, thinking exponentially.

A life of value in the future will be defined differently and will require a new set of skills. It’s time to start thinking and acting exponentially. Forget the career paths and cafeteria plans and corporate training wheels. A flat world is a different playing field. And we all need to be different players. Here’s a list of the 6 Essential Skills for Exponential Times.

Skill #1: Rule-Breaking

Rules are great. For dictators, production foremen, and lunch ladies. In a flat world, living outside convention will position you for seizing opportunities. Rule breakers will be ready to consider possibilities that others are told “don’t make sense” or “aren’t the way things are done around here.” Rule breakers will separate from the pack and be comfortable without the security of rules and boundaries. They’ll live on the edge, but they’ll be the ones getting recognized, getting the perks, and getting the life they choose. In exponential times, rule breakers will rule.

Skill #2: Entrepreneurial

Seeking out new opportunities and new ways of connecting and creating will be the calling card of the Exponential Human. This doesn’t necessarily mean creating new businesses, but it definitely means carving out personal opportunities. And finding them even when there isn’t an available mentor or an established path. In the Exponential Age, the entrepreneurial thinkers and relentless doers will get the cookies.

Skill #3: Self-Educating

During the 20th century, education was developed for the masses. Pink Floyd nailed it with “Another Brick in the Wall.” Innovation and free-thinking were not encouraged. Because it wasn’t convenient. Thinking outside the box was reserved for someone else. Not you. The reason? For most of the century coming out of World War II, the U.S. was in the midst of an Industrial Age. An industrial-focused nation thrives on production and consumption. And you sitting back doing what you’re told. No meat, no pudding.

But really think about it. According to the Did You Know video, the things that today’s students learns in their freshmen year of college will be obsolete by their third year. This means the next generation must be more proactive than ever in learning independently and not relying on structured programs. In a flat world, the people who will thrive and live personally exponential lives will be the ones who don’t sit back and wait to be taught. They’ll be the ones searching for information and charting their own educational course. They’ll follow the information. And create a curriculum that works for the emerging world. An individualized world. Self-learners will have an incredible advantage during exponential times.

Skill #4: Bonding

It’s not enough to network. It’s not enough to connect. In a flat world, strength and success will come to people and companies who bond with the people around them. Those bonds can be through adding value to people’s lives through technology, information, guidance, validation, or friendship. Social media is just the infant phase of what will come. Once everyone racks up 20,000 Facebook friends and a half million Twitter followers, there’ll be a backlash. Connections won’t have value, but bonding with them will. Think of it as a spider web. Do you want yours made out of silly string or super glue?

Watch over time as those with less influence and less interest in bonding grow their numbers, while the authentic exponential thinkers decrease their numbers. When anyone can have thousands of followers, a lower number of connections will become the new status symbol. In exponential times, expanding your reach widely does have value, but not if it’s half an inch deep. Bonding will be a matter of how much value you can provide to the people you’ve promised it to. And the exponential part comes when those you’ve bonded with spread your product, your message, your value. For companies, bonding will be key to branding. Which is why when social media is done right, it packs such a punch.

Skill #5: Revolutionary

I love Intel’s Rock Star campaign.It really speaks to the idea of revolutionaries having personal power. The revolutionaries in exponential times will be the ones inventing and creating. Brains that thrive on change, innovation and invention, high information uptake, and leveraging technologies are geared for the future. Revolutionaries are at the forefront, creating the future. It might be in seemingly small ways like transforming the structure of a microchip or creating a Facebook or iPhone app. But the exponential thinker realizes that small ideas can create big revolutions.

Skill #6: Visionary

In exponential times, the most important thing to remember is that everything is changing faster than ever. And from even minor changes come a butterfly effect. Having visionary skills allows you to imagine what’s possible, imagine what’s next, and predict the needs and values of tomorrow. Looking in all directions from the center of the pond. So you can be developing ideas and solutions, and preparing to meet future needs today. Because there will be a new need tomorrow. And visionary thinkers will be ready for that, too.

