Consumer

How Branding Is Helping GM Survive Recall Disaster

The news about GM this year has been grim. We’re not even through 2014, and so far GM has had more than 60 recalls. The total cost will likely top $1 billion and involve more than 26 million vehicles.

And yet, GM just paid its shareholders a quarterly dividend in September. Despite everything, GM’s stock valuation is holding relatively steady.

How can a company that has been in the news all year for extremely negative reasons, continue to be valued on the stock market? Partly it’s a matter of brand management.

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CVS Quits Smoking, Scores Rebrand Win

CVS Quits Smoking, Scores Rebrand WinMy mom quit smoking recently, after fifty years of it. The fact that CVS is no longer selling cigarettes had nothing to do with this, of course. But the company’s decision to go smoke-free, now—a month ahead of schedule—had particular resonance with me.

Opponents of this move argue that it’s hypocritical, a stunt. They have a point—but in that case it’s a pretty expensive stunt (more than $1 billion in lost annual revenue). This is a clear example of a brand-driven business decision. In addition to pulling tobacco, CVS has changed its name from CVS Caremark to CVS Health, indicating a commitment to something bigger than themselves.

So how much financial loss is CVS willing to sacrifice for a bold brand promise? Does that mean they’re pulling Frito’s and M&M’s off the shelves? (I hope not.) The store will still carry plenty of products that contribute to major health problems, so can it really be the flagship of health it’s aspiring to?

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The ‘Best’ Designed Beer Can Is the One That Sells the Most Beer

Best Designed Beer Can Is the One That Sells the Most BeerI recently read an article in Adweek called “What Are the Best Looking Beer Cans in America.” Apparently we are in a Golden Age of beer can design. And some of them are pretty fun (see a gallery here). But I believe that while these designs are creatively interesting, they divert from a beer can’s real job, which (aside from its function as a container) is to get beer drinkers to buy the beer.

Design should have an objective. Design is purpose-driven and client-driven, and these qualities are what differentiates it from art. Good design can certainly enhance our lives and create an aesthetic response in its beholders. But I believe the best design is the one that sells the most product and builds the biggest market.

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Relevance: A Brand’s Fountain of Youth

Relevance: A Brand’s Fountain of YouthRecently I read an article in the San Francisco Chronicle by Leah Garchik. She recapped a story that involved a pilot, who, while navigating a flight to the East Coast, suggested over the intercom that passengers look out the window for a scenic “Kodak moment.” As Garchick reported, one flight attendant then asked, “What’s Kodak?”

Once a ubiquitous tagline, “A Kodak Moment” made its way into casual speech to describe a moment worth remembering, but awareness of Kodak’s popular tagline, as well as its brand relevance today, has almost completely evaporated.

This is a huge lesson. Success can be fleeting, even for the most iconic brands; The question is, how can you prevent that from happening?

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High-Risk Naming: Can Google Trademark “Glass”?

High-Risk Naming: Can Google Trademark “Glass”?Google, which we’ve held up as an example of both good and bad when it comes to branding, recently applied for a trademark for the word “Glass.” Not Google Glass, just Glass. Not surprisingly, the U.S. Patent and Trademark Office is not going to give in so quickly. Everyday terms, such as glass, are usually not ownable by any one company, especially when they are descriptive of the product or service itself.

Trademarking Generic Terms
Generic terms are typically difficult to trademark, and for good reason. They are undifferentiating and cause confusion in the marketplace. The reason Apple was able to trademark an everyday word was that a word for a fruit does not in any way describe computing hardware. Glass, however, describes the appearance, apparent composition and function of the Google product. (Although, as this Mashable article attests, the product is not actually made of glass)

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Did the Olympics Help Russia’s Brand?

Did the Olympics Help Russia's Brand?

Philip is an Olympian who represented the U.S. in rowing.

By most accounts, the 2014 Sochi Olympics were very well run and thoroughly enjoyed by athletes and spectators with a minimum of protests or distractions. A recent poll conducted by the Guardian asked “Were the 2014 Winter Olympics a success for Russia?” According to 77 percent of respondents, the answer was “Yes.” And with the games coming in at a reported cost of $50 billion, Russia certainly spared no expense.

