Monday, August 30, 2010

Wednesday, August 11, 2010

My Blog is Moving

I am moving my blog from this stie to my website-- I hope that you will continue to follow my thoughts and share your comments.

Tuesday, August 10, 2010

Rebranding Atlantic City--Good Luck!

The government of New Jersey plans to take over Atlantic City and run it as a "tourist zone". The city, according to Gov. Christie, "is dying". Having just been in Atlantic City for the first time in many years, I can attest to the governor's perception. This is a terrible city. Gambling has not helped.

Atlantic City was once called "America's Playground". It was where the World War II generation went on vacation. The boardwalk had grand hotels. People got dressed up to "walk the boards". Clubs boasted concerts by Frank Sinatra, Tony Bennet, and other great entertainers. The 1960s and later were not kind to Atlantic City. The "baby boomers" abandoned the resort for other, more attractive places. Political corruption was rampant. The city decayed and the poverty and crime levels increased.

When gambling was introduced to AC in 1978, it was designed to save a dying city. It also was expected to generate needed tax dollars for the state. At the time, AC and Nevada's cities were the only legalized gambling centers in the US. Slowly, gambling was introduced on American Indian lands. Next came slot machines, which many states introduced. Recently, a number of states, particularly Delaware and Pennsylvania, which border New Jersey passed legislation to allow table games. Even the slot machines were taking business from AC. Now, with table games, the competition is head-on and AC will likely be further hurt by those who no longer have to go to this awful city to gamble.

Now, from a brand perspective, let's understand what Atlantic City's primary attributes are: gambling, entertainment and the ocean. The boardwalk was a major attraction, but it is so seedy that few really want to walk it very far. Each of these attributes can easily be duplicated in other locations. Gov. Christie wants AC to attract families who want to come to the beach and also have the other things available. But, the entire coast of NJ is comprised of beach towns, most far more attractive for families than AC.

So, where does this leave Atlantic City? While Gov. Christie, a Republican, decries government run enterprises, he has put in place a government take over of a community--ergo the gaming business. This may be unavoidable given how far AC has fallen, but it likely will prove to be a major failure. To revive a dying brand requires a number of things to be in place: 1) that at least a few of the attributes that once made the brand attractive need to still resonate with the target; 2) that there is still a competitive space available; and 3) that the infrastructure is capable of handling the brand. I do not see where AC has the ability to be revived. The attributes of attraction have been lost on at least a generation. Those who recall AC fondly are those 60+years of age. They may be drawn once, but I cannot imagine regular returns. The infrastructure of the city is broken and corrupt. I cannot imagine the state offering better management. And, as noted, the competitive space has shrunk.

Brands are easier to build than they are to change. AC has gained a solid, negative reputation, long entrenched as a dirty, crime-filled community not attractive to most people. Getting people to change their views of AC would be one thing if there were few alternatives. With a growing number of alternatives, the attractiveness needs to be overwhelming. I can imagine lots of specials and a wonderful ad campaign--lots of money to be spent. All I can say is "good luck".

Thursday, August 5, 2010

Strategic Planning and Brand Management Must Align

I have always believed that brand management is an outgrowth of strategic planning. Too often, a so-called brand company--usually a firm focused primarily on design, or a PR or advertising agency--comes in to an organization and goes through a brand audit and proposal. Far too often, the recommendations of these firms have no connection with the overall strategy of the company. They do not look at the mission. They do not understand if the company has the internal culture to meet the brand promise. All they seem interested in is a creative solution in terms of design or messages. These activities are doomed to failure and are very costly to the organization in more ways than one.

The costs are not just monetary. Organizations that engage in superficial brand activities actually create a division between their brand promise and its actualization, both internal and external to the organization. Employees look at the brand as being disconnected to the reality they know, and customers learn that the organization makes promises it cannot keep. This creates additional cost in terms of diminished reputation. In one study by Majken Schultz and Mary Jo Hatch (the Expressive Organisation), it was found that some 70% of employees at companies the researchers studied, did not understand and were not committed to the brand strategy of the company. Considering that it is impossible to have a corporate brand if the organization cannot live it, what the authors found is a typical recipe for disaster.

Because of these problems, I developed a process called DIFFERS, which starts with strategy before getting organizations into branding, organizational engagement, and marketing communications activities. It forces companies to think strategically and not jump to the more creative aspects of branding.

Recently, I had the opportunity to work with a strategic planning company, Ambler Growth Strategy Consultants, on a brand process for an organization. While strategy should be done before branding, the organization had actually engaged my firm first. We had developed a great positioning, tagline and new name for the organization. It was based upon the best available information we had. Then, the organization began working on its strategy for the future and we realized that everything we had done had to be changed. We developed a new positioning and tagline for the organization. The strategy consultant expressed happy surprise that we were so willing to change our direction and admit that we needed a new positioning since the target markets had changed. She indicated that many brand and advertising firms she had worked with would have remained committed to their original work. While this was nice praise, it was a poor statement on the brand industry. Most branding firms I have worked with in the past are more committed to the "artistic" aspects of what they do rather than the strategy.