The best way to predict the future is to create it. In exponential times it’s even more important to be ahead of the curve if you want to have control of your life, your ideas, and your potential. When the future happened yesterday, having essential skills puts you in the middle of where the action will be tomorrow. And positions you for living, and thriving, in exponential times.

Can you think of additional skills for becoming an Exponential Human in the Exponential Age? 

(*) This video was originally designed in 2006 as a Powerpoint for a faculty presentation at Arapahoe High School in Centennial, Colorado to emphasize the importance of education. In its various versions it’s now been seen by at least 15 million people. The video is credited to Karl Fisch, Scott McLeod, and Jeff Brenman.

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This is only an excerpt. Read full post here.

Published on BrandForward, August 12th, 2009

Disney wants to learn which ads work

Lab Watches Web Surfers to See Which Ads Work

“Everybody is trying to figure out the ad models of the future, but nobody is doing it on this scale”

“Everybody is still shooting in the dark - We’re trying to turn on the lights.”

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By Brooks Barnes

Like other television companies, Disney Media Networks — which includes ABC, ESPN, ABC Family and Disney XD — has long conducted intense consumer research about its programming. But now, as the Web and DVRs uproot the way people consume television, and thus rip apart the industry’s business model, the unit is adding advertiser research as a fresh focus of intense inquiry.

It is relatively easy for Internet companies and their advertisers to measure precisely how often Web site visitors click on advertisements, and which kinds of ads draw the most clicks. But what about those who do not click, the many millions of others whose eyes merely flit across the screen? Disney and other companies say they believe that not nearly enough is known about them — what kinds of ads in which configurations are likeliest to draw them, and hold them?

A good deal is at stake. Although the recession has slowed its growth, nearly $25 billion will be spent on Web advertising this year, eMarketer, an Internet research company, estimates — a mother lode that will grow to more than $37 billion by 2013.

The goal, quite simply, is to increase ad revenue by offering skittish clients serious research about what works and what does not in new media, said Peter Seymour, the unit’s executive vice president for strategy and research. There is also a focus on new forms of advertising in programming shown on actual televisions.

Are ads that play before video clips, known as prerolls, more effective when paired with banner ads? Do animated ads keep viewers’ attention on mobile devices better than live-action ones? How well do so-called watermark ads — an image that sits on part of a Web page like etched glass — affect buyer intent?

The tools are advanced: in addition to tracking eye movement, Dr. Varan and his 14-member team use heart-rate monitors, skin temperature readings and facial expressions (probes are attached to facial muscles) to reach conclusions.

“Completely invaluable” is how Tracey Scheppach, video innovations director for Starcom MediaVest Group, describes Disney’s work. “Everybody is trying to figure out the ad models of the future, but nobody is doing it on this scale,” she said.

Other companies are also pursuing this type of research. The rise of new media platforms paired with the ubiquity of DVRs has made it a business imperative for television companies, especially since advertisers now pay rates based on how many people watch the commercials. (For decades, largely because the technology could not measure audiences so finely, advertisers paid rates based on how many people watched programs.)

The (Disney) facility, which operates seven days a week from 9 a.m. to 9 p.m., has eight research rooms decorated as living rooms or home offices, with hardwood floors, soft lighting and comfortable furniture. There is also a theater that allows a dozen people to participate in a simultaneous experiment. Disney’s investment is estimated to be in the low seven figures.

The rooms are built around a central command post, where researchers scrutinize participants via video monitor — one room has 20 cameras — and through one-way mirrors.

Dr. Varan cautioned that more research was needed before the media industry caught up with the evolving way people consume its product. He equates Web advertising to the early days of television advertising, noting that networks just relied on the radio model they knew.

“Everybody is still shooting in the dark,” he said. “We’re trying to turn on the lights.”

