Wednesday, April 16, 2008

One More Time, Don't Confuse Marketing with Branding

Some of the comments I got from readers of last week’s blog ( ranged from “Great stuff, love the P/E idea” to “Hey idiot, what’s your beef against marketing, anyway?” Naturally, I commend the brilliant readers who posted a variation of the first sentiment, but I concede that I might have to be a little clearer to address the concern represented by the second sentiment. Let me repeat my original point: Great branding is a consequence of the reliability, consistency and authenticity of the great, unique stuff (products, services) that the organization provides the marketplace. All the conditions (consistency, authenticity, uniqueness, etc.) have to be present. If they are, the customer is likely to have an exceptional experience, a predictably exceptional experience, that is, an exceptional experience he or she can count on. Once again, if all these conditions exist, then innovative marketing can definitely help build both brand equity and sales volume. If they are not all present, the impact of marketing is often questionable and iffy. Sometimes positive, sometimes irrelevant, sometimes ambiguous. For example, prior to being bought out by Disney in 2006, Pixar’s profit metrics and market buzz were monumentally bigger than those of the much larger animation unit of giant Disney. When Pixar was independent, millions of people were devoted to the company’s films because they could count on having a uniquely delightful movie experience every two to three years, an experience with cutting edge 3D computer technology and a great, original story line with new characters that spawned separate but equal joy appeal for kids and adults. With that underlying reputation of carefully crafted unique value, it’s no surprise that a strong marketing campaign created by Pixar for each upcoming film made a lot of sense, and had a lot of impact. But--had Pixar posted an uneven track record, with occasional good films mixed in with a lot of mediocre ones and a periodic stinker, its marketing campaigns would have generated as much noise as impact. For Toyota, marketing also makes a lot of sense. Millions of people are wedded to buying Toyotas because they can count on having a uniquely positive experience regarding quality, design, innovative technology, fair price, comfort, “feel” and after-sale service. For Toyota, marketing specific exceptional products like the Prius or Tundra spreads the good news about the already-inherent strength of the Toyota brand in addition to the unique feature of the individual products. In contrast, consider Toyota’s Big 3 competitors. Their mega-marketing campaigns—from multiple ads in magazines to intricate product placements in films to sleazy faux Super Bowls with scantily clad models on TV -- sure haven’t helped much, have they? In fact, until last year when Toyota finally entered the world of NASCAR, all of the wildly popular motor sport’s cars were built by GM, Ford or Chrysler. How did that work out for their sales, profitability, and stock value? See what I mean? A few years ago, Goodyear’s $60 million annual ad budget generated some very charming commercials, like the one in which parents in different parts of the world were shown enduring their kids’ whines in native languages of the universal “Are we there yet?” Nice stuff, but the problem was that Goodyear lagged behind competitors like Michelin and Bridgestone in several quality and innovation assessments. Unsurprisingly, while people enjoyed the commercials, they didn’t desert Michelin for Goodyear. The Wall St. Journal reported one Goodyear dealer saying “I didn’t have people coming in and saying, ‘I saw that cute commercial—let me see some of them tires’.” My point is simple: Don’t equate branding with marketing. Equate branding with the consistency, reliability and integrity of the extraordinary things you will do on behalf of your customers. If you have that foundation, a little imaginative marketing will help build the brand. Otherwise--??????One last point. I’m cynical about Disney’s upcoming “Pixar” movie: Toy Story 3. Disney has a track record of bleeding its successful products to death via overexposure in order to max out revenue (remember the three times per week “Who Wants to Be a Millionaire?” on Disney/ABC?) If Disney starts doing Toy Story 4 and 5, or Incredibles 2 and 3, you’ll know that Pixar’s soul is being strangled. And then, the brand will fizzle, and all of Disney’s mega-marketing will be for naught.


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