Archive for the ‘differentiation’ category

Great Lake, Greater Pizza, Greatest Marketing

September 7th, 2009

I just read a fascinating article in the Chicago Tribune about a tiny restaurant called Great Lake, which GQ magazine recently proclaimed to be the makers of the finest pizza in America. Great Lake breaks virtually every rule of marketing: they make customers wait hours for their pizza and show little sympathy for complaints; they have no interest in expanding capacity despite a clear opportunity to dramatically increase their revenues as well as customer satisfaction; and they do zero advertising or promotion because–heaven forbid!–that would attract more customers. Their goal is simply to make the world’s most perfect pizza, and–if GQ and the Tribune are to be believed–they are succeeding.

On the surface, Great Lake looks like the Great Anti-Marketer. Ironically, however, while Great Lake appears to lack a marketing strategy, the fact is that their obsession with creating the perfect product has effectively become their marketing strategy–and a powerful one at that. Great Lake’s off-the-charts product is generating the most cost-effective marketing a business can have: over-the-top media reviews and extremely positive word-of-mouth support. (Case in point: the Tribune article actually has me making plans to visit Great Lake knowing I’ll have to wait in line for 3 hours, which is something the greatest pizza ad ever created could never persuade me to do.)

So, does this mean you should ignore marketing and simply let your quality do the talking? Only if you have a product that is truly rave-worthy and unlike anything your target customers have ever before experienced. Put another way, if your customers are willing to wait in line for 3-hours for your product and then tell others about how great it is, you may not need to market. If this isn’t the case for you, however–and I suspect it isn’t for 99.9% of all businesses–then an effective marketing strategy needs to be a critical priority.

The only product that comes to mind that was able to generate so much “free” buzz that it didn’t need to advertise was the iPhone during its initial launch. See if you can think of any others.

Perhaps it will give you something to do while you’re waiting in line at Great Lake.

Give CA CEO a C in Advertising

August 11th, 2009

One of my rules over the years has been to avoid companies whose CEO makes himself or herself the focus of the company’s advertising. CA, a leading IT services firm, recently began running an ad showcasing its CEO, John Swainson. It will be interesting to see if CA will be the latest embodiment of this rule, or if it will somehow manage to be the rare exception.

From everything I’ve read, CA appears to be a successful, well-run company. They’re the biggest independent IT management software company in the world, and they’re growing both sales and earnings despite a rough economy. But while they may know a lot about IT, they don’t appear to know much about effective marketing communications–at least not yet.

I’ve always felt that CEOs should be the focus of your advertising only if they bring badly-needed credibility to the brand–as Lee Iococca famously did for Chrysler in the 1980s–or if they possess exceptional charisma that can uniquely and effectively position the brand. Since Mr. Swainson is largely unknown and far from charismatic, it’s hard to see why someone thought it would be a good idea to make him the star of this ad.

The ostensible point of the ad is to educate viewers about what CA does. Having seen the ad several times, however, all I’ve learned is that CA makes really boring ads. And while Mr. Swainson may well be a highly capable CEO, he is not a particularly charming or telegenic spokesman. If anything, his drab business suit, dated hairstyle (too long on the sides) and monotonous, unsmiling delivery all conspire to fight the high-energy, state-of-the-art feeling the company was no doubt hoping to create.

Sometimes a starring advertising role for the CEO reflects an out-of-control ego that is dangerously manifesting itself in other parts of the company as well. I have no reason to believe that this is the case at CA. In fact, it may well be that Mr. Swainson and his marketing people are smart–and honest–enough to eventually realize that this ad is not doing the trick and that it’s time to go back to the marketing communications drawing board.

If that’s the case, I can’t wait to see their new ad and finally learn exactly what it is that CA does.

Starbucks Bucks Mac Attack

August 5th, 2009

In announcing Starbucks’ recent quarterly financial results, CEO Howard Schultz announced that the company’s coffee sales have actually been helped by the efforts of McDonald’s to eat into its market share. It turns out McDonald’s actually got more people thinking about coffee, and that many of them decided to get theirs at Starbucks rather than McDonald’s.