However, I’m not sure Russia got the beneficial image impact such an effort should have yielded. That’s because Russia was sending out two powerful and opposite messages. Never a good strategy.

Unrest Detracts from Impressive Games
The Olympics surely helped us admire Russia and Russians. The sheer scale of the undertaking in Sochi was impressive. And the Olympics are always a chance for the host country to show off its best qualities.

But even as the Games were being played, images of chaos and discontent in Russia’s sphere of influence undercut the general goodwill. The continuous shipment of armaments and ammunition to the Syrian government for use against its citizens continues to hurt Russia (at least in the West and among supporters of human rights). So does support for the authoritarian regime and strong-arm tactics of recently ousted Ukrainian leader Viktor Yanukovych.

Less than a week after the Winter Olympics closing ceremony, Russia is conducting military maneuvers on the Ukrainian border and the cover of The Economist shows a figure silhouetted against a flaming backdrop with the headline, “Putin’s inferno.”

The Sochi Olympics have been the most expensive Games ever. From such an expenditure, one would expect a benefit to the host country’s image. And that has generally been the case. But while the Olympics are likely to offer a short-term benefit to Russia on the world stage, its geopolitical tactics will continue to be a long-term problem.

The lesson here, for all organizations, is that your organization’s behavior will have more long term impact than any short-term communication initiative. Ideally, your behavior should be consistent with your communications.

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When Corporate Brand Strategy & Company Culture Collide, Culture Wins

Hal King of King Brown Partners has said of corporate brand strategy, “When strategy and culture collide, culture always wins.”

Those words ring true in today’s marketplace. Having a corporate brand strategy is essential for a business, but it is not enough if the enterprise is unwilling to embrace change and modify behaviors to align with customers’ needs, to keep the brand relevant.

Two stalwarts of the consumer products industry have recently suffered the fallout of the strategy/culture collision, and yet another appears to be facing a similar fate. Kodak recently filed bankruptcy, Sony posted its worst annual operating loss in company history, and now Best Buy is on the ropes with a huge first-quarter loss.

Neither Kodak nor Sony was ambivalent about changing times. Both companies made strong statements about where they needed to go, yet neither appeared prepared to steer their corporate cultures in that direction. On the other hand, Best Buy continues to cling to the culture that earned the retail giant its reputation of a big-box powerhouse in the 1990s, ignoring major changes in consumer buying habits in the process.

Kodak’s downfall was blamed on its inability to make the leap to digital media. But Kodak has been positioning itself as a digital imaging company for more than a decade. Why was it unsuccessful? Because at its core, Kodak is a chemical company whose culture embraced film coatings and processing. When digital media came along, Kodak rebranded itself as a digital imaging company, but the move took it further away from its chemistry-based roots, and company culture could not adapt.

The Sony brand faces similar challenges. Sony has spent billions of dollars marketing itself as an entertainment company, yet has not been able to make the transition in the eyes of the consumer or its employees, who still see it as a manufacturer of premium hardware.

Best Buy may be next. The culture of the company is deeply rooted in consumer choice and selection at its retail stores, but it is exactly this choice that dooms the company; consumers now choose to buy their movies, music, and electronic equipment online. They no longer comparison shop in stores, they comparison shop on the internet, and Best Buy is not a value leader in online sales.

In contrast with these companies is Amazon. Amazon has grown from the world’s largest bookstore into the world’s largest retailer, and is now extending its brand to hardware (the Kindle e-Reader) and cloud computing and storage. Since it began, Amazon’s brand strategy and organizational culture have always been aligned with customer satisfaction, scale, and delivery. This enables them to remain a global player, even in changing economic conditions.

We believe strongly in brand-driven business strategy. What that means is, a solid corporate brand strategy should inspire a company to be have in a certain way. This requires cultural resonance. If those new behaviors aren’t imbued or embraced, the strategy will likely fail. The longevity of a brand relies on a culture within the corporation that thrives on meeting customers’ needs at every level, while at the same time retaining core values.

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