Friday, December 19, 2008

Brand Failure and the Big Three



Recently I was asked to share some thoughts on the brand failures of the big three automakers with Adaora Udoji, John Hockenberry and the listeners of their Public Radio show, The Takeaway.

Adaora asked; "Did the brand of the American made car fail the American consumer? If so, when? "

Great brands know themselves and shine like beacons; lighthouses by which consumers navigate. The ability to predict an experience before we have it is the purpose of a brand. We know it will be thoughtfully designed and reliable if it’s a Toyota, that it will be exhilarating if it’s a BMW, but if it’s a Chrysler, what does that really mean?

Detroit’s willing disregard of the most basic tenants of branding coupled with a lack of focus on anticipating and delivering against consumer needs has contributed to the colossal collapse of the industry.

In preparing for my radio debut, I reached out to NYU professor, Robert Salomon, who pointed out two major gaffs by the Big Three; Detroit has over done it with production that exceeds demand and they've created a complex web of far too many brands. BMW has the 3, 5, and 7 series. Can you name all the Chrysler or GM brands off the top of your head? Either company could cut the number of brands it offers by half, increase efficiencies, and boost customer awarness and affinity.

Beyond creating far too many options for consumers (creating a paradox of choice), the Big Three churn through brands at a rapid rate and retire brands for reasons that are hard to fathom. The Ford Taurus was a hit in 1996 and instead of investing in a process of continual innovation, Ford discontinued it in 2006. Chrysler introduced the popular Neon in 1995 to great fanfare as articles in business publications hailed that Detroit had finally made a great small car. Unfortunately, it was discontinued in 2005. Contrast that with the Honda Civic which was introduced in 1972 and has been continuously made since then, or the Toyota Corolla which has been continuously made since 1968 and improved for 40 years.

Kelly O'Keefe, brand guru, VCU Brandcenter faculty member, and Detroit native points out, "It’s hard to be loyal to a brand when they keep taking away your favorite vehicle. The constant juggling looks like chaos to the consumer, but there’s another problem with it. It becomes a distraction from refinement. We all know that innovation is seasoned over time. History often forgets that innovations like the iPod took years to perfect and gain widespread adoption. Foreign car makers stick with their brands and improve them, year in and year out. They keep it simple and they keep getting better. By churning brands so frequently, Detroit doesn’t leave themselves the time to get it right."

After I left the studio, I thought about the most basic principles of branding that the American car companies could observe in order to get things back on track.

Branding and the Big Three: 7 Steps to Brand Recovery

1. Nothing kills a great brand faster than a bad product. Or, as my friend Kelly Hoey likes to say, "you can’t polish dirt!" There is no amount of advertising or promotion that will cultivate consumer trust and loyalty if the product doesn’t deliver.

2. Great brands know themselves and act with unwavering consistency. Nike stands for one thing – authentic athletic performance. We see this in every product they make, every ad they run and everything they do. As a result, we trust them.

3. Brands that lead with behavior and not rhetoric win. While Ford talked about “Quality is job 1,” Honda delivered a quality product every day, and has for over 30 years.

4. Anticipating consumer needs leads to game changing innovation and marketplace advantage. Tide is over 60-years old and remains one of the fastest growing brands in the P&G portfolio. Their growth, leadership and profitability are attributable to a clear understanding of the customer, a desire to make life better, and a committed focus on continuous innovation.

5. Satisfying a customer means not only meeting their needs but satisfying desires. Whole Foods turned grocery shopping into high art and capitalized on a wave of foodie obsession.

6. Brands that cultivate a sense of belonging create emotional bonds with consumers that are almost impossible to break. Apple told us that they were for the crazy ones, those who dare to think different and in the process, change the world. Who, among the rapidly growing creative class, would not want to consider themselves among the crazy likes of Gandhi, Picasso or Amelia Earhart?

7. Great brands inspire evangelism. Ikea, Mini and Google enjoy profound mind- and market-share with astoundingly small advertising budgets.

1 comment:

Campfiresteve said...

Hey, right on, Elizabeth! When you make a list of fhe Detroit car company 's failures, it's impossible not to take race and history in Detroit into account as well.

American cars for the past 40 years have been designed by people living and/or working in isolation -- isolated suburbs of a far Northern city destroyed by racial tension in the 60's.

This sense of isolation extends to their marketing partners whose offices are located in industrial parks far from what little city center still exists. Innovation and an understanding of consumers needs are largely foreign concepts in these settings.

Saturn, one of the few "lighthouse" GM brands, withered away when brought back into GM's suffocating Detroit culture. It's no accident that the last great cars Detroit produced were the muscle cars of the 60's & early 70's (let's ignore issues of gas mileage here).

As an analyst for Barclays Capital points out in today's Times, the automaker's 4 issues come down to: Cash, Cost, Cars and Culture. I would argue the last C, Culture, is the hardest to change - and deeply connected to Detroit's geography and history.

White flight destroyed Detroit and contributed to this once great city's industrial demise.