This anecdote reinforces two long-established and still-relevant tenets of marketing strategy. First, if you suddenly face a new competitor or an existing competitor that decides to up its aggressiveness, it’s often a good thing. The stepped-up competition will raise awareness of your category, and if you’re good at what you do, you should benefit from the increased exposure. There’s no need to panic, and certainly no need to do something rash like slashing prices to defend your turf.

Second, if you decide to enter a new category or ramp up your aggressiveness in an existing category, don’t do it by attacking the market leader. Not only are you likely to help them by by virtue of the attention you generate for them, you’ll come across as a poor knock-off at best or a cheap-shot, low-blow artist at worst. Instead of making your story what’s wrong with the market leader, make it what’s right with you.

As the late rocker (and marketing maven) Jerry Garcia once advised, don’t try to make people think you’re the best at what you do; make them think you’re the only one who does what you do!

Ally Needs to Ally with a Better Advertising Strategy

August 3rd, 2009

Have you seen the series of TV commercials in which an adult uses “fine print” to tease a child? In one, one girl is given a toy pony and then watches as a playmate is given a real pony; in another, a boy is allowed to play with a cool toy airplane for a few seconds, only to have it abruptly taken away and replaced by a sorry cardboard cut-out. These acts of meanness are supposed to be metaphors for how financial services companies use “fine print” to abuse their consumers. Clever, huh?

If you have seen these spots, do you remember who the advertiser is?  I highly doubt it.  The answer is Ally, which on its website bills itself as “a new bank built on the foundation of GMAC Financial Services.”  When I read this, I had a true LOL moment, having used this blog on numerous occasions to criticize General Motors for its automobile and truck advertising. The Ally campaign certainly rivals GM’s vehicle advertising for incompetence.  First, it commits advertising’s cardinal sin by failing to register the brand name–an especially flagrant foul given that this is a new company that badly needs to establish consumer awareness. Second, the story line of the commercials has virtually nothing to do with financial services; the viewer comes away with little or no understanding of what benefit is being promised. Third, the teasing of these children is downright mean; although this meanness is ostensibly meant to represent the way Ally’s competitors treat their customers, it seems more likely that Ally will be the brand associated with the meanness. It almost makes you wish for at disclaimer saying, “No child’s emotions were irreparably harmed during the filming of this commercial.”

In short, these commercials don’t effectively convey either the benefit being advertised or the brand doing the advertising, and those few viewers who are somehow able to identify the brand will likely associate it with meanness.

For a company claiming to know that consumers don’t read the fine print, you’d think that Ally would have the good sense to put its benefits–and its name–in the headline, rather than to associate itself with the teasing of innocent children. What consumers would want to ally with a company like that?

Sony: Like Every Other

April 17th, 2009

A headline in yesterday’s Wall Street Journal read, “At Sony, Culture Shift Yields a Low-Cost Video Camera.” In essence, Sony has decided to launch a low-cost camcorder to compete with the Flip camcorder, which was launched three years ago. Sony’s product, called the Webbie, not only has no meaningful competitive advantage over the Flip, it has two major disadvantages: it’s available in only 3 colors, versus hundreds for the Flip, and it cannot be personalized with the customer’s own images.

This announcement is yet further confirmation of just how far Sony has fallen from the days when it was considered not only the most innovative electronics company in the world, but a brand that warranted a significant price premium. Back then, the tagline “Sony. The one and only.” was both memorable and truthful. Unfortunately for Sony fans–and investors–the company decided about 20 years ago to get into the movie business. As so often happens with dramatic diversification moves like this, the company soon lost focus, and its vaunted innovation soon disappeared. Think about it: what’s the last big idea Sony brought to the market? The Walkman? (Speaking of which, when’s the last time you used a Walkman, let alone bought one?)

Around the time it was losing its capability for innovation, Sony also lost its penchant for marketing, opting to replace the catchy and ownable “Sony. The one and only.” with the utterly forgettable “Sony. Like no other.” Sadly, Sony now seems content to act like every other consumer electronics company by simply knocking off the market leader and competing on price. What’s worse, it clearly hasn’t even mastered the art of knock-offs, as its new entry is an inferior product…and a few years late. That’s not great news for Sony customers, and it’s worse news for Sony investors.