Most organizations are suffering from a "trust deficit". Is it any wonder trust is diminished? Stakeholders have come to expect that companies care more about what they say rather than what they do. This is the fault of bad management, but it also is the fault of a marketing and communications industry that is not doing its job correctly.

Sunday, August 1, 2010

The Association with AT&T Is Hurting Apple. So Why Would Blackberry Choose Them for the Blackberry Pad?

Talk to anyone who carries an I-Phone and one gets two reactions: 1) they love the phone, and 2) they hate AT&T, the telecom carrier that Apple chose as a partner for its phone. Verizon had been approached early on but would not accept the conditions that Apple imposed. AT&T, needing a major success, accepted Apple's conditions and gave itself significant revenue and prominence. A large portion of its customers are with AT&T only because it is the only carrier for the I-Phone.

If an when Apple gives the I-Phone to other carriers, AT&T will likely loose customers. They may not depart for T-Mobile, which may get the I-Phone, but if and when Verizon gets the I-Phone, the exodus of customers will be by the thousands, if not millions.

Brand associations are important. Partners are important. As our mother's always told us, "we will be known by the company we keep". The I-Phone is negatively impacted by its association with AT&T. It is a true testament to the brand strength of Apple and the quality of the I-Phone that customers are willing to put up with dropped calls and poor customer service to stay with Apple.

Now comes word that Research in Motion, the maker of Blackberry has a competitor to the I-Pad ready for shipment in the fall. To be known as Blackberry Pad ( or at least that is the name that Blackberry has licensed), the device is supposed to offer improvements over the I-Pad, including a front and rear camera to offer Skype conferencing. Obviously this is something that Apple can offer in its next generation I-Pad, but Blackberry has owned the corporate market and will further secure that position. So, why is Blackberry ready to give its "pad" to AT&T? Can the deal be that good from AT&T that it is worth damaging the Blackberry brand?

AT&T offers Blackberry, but so does Verizon. Those I know who have their Blackberry with Verizon seem much more pleased with the quality of calls and the lack of dropped calls compared with those who have their phones with AT&T.

Verizon may not be as willing to compromise and deal as is AT&T, but I hope that Blackberry's marketing team realizes that its brand will be partially associated with the carrier it chooses. If it really wants to establish clear differentiation from Apple, it should select Verizon and demonstrate the full value of its new product, and not allow the problems at AT&T to diminish its offering.

Thursday, July 29, 2010

What Has Happened to the Great J&J Culture?

For many, many years, Johnson & Johnson was the most admired company in the world on virtually every survey. It built its reputation as an honest, trusted maker of pharmaceuticals, diagnostics and consumer products. Its trusted position was secured in 1982 when it suffered a devastating crisis in which Tyleno, laced with cyanid killed 7 people in the Chicago area. The reaction from J&J, whose McNeil Labs makes Tylenol, is perhaps THE case study for both corporate values and crisis management.

J&J has had a Credo since 1948. It was written by General Johnson at that time to let potential investors know how he was running the company. If they agreed with his direction, they were welcomed to invest. He set expectations, which, as I have mentioned on many occasions, are the basis of reputation. There was to be no surprise for how the company would operate. The Credo has only four paragraphs which discuss J&J's "responsibilities". The responsibilities are, in the following order of importance: to customers, employees, communities and shareholders. J&J was clear that if it were true to meeting its responsibilities to customers, employees and society, shareholders would be well served. Its Credo is the inverse of the way most companies operate, putting shareholders #1 above all others.

When the Tylenol crisis hit, Jim Burke, the then Chairman of J&J asked his team to read the Credo and decide from it what course of action was appropriate. It was clear that J&J had to pull Tylenol from shelves. It also stopped all J&J advertising. Within two-weeks of the crisis, J&J introduced a new, triple-sealed Tylenol--an enormous R&D and manufacturing accomplishment. The company did not look at this as a crisis of one product, but rather a crisis for the entire company. Tylenol regained its previous market share within four-months, despite the predictions from many who said that the product was dead. J&J went on to be admired for its actions. Its trustworthy actions built trust amongst stakeholders.

J&J's culture, as captured in the Credo, was tested during that crisis and was reinforced as being its guiding set of values. Whenever something was in question, the company could return to the Credo.

So, it comes as a major shock to most observers that the same plant that made Tylenol--the Ft. Washington, PA--plant, is now shut down and is being investigated for the lack of adequate safety precautions. It was making Tylenol that exceeded proper dosage--a potentially deadly situation. The Federal Drug Administration has said that it was following the problems at the plant. J&J officials appear to have known about the lax safety and quality programs there and turned a "blind eye" to them.

This is not the same J&J company. This is not the company of the Credo. This is a company that seems to have focused so much on cost containment that the message got people moving in the wrong direction. The entire management team should be held to account for this. I can't even imagine what this has done to the "psychy" of former J&J executives who are looking at a company that is a far cry from the one they used to work for. J&J has slipped mightily and with that slip has tarnished one of the brightest stars in the corporate horizon. Let's hope that this shocks J&J management back to their senses and that they renew their faith in and focus on the Credo. It is even more important today than it was when written some 60-years ago.