2009 September | brandSTOKE

Archive for September, 2009

Sep

CFOs vs. CMOs: where’s the ROI?

By Kirk 4 Comments

Categories: budgeting and roi

istock_000008321652xsmall Suppose that in 2008 you invested in a barrel of crude oil.

And why wouldn’t you? Every year from 2002 to 2008 the annual average price per barrel has gone up, from $23 to $91. As an investment, it’s a no-brainer.

Unfortunately, today your investment is worth $66 (date of post), down 27%. Obviously, a poor ROI.

What caused the drop? Supply and demand. OPEC. War in the Middle East. Hurricane Katrina. The recession. Staycations. In other words, variables outside of your control.

Investments in marketing are no different. Consider the retailer who places advertising to promote a weekend sale. He is at the mercy of an infinite number of variables, such as competitive sales, football games, and Mother Nature.

Marketing budgets are no more risky than financial investments, which is to say CFOs are right to question them. The accountability of marketing for producing measurable results has always been a sensitive topic.

Many CFOs attempt to hold marketing to the highest of ROI standards. Some perceive it as a soft cost, one that is inept at proving its own value. They view excuses, such as “Sales were hurt by the blizzard,” as, well, excuses.

CMOs, on the other hand, accept that by definition, the marketplace is chaotic. Question their strategies, however, and you hit raw nerve. Deep in their hearts, marketers are troubled by their own inability to guarantee results.

Both sides agree: Marketing is an inexact science. CFOs use this knowledge as a bludgeon. They expect every campaign to be “Where’s the beef?” CMOs avoid the conversation, knowing that you don’t hit a gusher without a lot of dry wells and expense.

Ideally, marketing investments should be reviewed like financial ones. Managers should consider customer trends, competitive activity, market influences, pricing strategies, and the organization’s ability to deliver, as well as recommended marketing messages and channels.

Smart investors are not gamblers. Instead, they make informed decisions, based on calculations of risk and opportunity.

Do your CMO and CFO work together to make wise marketing investments?

Sep

Brand anarchy: why we need cops

By Kirk 1 Comment

Categories: identity and standards

istock_000008364248small Take any group of people. Give them a goal in which they have a vested interest, throw some obstacles their way, and apply pressure. What happens?

One common outcome of a shared experience is that the group members will bond. They will say things like, “Our team busted our butts putting the annual budget together in four days. Nobody slept. It was a hell of an accomplishment.”

And they will identify with each other. They will give each other knowing looks in meetings and tell inside jokes. They will develop their own mythology. And something else: they will brand themselves.

Apparently it’s human nature. One would think a football team, for example, would have one identity only. But within a team, the defensive players share a special bond, as do the offensive players. And within the defense, the linebackers hang together, as do the defensive backs. The seniors on the team are bonded as a class, as are the first-year players.

Nearly every organization has teams within the team, divisions, departments, outlying offices, and committees. And many of these units will brand themselves with their own symbols, slogans, and special versions of the organization’s logo. Sometimes, unfortunately, these identifiers face the customers.

While this may be good for the morale of the individual unit, it is often confusing to the customers who are witnessing a multiple-personality disorder.

Enter the brand police with sirens blaring.

The purpose of brand standards and message platforms is to present the organization in a unified and distinctive manner to all audiences. Standards improve clarity, effectiveness and memorability. When applied consistently, they benefit all of the groups within the larger group and strengthen the brand in the marketplace.

Yet in many organizations the brand cops are held in contempt. No one likes to be told to take off their colors.

How are the standards police regarded in your organization?

Sep

The 4 mutable laws of branding

By Kirk Closed

Categories: book reviews

BrandSTOKE Book Review: ♦♦

In Pirates of the Caribbean: The Curse of the Black Pearl, Captain Barbossa informs Elizabeth that the Pirates’ Code is “more what you’d call ‘guidelines’ than actual rules.” And so it is with The 22 Immutable Laws of Branding.

A better title might have been The 4 Occasionally Mutable Laws of Branding and Several Rather Obvious Observations.

