Nissan (Datsun) and Toyota both recognized that they could not brand extend successfully in that way. (Alfred Sloan understood that almost 100 years ago.) Thus they created Lexus and Infiniti, two successful brands while maintaining strong positions with their original brands. What outcome could Hyundai possibly expect from this effort (other than enriching their brand agency)?

There is some discussion that this may be a prelude to introducing an “upscale” brand like Lexus or Infiniti. If that’s the case, there is no need to reposition or brand extend the core Hyundai brand. And if they do create some “modern premium” position in the mind of consumers, how will they do that without scrapping a bunch of the lower-end cars in their line?

Brand extensions almost never work for anyone except the brand agency paid to try.

Mitch

Our view on Super Bowl ads comes through in our commentary and regular readers will understand our bias. However, Jonathan Baskin wrote an article in Advertising Age, which we feel sums things up pretty well from our perspective. We commend it to you.

Mitch

Further to my earlier points, the article states, “Experts cite three reasons that QR codes haven’t caught on. First, people are confused about how to scan them. Two, there’s little uniformity among the apps required to read them. Last, some who have tried the technology were dissuaded by codes that offer little useful information or simply redirect the user to the company’s website.”

Melissa Parish of Forrester Research calls them the next “shiny object.” The author makes the point that, “The appeal to marketers is clear. Implementing the codes is far less expensive than developing a proprietary app. They offer the ability to measure consumer activity and can provide shoppers with information, freeing up salespeople and increasing productivity.”

But as he notes, if the payoff isn’t there the consumer won’t use them again. I have said since my first post on this subject that it is not about not using your QR code again, it’s about destroying the consumers desire to ever use them. For this reason I predict they will die.

What will cause their death? Limited space on packaging. While the ink is free, the space is limited and right now marketers have the delusion that the QR code is the best use of that space. Or they need to “keep up with the Jones” so they offer the code.

This a perfect example of confusing activity with results.

Mitch

Most companies have a similar measure, an analogous sub-set of raw sales data, that they out to be looking at when they review sales every quarter, and decide on incentive schemes for the sales force.  Many companies, however, don’t.

Do you?

Ralph

1) 20 minutes is way too long, and I’m now resentful.  I forget the exact number, but I seem to recall “three”, as the correct number of questions to ask in order to get helpful, cooperative, actionable answers.  This has been well-known for decades.  How could management approve something so completely at odds with good practice?  I like my doctor and her office staff, and even the cooperation they work for.  But even I was tempted to simply hang up.

2) Because everyone knows how inconvenient they are, people with gripes are more likely to want to commit to answering telephone surveys.  Why not take this inherent bias out of the picture by saying up front, “I have 3 quick questions and they won’t take more than a minute”?

Basically, I’m just aghast that in 2012, survey companies are still doing these ineffective surveys and causing resentment in their client’s customer base.  And I’m really aghast that there are still people in management who approve it.

Ralph

Happy New Year.

Mitch

Of course, new developments come along, and techniques change, but the new knowledge is almost always incorporated into training and performance in the form of a basic — not something that is only for “advanced” people in the field; that is:  it’s incorporated into the basic training of the discipline.

It’s the same in business management.  Almost nothing that makes a company successful is not part of the basic “blocking and tackling” that any business has to do.  There are no magic techniques that can be granted to you by some wizard.  The best companies just do what we all learned in management ( or marketing) 101 through 501 excellently, consistently, and with discipline.  There are no secrets, only discipline and the leadership to encourage it.

This is why we are focused on process management in our practice.   New developments in strategic marketing come along only so often, but the lack of a practical tool (process management)  to leverage the basics that most companies already have is usually the missing element in obtaining excellent performance.

Ralph

Sure, you have quality control in your manufacturing (or service) process: quality is measured by each downstream activity, any internal work station is empowered to shut down the entire line, blah, blah, blah.  Great.  But how many of you take it to the ultimate step, and encourage the ultimate “downstream” activity — the final consumer — to chime in on the quality of a particular product?

My bet is: not too many.  And my question is: why not?  The ability to individually number even items that are produced by the hundreds of thousands a day is pretty inexpensive and technically trivial.

Do you really care about quailty?

Ralph

Turns out we are 60 years late to the party.

The November 2 edition of Advertising Age had a very, very interesting article by positioning and brand guru Al Ries. Take a look at this excerpt (and ignore the sexist language):

When I started to work at General Electric…marketing was an omnibus concept that gathered all of a company’s exterior activities under one umbrella. As General Electric’s 1952 annual report put it, “The marketing department will establish for the engineer, the designer, and the manufacturing man what the consumer wants in a given product, what price he is willing to pay, and where and when it will be wanted. Marketing will have the authority in product planning, product scheduling, and inventory control, as well as sales, distribution and servicing the products.”

What the heck has happened to Marketing over the last 60 years to go from that correct definition to the limited one most companies use today, by virtue of the role they give their Chief Marketing Officer? For those of us who’ve been advocating this very same concept of marketing as the fundamental function of the corporation, this is interesting, indeed.  It turns out that we’re not rebels or pioneers, but keepers of the flame!

We have long distinguished between the “front end” of marketing, A.K.A. strategic marketing, that encompasses research, product planning, market selection, and product development, from the “back end” of marketing, A.K.A. tactical marketing, which encompasses the traditional promotional activities of advertising, promotion, sales support, and branding…which unfortunately is what the term “marketing” has come to mean almost exclusively today (our book, Value Acceleration, explains this division of marketing in much more detail).

Every serious person who has looked at how to improve corporate success has arrived at the conclusion that all the leverage is in doing a better job at the marketing “front end” (for example, the Product Development Management Association has conducted too many studies to list that have arrived at this conclusion).  In our practice we propose a process-centric approach to marketing’s front end, to its integration with marketing’s back end, and to its integration with other corporate functions.  This is a way of achieving the vision articulated in GE’s 1953 annual report with tools validated by the undeniable success that business process management has achieved since that report was published.

Some truths never change!

Ralph and Mitch

Major retailers, including Safeway and Kroger, are hiring product and brand managers to grow these product lines. The article notes that a 1% shift from national brand to house brand translates into $5.5B in increased revenue for the retailer.

The primary value to the consumer of the private brand has previously been adequate quality at a lower price point. “Adequate” being a relative term. More house brands are finding ways to offer “quality” at least equal to the national brand at a lower price point. (The title of the article says it all.) McKinsey notes that 75% of consumers who “traded down” to private label during the recession have no plans to switch back when conditions improve.

That’s because they actual did not trade down as McKinsey suggests. Consumers have found that in many cases the national brand does not offer added value, only added costs. The difference in price between private brands and national brands may narrow however, as the retailers add costs (brand and product managers and their needs) to the mix. If the house brand vs. national brand price gap narrows from the 20% or so that it has historically been, this will increase the need for the retailers to make sure they are “keeping up with the Jones” if they want to maintain or increase their market share.

Mitch