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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".

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.

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.

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.

Changing CEOs Will Not Improve BP's Reputation

BP announced that it was changing CEOs--not now though, but in October. The Board was supposed to show that it was fed up with the leadership or lack of it from its CEO and move the company forward. Why October? Why not now?

It seems clear that BP has a flawed culture. This is a company that does not seem to really get it. Even Dudley, the new CEO, suggested that he has never seen evidence of problems in his career with BP. He indicated that the Gulf accident was a total anomaly for the company. This assertion despite the fact that BP has more federal violations for its drilling operations than almost any other company. Something is wrong and replacing Hayworth--the seemingly arrogant CEO who never seemed to express anything other than the fact that this was just a big bother for him--with Dudley will not fix it.

The rest of the oil industry has now turned on BP. The others have indicated that they would never have run their drilling operations the way BP had done. Everything that has been learned shows that BP had little real regard for safety. The fire alarm on the platform had been turned off; it rejected warnings from those working on the platform that the drilling was not going well; it did not plan for a true disaster. All of these things add up to a company that has an internal culture with little regard for doing things right. The fact that Dudley has never seen this likely means that he is too blind to see things the way an outsider would. He is a BP "lifer". We can just expect more of the same--amazement that anything has gone wrong.

BPs disaster has impacted the entire oil industry and has put a moratorium on deep water drilling. Their cavalier attitude and denial of what went wrong just makes things worse for all. It is really time that shareholders change this board and get them serious about changing the culture at BP.

Companies Should Avoid Political Advertising, Despite New Rules

I gave an interview to a reporter in Minneapolis yesterday about an advertising campaign in Minnesota by Target, Medtronic, and other companies that supported Republican-backed proposals. The U.S. Supreme Court gave its approval in the past year to company political advocacy. Critics have contended that this gives corporations too much influence over politics; supporters argue that companies enjoy free speech, as do individuals and should not be barred from exercising their rights to express their opinions. The Court agreed with the latter argument.

Just because someone is allowed by law to do something does not mean that they need to do it. Minnesota has had a long history of company involvement in the community. For many years, the Twin Cities companies pledged to contribute 5% of revenues to local community initiatives. Many communities around the country have had company involvement in the local community, including building of opera houses, public art displays, etc. Communities and companies have been intertwined for generations. Some applaud this, some are concerned. While many people may separate contributions to local causes from political advertising, they are very closely aligned in that they are aimed at integrating the company into the community. When it benefits the larger community (e.g., art, social needs, etc.), most people applaud it. When it is aimed at influencing the outcome of political debate in favor of the company, it becomes more problematic to the company's reputation.

Companies, in my opinion, should avoid politically-based advertising. There is a general distrust of corporations currently and too transparent an involvement in trying to influence the political dialog is not in the long-term best interests of the company. Companies deal with a multitude of stakeholders, all of whom have expectations of the company--that is what forms reputation. The relationship with stakeholders is a delicate one that requires balance. By getting too aggressive in a political debate, companies can throw this delicate balance off. While they may be within their rights, according to the Court, they should think long and hard before exercising that right.

Target in one company that has decided to get involved actively in advertising on behalf of Republican causes. Its CEO is a major supporter and donor to the Republican party. However, the corporation speaks for its stakeholders, including its employees, who likely are not so clearly in support of one party's view over another. It jeopardizes its relationships by these political actions.

Companies have incredible access to power and incredible influence. A major company can call on any member of Congress it wants. It represents a significant constituency for the member of Congress. Companies have more access and more power than the average person. This power should be used judiciously. It should avoid outright political advertising.

As Predicted, Jobs Gets "Smacked" for Comments

As predicted in my last post, the comments by Steve Jobs about other smart phones and their equally problematic design generated a lot of negative backlash from competitors. Blackberry and Samsung, among others, were quick to point out that their phones do not have the problem with the antenna and dropped calls that Jobs claimed to be common amongst smart phones. The others were likely irritated, but also delighted that Jobs gave them an opening to make comparisons against I-Phone.

This was a dumb statement by Jobs. Regardless of whether others have the same problem, it was tantamount to a kid coming home from school accused of cheating and who defends him/herself by saying that everyone does the same thing. Leaders are expected to live to higher standards and take responsibility for their actions and problems, not blame others. A quick news story has become a continuing investigation. Jobs stepped into this. He should not have and didn't have to. He acted like the class brain who when found to have made a mistake cannot take the criticism.