Six of the laws (Expansion, Contraction, the Name, Extensions, Consistency, and Singularity) address essentially the same theory: extending a brand weakens it, and conversely, focusing a brand strengthens it.

Except that two of the laws (Siblings and Change) say it’s okay to line-extend under certain circumstances. Which makes the forgoing six laws not exactly “immutable.”

Seven of the laws (Word, Credentials, the Name, the Generic, the Company, Shape, and Color) discuss the role of various brand properties in claiming ownership of a niche.

Rather obviously, the laws of Publicity and Advertising observe the importance of those tools in building brand awareness. Really?

Yet a couple of the laws (Quality and Category) are more substantive, including advice such as “A leading brand should promote the category, not the brand.” And given the constant drumming of “Best Quality! Lowest Prices!,” I appreciated the observation that quality is not a believable differentiator for a brand unless one charges extra for it.

Numbering the laws and claiming they are immutable was likely a promotional device. Overall, however, the “guidelines” are insightful, even if generally accepted. Every chapter brims with examples, many of which are still valid ten years later.

Al Ries, along with Jack Trout, advanced the concept of brand “positioning” and many of their basic theories are repeated here. Still, The 22 Immutable Laws of Branding, written with his daughter Laura Ries, remains a very accessible read on the basics of brand building.

Disclaimer: This title links to the Amazon Associates Program.

Sep

Angus wars?

By Kirk 1 Comment

Categories: advertising, brand essence, loyalty, promotion, retail and strategy

Clara Peller once asked, “Where’s the beef?” Today, the question is, “What’s the beef?”

The American Angus Association hopes your answer is “Angus.”

It used to be simpler. When some of the other commodity meats, chicken, pork and fish, tried to position beef as unhealthy and fattening, beef held its ground. The National Cattlemen’s Beef Association memorably reminded us, “Beef. It’s what’s for dinner.”

Now, when buying beef, plain old USDA prime, choice and select grades just aren’t specific enough anymore.

Beef is no longer a commodity.

Branding efforts are underway to convince you that Angus is the preferred breed of beef. Not Kobe. Not mixed breeds. And not just Angus, but Certified Angus.

Originally from Scotland, Angus cattle are, according to the American Angus Association, the most popular breed in the United States.

Evolving a commodity into a brand is always a challenging and intriguing initiative, given that the brand’s essence, a meaningful differentiator, must be successfully identified, defined, and eventually perceived by the consumer. (See 9 criteria for brand essence.)

Perdue Farms did it for chickens in the 1970s, with TV spots featuring its CEO, Frank Perdue, as spokesperson. The tag line: “It takes a tough man to make a tender chicken.”

The American Angus Association launched the Certified Angus Beef brand in 1978. To qualify, cattle must be at least 51% Black Angus and meet several criteria, including having a “modest or higher degree of marbling.”

More recently, Angus beef has bulled its way into fast food menus. In 2004, Burger King introduced the first Angus burger, which has since been discontinued.

Hardee’s and Carl’s Jr. both feature Angus burgers, including Hardee’s Angus ThickBurger ($3.49), and Carl’s Jr.’s Six-Dollar Angus Burger ($3.99). Recently, McDonald’s has beefed up its own menu with the Angus Third Pounder ($3.99).

The Angus Wars have officially been declared. Hardee’s and Carl’s Jr. are fighting with more advertising, promotions and taste challenges. They’re also fighting with more Angus.

“After they (McDonald’s) so blatantly copied our burgers, we felt it was fair play,” Andrew Puzder, chief executive of CKE Restaurants, the parent of both Hardee’s and Carl’s Jr., said regarding the roll-out of the Big Carl. The Big Carl is positioned directly against the Big Mac and is fifty cents cheaper.

To further complicate matters, beef eaters may also choose Kobe beef (from Japan), American Kobe beef (from Angus and Japanese Wagyu crossbreeds), or Australian Kobe beef. (The Japanese have taken issue with this labeling because the American and Australian versions of Kobe beef are not authentic.)

What’s your brand of beef?

P.S. Since posting, an update on the “war” has been provided by Adweek.