Weblog Consulting Register Login Subscribe to Free Influx Emails Join our Facebook Group Follow us on Twitter Branding Street Cred Technology Lifestyle Style Entertainment Interviews Art InfluxTV Map Widgets RSS — All Subjects RSS — More Feeds

Search

Advanced Search

Contact Privacy Policy

It takes decades to create a reputation and only a few days to destroy it, Toyota is the latest brand to be falling into the death spiral with a massive erosion in its equity.

Something that it's key competitors can only be extremely happy about, especially when a number of the players including- GM, Ford and the the emerging Korean brands have made such strides in this space.

The problem is especially acute for Toyota because quality has been such an integral part of the company, management books have been written about it and the whole DNA of the organization is structured around it.

It's been suggested that Toyota's push for growth has been the cause of all these problems. It was so fixated with overtaking GM to become the biggest automaker in the world, that corners were cut and compromises made.

Pushing hard for growth has been the undoing of many a great brand.

Toyota's problem seems to a show a lack of understanding of how to scale their production to achieve optimal quality and not thinking hard enough about the impact of potential failure on the brand.

Starbucks is another brand who expanded way to fast and ended up diluting their equity.

In both these cases, while it certainly true that they built amazingly powerful brands, they failed to treat them with respect and didn't use tools to help them to understand the resulting impact of over-expansion on their most valuable assets.

Quite simply, their brands were important, but not important enough to be front and center of the CFO and CEOs agenda.


Posted by Ed Cotton It was not so long ago that employees in most retail environments were held in little regard by marketing teams. Sure, there was some training, but in the main they were under utilized as brand communicators.

This was obviously something of an oversight and since the sale of Zappos to Amazon and the 12 page essay on the company in The New Yorker, it's now fashionable to make sure employees are a critical part of your brand arsenal.

The latest case is Starbucks who seem keen to shine a light on the diversity and personality of its employee base and is turning to user generated content to collect the stories.

On the site My Starbucks Story, employees are encouraged to make a video that explains how the company fits into their lives and the role they play at the company on a day-to-day basis.



It's unclear what's going to happen to this content, but generating it will give the brand the opportunity to showcase the unique characters that make the Starbucks workforce.

I guess we are going to see more of this stuff in the future as companies try to become the "Zappos" of their category.


Posted by Ed Cotton Starbucks is a brand that grew from the ground up and always flirted with marketing in a a way that it never felt comfortable with.

However, given a year of declining comp store sales and an erosion of the brand, marketing appears to be firmly back on the agenda.

At a recent Goldman Sachs conference, the CFO of Starbucks talked repeatedly about marketing initiatives that are doing to be driving the company forward.

There's a big focus on pricing, the company is trying to bring real science to its strategy here. Doing lots of consumer research to understand sensitivities by region and digging deep to understand what it costs to make a drink by store.

In addition, there are big moves on new products, with Via- an instant coffee, becoming a huge priority nationally, but the brand also has global aspirations. Watch out Nestle! There's also expected to be more development of Starbucks branded business as it looks for high margin opportunities outside of the store.

Inside the store, there's a renewed focus on bringing product and service excellence to customers. There was a feeling its competitors had caught up and now was the time for the brand to re-establish itself in this area. Satisfaction studies seemed to show that these efforts have been working.

There was little talk about the much lauded entertainment properties, record deals with the likes of Sir Paul, might be put on the back burner, while the company gets the basics right.

One clear signal that was sent out by the CFO was a willingness to be heard and noticed in communication, the brand wants to take the fight to McDonald's and it's looking at an arsenal of tools including traditional and social media to do this. The brand's status as the the no1 Facebook brand, in terms of fans, was mentioned.

The other striking thing about the new strategy, is how conservative it is, the company is not expecting the economy to turn around any time soon and is using this opportunity to re-tool for a new normality.

The strategic efforts to re-tool the brand seem disciplined, focused and appear to be paying back in the short-term. However, this is a very different Starbucks from the company that 2 years ago was on a rapid fire expansion drive for global domination.


Posted by Ed Cotton Pricing is obviously one of the critical components of marketing, but it's little discussed by communication agencies and seems to be the domain of number crunchers client side and consultants.

I think it's interesting how Starbucks just announced a new pricing play- basically splitting it's market in two by raising prices on the more sophisticated drinks and lowering them on the simpler ones.

It seems like a smart play for these times which seems to be predicted on the idea that there's a mass market opportunity for basic coffee that Starbucks wants to be part of and doesn't want McDonald's to steal it's share and it's got it's captive base who it wants to pay more.

Time will tell to see if this pays off.


Posted by Ed Cotton Tom Formeski's recent post about social media and brands is an interesting take on brands that don't really respond to negative responses on social media platforms.

Tom singles out Apple and Wells Fargo as examples of companies who don't really to respond to negative comments. He claims that because they face no repercussions for their inaction that this is a bad thing for the social media marketing mavens.

It's a  complex subject and involves understanding how people relate to brands. Certainly, there's an impact to bad news and some consumers react, communicate vocally and exit from the brand. However, it's all about brands having strong "mental balance sheets", if people feel that overall the brand is doing a good job they will give the benefit of the doubt and allow it a few indiscretions.

I would argue that all brands need to be aware of the balance of the conversation by monitoring and evaluating it.

There's no doubt that brands like Dell needed a response when the conversation turned against them and they turned things around rapidly. Interestingly, Dell is a brand heavily invested in social media, but one that's yet to reap the rewards. This is because a turnaround is a long uphill battle involving product and category evolution.

Starbucks is another brand in the same postion. In a recent report by The Altimeter Group, Starbucks ranked as the no1 brand in social media, but as we all know, the brand is in something of a crisis.

Incidently, Dell ranks as No2 in the Altimeter study, suggesting that the most troubled brands are currently the most invested in social media.

Then there's Zappos who used social media probably to enhance its value, who recently sold to Amazon for for close to $900 million.

Social media engagement is no guarantee of instantaneous success and it doesn't replace the need for product and service excellence. At present, it's return on investment story seems undeveloped at best. We are the early stages of learning about this world, but within the next 24 months, companies will become much more strategic about goals and objectives setting for social media across divisions.

At present, as Tom suggests there's no penalty for brands with strong "mental balance sheets" not engaging in social media, as the field becomes more crowded and brands get to understand it better, this is not likely to remain a "truth" for much longer.


Posted by Ed Cotton "15th Ave. Coffee & Tea was founded on the core principles that have made Starbucks successful: a focus on premium quality, passionate partners and a rich customer experience. It shares Starbucks mission and values, is pioneered by Starbucks partners, and offers Starbucks whole bean coffee and Tazo full-leaf tea, delivering the same high quality with the same heart, but in a new way."

From a press release describing the new venture in Seattle.

Did a computer or Google generate this press release based on an analysis of 6 million other press releases?

It sucks the life out of the idea of a local coffee house.

How would a local coffee house launch itself?

Would it send out a press release?


Posted by Ed Cotton