Apple is a leader and a leader should remain on the offense. It does not need to be defensive. Leaders have two moves; followers have just one. Apple had the ability to apologize, correct the problem, and stress the value of the I-Phone. Let competitors attempt to criticize the design. What Apple did was awful, because it "broke into jail" by allowing competitors an opening and a sense of parity. Apple simply needed to apologize, offer the casing to protect phones and eliminate the problem, and move on. Let competitors squeal about Apple's faults. Leaders move on.

Apple needs to mature. By that, I mean that Jobs needs to mature. He doesn't have to prove that he is the smartest kid in the class. He has shown that he is the most innovative and that customers love what he produces. All technology has problems. It is inevitable. Correct the problem and move on. Remain the leader. This is a far cry from what we would expect of a leading brand.

Is the Sheen Coming off Apple?

Apple is in the midst of controversy concerning its I-Phone4. It seems that if someone holds the phone in a certain way, it drops calls. The problem is that the antenna is housed under a small fissure in the side of the case. It is fairly easy to inadvertently cover the antenna with ones hand.

Apple acknowledges that it knew about the problem before the I-Phone4 was released, but that Steve Jobs liked the design and authorized shipment. Following the controversy, Jobs said that it was not "big deal" because all smart phones have the same design flaw.

Regardless of whether or not other smart phones have a similar design flaw, we have come to expect more of Apple than the rest of the industry. Apple's products cost considerably more than comparable products. They sell at higher price because their are perceived to be of higher value. Apple diminished their perceived value by arguing that they are no different from others. If they are just like others, then their cost advantage disappears. Perceived value is a ceiling on price. If one were to plot a Kano Model analysis or perceptual map, it would show that Apple was--in Kano language--"a delighter", that constantly exceeds the expectations of its customers. Other phones would be fairly similar in their perceived qualities, and fall along a line of expectations--that is, they meet expected standards. Is Apple suggesting that it is no longer a "delighter"? Is it suggesting that it is now at parity rather than differentiated from others? I doubt that was what was meant. The argument by Jobs was a lousy one for any company, let alone Apple.

The solution Apple offered was admirable. They have offered a special casing to all I-Phone4 purchasers free. The casing will cover the fissure and eliminate the problem. That is a good solution, but it was not handled well at all. Apple should have apologized, noted that the design flaw was below the expectations of customers and not up to Apple standards, and then given the protective casing. There is nothing wrong with an apology. Those who apologize are forgiven and respected if they also offer a solution, which Apple did.

This incident shows that while Apple is an outstanding innovator--perhaps the very best--it remains arrogant and a bit immature. I have read articles suggesting that Apple's reputation has been tarnished. I don't think so. This was, as someone I used to work with called "a drop of water on a piece of granite". It doesn't cause much of a problem, unless the water drops continue and start to erode the granite.

There will be critics, fueled in part by a dislike for Apple or Jobs, or fueled by competitors who would love to knock Apple off its pinnacle. However, I doubt that customers will be bothered by the situation, considering that there was a quick solution. I was at an Apple store recently. The crowds were just as large and sales of the I-Phone4 seemed brisk.

This situation was a warning to Apple, though, that it needs to recognize and live up to the standards by which it expects to be judged. It has raised expectations of stakeholders above that of peers and competitors. It is now the most admired company, according to Fortune magazine. It must continue to meet or exceed the high expectations it has created, or it will risk damaging its brand and reputation.

Brand and Reputation are Critical for Non-Profits

Brand and reputation management are often focused on corporations, but there is tremendous upside for non-profits to focus on their brand and reputation.

Non-profits exist on the basis of support of their donors. Without public support, the non-profit ceases to exist. In the current economic downturn, non-profits have had particularly trouble in two areas: 1) fewer dollars from donors; and 2) fewer dollars from corporation. The two are interrelated. The latter--support from corporations--is more problematic for many non-profits since the dollars were larger and there was an expectation of continuing support, which has dwindled, if not gone away entirely.

Let's start with the idea that people have less disposable income. That means that there are fewer dollars for them to give to their favorite organizations, including universities, religious institutions, hospitals, etc. The "pie" is shrinking, but the same number of organizations are looking for support. Add to this, the added pressure that has come from disasters, including the Gulf Coast, Haiti, and others that have sought public and corporate donations. So, the market has become more competitive.

Whether or not they like to admit it, non-profits have historically operated on a principle of "noblesse oblige". That is, that those with wealth will feel an obligation to help those less fortunate. That underlying motivation may still be there, but people must choose more carefully than ever where the money should go. And, there have been a lot of abuses by non-profits of the money they have received and a lot of scams. So, trust is eroding as well, leading to some people simply unwilling to give for fear that their money will not reach its intended objective.