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These are only a few excerpts. Read full article here.
Published in New York Times online edition on July 26, 2009

Parkinson's Law (1955 - still fresh as a daisy)

Parkinson's Law is a purely scientific discovery, inapplicable except in theory to the politics of the day. It is not the business of the botanist to eradicate the weeds. Enough for him if he can tell us just how fast they grow.

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From The Economist print edition

(...)
Omitting technicalities (which are numerous) we may distinguish, at the outset, two motive forces. They can be represented for the present purpose by two almost axiomatic statements, thus:

Factor I.—An official wants to multiply subordinates, not rivals; and

Factor II.—Officials make work for each other.

We must now examine these motive forces in turn.

The Law of Multiplication of Subordinates

To comprehend Factor I, we must picture a civil servant called A who finds himself overworked. Whether this overwork is real or imaginary is immaterial; but we should observe, in passing, that A's sensation (or illusion) might easily result from his own decreasing energy—a normal symptom of middle-age. For this real or imagined overwork there are, broadly speaking, three possible remedies

(1) He may resign.

(2) He may ask to halve the work with a colleague called B.

(3) He may demand the assistance of two subordinates, to be called C and D.

There is probably no instance in civil service history of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W's vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence; and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both.

It is essential to realise, at this point, that C and D are, as it were, inseparable. To appoint C alone would have been impossible. Why? Because C, if by himself, would divide the work with A and so assume almost the equal status which has been refused in the first instance to B; a status the more emphasised if C is A's only possible successor. Subordinates must thus number two or more, each being kept in order by fear of the other's promotion. When C complains in turn of being overworked (as he certainly will) A will, with the concurrence of C, advise the appointment of two assistants to help C. But he can then avert internal friction only by advising the appointment of two more assistants to help D, whose position is much the same. With this recruitment of E, F, G and H, the promotion of A is now practically certain.

The Law of Multiplication of Work

Seven officials are now doing what one did before. This is where Factor II comes into operation. For these seven make so much work for each other that all are fully occupied and A is actually working harder than ever. An incoming document may well come before each of them in turn. Official E decides that it falls within the province of F, who places a draft reply before C, who amends it drastically before consulting D, who asks G to deal with it. But G goes on leave at this point, handing the file over to H, who drafts a minute, which is signed by D and returned to C, who revises his draft accordingly and lays the new version before A.

What does A do? He would have every excuse for signing the thing unread, for he has many other matters on his mind. Knowing now that he is to succeed W next year, he has to decide whether C or D should succeed to his own office. He had to agree to G going on leave, although not yet strictly entitled to it. He is worried whether H should not have gone instead, for reasons of health. He has looked pale recently—partly but not solely because of his domestic troubles. Then there is the business of F's special increment of salary for the period of the conference, and E's application for transfer to the Ministry of Pensions. A has heard that D is in love with a married typist and that G and F are no longer on speaking terms—no one seems to know why. So A might be tempted to sign C's draft and have done with it.

But A is a conscientious man. Beset as he is with problems created by his colleagues for themselves and for him—created by the mere fact of these officials' existence—he is not the man to shirk his duty. He reads through the draft with care, deletes the fussy paragraphs added by C and H and restores the thing back to the form preferred in the first instance by the able (if quarrelsome) F. He corrects the English—none of these young men can write grammatically—and finally produces the same reply he would have written if officials C to H had never been born. Far more people have taken far longer to produce the same result. No one has been idle. All have done their best. And it is late in the evening before A finally quits his office and begins the return journey to Ealing. The last of the office lights are being turned off in the gathering dusk which marks the end of another day's administrative toil. Among the last to leave, A reflects, with bowed shoulders and a wry smile, that late hours, like grey hairs, are among the penalties of success.

(...)

Vast masses of statistical evidence have been collected and it is from a study of this data that Parkinson's Law has been deduced.

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This is only an excerpt. Read full article here.

Published in Economist.com July 29th, 2009 - originally printed in The Economist Nov. 19th, 1955

Ten reasons you should care about the shopper

Retailers are battling for shoppers and seek manufacturer partners who bring insights about how people shop that translate into ideas that increase traffic, category and aisle sales.  Manufacturers must master shopper insights or they will not be chosen as “category captain”.

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By Joel Rubinson

For consumer insights teams, shopper insights research feels foreign; it requires a different set of approaches and a totally different mindset.  Shopping is about action more than preferences.  It’s about the shopping trip rather than a single product category. Yet, shopper insights are critical for making shopper marketing work for your brand, enhancing your relationships with retail customers, and if you’re an agency, having a complete offer.

Here is my list of 10 reasons you should care about the shopper.  Please add your own reasons to the list.

1:  50% or more of product and brand decisions are made in-store; numerous shopper insights studies agree (e.g. POPAI, Ogilvy Action). When shopping for a new car or consumer electronics, people consider multiple brands. Why isn’t brand equity enough? Why are people still deciding in-store?  What is influencing them? You need to learn how to win more than your fair share of purchases that are up for grabs.

2: Shopper marketing offers immediacy and reach and is projected to be the fastest growing part of the media mix over the next few years.  Wal-Mart offers a bigger audience than any prime time show. Target is up there too. In the era of fragmented media audiences, delivering a huge audience, right at the “first moment of truth” should not be ignored.

3: What people care about as shoppers is different.  As shoppers, people are in action mode.  They are making many decisions during the course of a shopping trip, filling their cart with diverse products, taking only seconds per decision.  When people are shopping they are motivated by different messages than they are as consumers (more price-related and solution-based).  Shoppers want a highly shoppable environment which is tricky because 99% of the products in the store are irrelevant to the shopper’s mission on a given trip.

4: Shopper marketing gives you unique opportunities to be relevant. Retailers have different store formats that are geared to serve their local clientele. Some formats match the local ethnic concentration. How will your brand presentation be customized in each store format?

5: Product marketers are getting into retail. Apple, Coach, Estee Lauder have all been successful.  Procter just bought specialty retailer chains and a number of marketers have been using pop-up stores. If you do not study shoppers, you will not see this opportunity.

6: Shopper insights are currency for building strong customer relationships.  Retailers are battling for shoppers and seek manufacturer partners who bring insights about how people shop that translate into ideas that increase traffic, category and aisle sales.  Manufacturers must master shopper insights or they will not be chosen as “category captain”.  That means that a competitor of yours will work directly with the merchant to determine your place on the shelf…if any.

7: Advertising agencies must master shopper marketing to have a complete offering: those who do not offer shopper marketing services will be viewed as incomplete in their messaging and media planning approaches.

8: Shopper insights and consumer insights are different things. Consumer insights study the relationship and expectations a person has regarding brand alternatives.  Shopper insights study how people put preferences into action in the context of replenishment needs, search for solutions, promotional offers, and the retail environment.  The research tools, questionnaires, and mental models are all different.

9:  Studying the path to purchase offers a new approach to media planning.  Some product categories are characterized by brands being decided on before entering the store (e.g. cigarettes, soft drinks, iPhones).  For them, shopper marketing is less important and off-premise is more important.  Other brands are chosen in-store mostly (store brands, lower priced alternatives, impulse items) and shopper marketing is a must.

10: The recession is leading to big changes that are SHOPPER-centered. For example, how people plan their shopping trips, their increasing purchase of store brands, retailers de-SKUing all reflect economic pressures.

If you’re still not sure how important shopper insights are, consider what was just reported in Ad Age:  “Walmart has launched an aggressive push to have marketers divert their consumer media and marketing budgets into the giant retailer’s growing ad budget and in-store marketing programs, using a simultaneous push to clear underperforming brands off its shelves as extra leverage.”

Shopper marketing is real and the need for shopper insights is acute.

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Originally posted in Joel Robinson's blog, July 21th. 2009. Read here.

Joel Rubinson is Chief Research Officer at The ARF (Advertising Research Foundation), where he directs the organization’s research priorities and initiatives on behalf of more than 400 advertisers, advertising agencies, associations, research firms, and media companies.