When competition heats up, brands predominate. Brands create the attributes and associations that cause people to see differentiation. If the pie is shrinking, non-profits need to get very serious about differentiating from other organizations and having a compelling value proposition for the donor, whether it be a person or a company.

The brand and reputation also are important for companies. Donations are changing from philanthropy to strategic social responsibility programs at many companies. This means that a non-profit needs to be very attuned to the objectives of corporations around them and match themselves to the strategy of the company. Gone are the days when they can simply expect a company to give them money with no expectations. Social responsibility programs should be tied to the company's strategy and toward the interests of the company's stakeholders. Non-profits need to understand the goals of the company and match themselves appropriately.

My last few consulting engagements have been with non-profits. They have been the most successful projects I have done in some time because we have enabled the organization to think more broadly and become more "corporate" in their thinking, which has benefited them in the way they have approached their sources of revenue and made themselves more competitive in the market.

Will North America Ever Understand Soccer?

I used to live in Toronto, the most multinational city on the planet according to the United Nations. Whenever the World Cup was played, the streets were filled with blaring horns and people running through the streets with the flags of their native countries, all of whom were represented in the World Cup. Very few native-vorn Canadians were amongst the crowds. They, like their souther neighbors in the U.S., seem to be two of the only countries that are not completely caught up in soccer fever.

I went to the 1994 World Cup opener in Chicago with my son, Adam, who was 10-years old at the time. We watched Germany defeat Bolivia. I must admit it was a great spectacle, but I sat there less than absorbed by the game. This year, however, I watched a lot of soccer. I have to admit that I started to realize what a great game this is. I also started to understand why the game has not caught on in North America.

Some analysts claim that Americans rejected soccer because it was played by the British soldiers during the Revolutionary War. That may be the case, but that would not explain why Canada is not a soccer country. Canada is still part of the British Commonwealth and the Queen is still Canada's official head of state.

I think the differences are in North American life style, which is faster than life in the rest of the world. As one of my former colleagues explained, "soccer is like chess; American sports are like checkers". Americans do not like the slow pace of chess, a game that is based upon ancient European war strategy. The favorite sports in the US are "in your face". They are about size and power. US football (and the Canadian version as well) is played by huge men who are smashing each other. Hockey is fast and furious and, once again, is about smashing ones opponents. Baseball was a slow game until it got "juiced" (players, ball and bats) and the game become one of "long ball". Baseball aficionados may love a 1-0 "pitchers dual", but most of the crowd yawns and wishes for a home-run derby.

Soccer requires patience--something we do not have. It requires thinking--something we do not like to do. It requires us to watch opponents out-finesse each other for nearly 2-hours to score, perhaps, only one goal. That may be "beautiful", but it can also appear boring to a society that is used to speed and smash. It is interesting that many countries (Netherlands, Brazil, etc.) were lamenting the change in the way soccer is being played. There is more emphasis on defense. There are more "yellow cards" being given for rough play. Soccer was to be beautiful--like a ballet.

One has to love the interviews with the Dutch today, however. They were admitting that Spain was a better team; that Spain deserved to win They did not curse the Spanish. They did not blame refs or their own team. They accepted defeat. One Dutch fan summed it up: "oh, well, we came in 2nd. That's better than most countries". Imagine that? Someone accepting defeat. Americans are used to seeing t-shirts that announce "second place is first loser". Everyone wants to be #1 or nothing.

The World Cup was a great example of great sport and great sportsmanship. It should be a great point to reflect on why we see things so differently in North America. It likely would explain a lot about why we are so different from the rest of the world.

Is it the Media or We Who Are at Fault?

The LeBron James situation seems to have more people asking whether it is society or the media who are at fault in following the exploits of a 25-year old basketball phenom. There are many people who are blaming the media for following James' every move.

The media are reflections of society. I know that there are those who believe that the media shape the discourse of society; that they have an "agenda setting" function. They may have had at one time. I think we are giving them far too much credit today. The media, particularly the mass media and cable outlets, are struggling to attract viewers. They are also struggling to keep costs down. As a result, we have had a seemingly endless steam of "reality TV" shows. These are cheeper to produce and seem to attract large numbers of viewers. How many more "Bachelors", "Bachelorets", "Last Comic Standing", "America's Got Talent", etc, etc, can we possibly watch. Yet every time we think we've saturated the concepts, along comes "Biggest Loser", "Iron Chef", and more and more. Every conceivable interest is pursued by the media. And, yes, we keep watching. More people vote for candidates on "American Idol" than vote for candidates in real elections. We seem to care more about who has the best voice or best dance steps than who runs the country.

So, is there any wonder that the media saw the opportunity to follow every step LeBron James made? He was the latest reality TV star of the week. His exploits were discussed everywhere. The night of James' announcement on ESPN, I was walking by a high-end restaurant when a man came out of the restaurant on his cell phone asking his friend to watch ESPN and text him LeBron James' decision as soon as it was known. I could tell by his face that he was probably dismayed that he had to have dinner with his wife on such an important night and during prime time.

LeBron has learned to be a master marketer--or he has hired people around him who are good at marketing him. He knows how to milk our interests. But, it doesn't take a great marketer to get the media interested. This week there has been more coverage of what Lindsay Lohan had printed on her nail during her trial than about the debates in Congress over a new financial bill. The media don't care if you have talent; you just have to be of interest to large numbers of people.

There are many excuses for how bad the media have become. They have to contend with 24-hour headline news, the Internet, blogs, etc. The normal media are competing for attention. So, most have become entertainment services rather than news services. Watch local TV in most markets in the US and one wonders where the news is.

So, who is at fault? The media or society? Both are at fault. American society (and I keep this to US society because there still are good news services in many other countries like Canada and the UK in which there are deep discussions of important issues on the normal, nightly news shows, both local and national). American society has become dumbed down to a point that it is all sound-bites and personality. Following LeBron becomes no different from following Sarah Palin or Lindsay Lohan or the President's latest run to get a hamburger, or Bill Clinton at the World Cup. We loose sight of whose personality is important to us and whose is really unimportant in the grant scheme of things.

To quote Pogo: "we have met the enemy and they are us"

Misbranding By Progressives Leave Them Vulnerable

As I sweated through temperatures that approached 100 degrees Fahrenheit (40 degrees Celsius), I kept thinking about the debates over "Global Warming". Following the last winter when the east coast of the US got more snow than usual, the percentage of people believing that environmental change was man-made dropped by some 20 percentage points. I'm sure that after an early and very hot start to the summer, those numbers are changing again.

The term should have been "Climate Change", or "Man Made Climate Change", not "Global Warming". While the considerable snow this past winter was likely due to warming temperatures in the atmosphere, that is way too difficult a concept for many people. Warm is warm and cold is cold. The right wing used some errant e-mails from scientists to claim that all of the hoopla over "Global Warming" was trumped up, biased science. They actually claimed a conspiracy, imagining that most of the world's scientists would or could actually create a conspiracy. Anyone who has ever worked in academia or in a science-based company knows that it is difficult to get even a few scientists to agree to anything, let along create a conspiracy

It was the terminology, or branding of the problem that was wrong. People need to understand that the climate is changing and much of it is due to decisions we humans make or do not make.

Misbranding also can be found in the debate over abortion. Women's rights groups chose the slogan "Pro Choice", while the anti-abortion movement selected "Pro Life". Imagine two product--pro-life versus pro-choice. Which one would engender more emotional appeal? Clearly, pro-life is more emotional. How many people would claim to be anti-life, but that is what the brand "Pro-Life" suggests about those who appose them. On the other hand, the opposite of "Pro-Choice" is "anti-choice". This is hardly as problematic for people to accept. The bumper stickers that declare "it's a child, not a choice", become the nature advertising campaign, but it further obfuscates the real and honest differences amongst people about when life begins and the rights of women to choose for themselves.

We need healthy, open discussion and debate about such serious issues as climate change and abortion, but the branding puts everyone on the defensive. It would be wonderful if we could get all the branding and advertising hype out of these serious issues so that we can really discuss them as grown-ups.

Don't Blame ESPN for Our Craziness over LeBron

I have been reading a number of sports commentators who are blaming ESPN for showcasing the LeBron James announcement of where he intends to play next year. If we can blame ESPN for this, let's blame the rest of the media for giving any attention to the Jersey group or Lindsay Lohan. They are providing the public with the coverage they covet. As the saying goes: "don't blame the player, blame the game".

ESPN is a network that has a brand promise that it covers all sports all the time. They have moved from TV to every conceivable form of media to meet that brand promise. So, when a legitimate sports story--where LeBron James will play--comes up, who can blame them for covering it fully. They must; it's their primary job and expressed responsibility.

Now, don't get me wrong. I think the whole LeBron situation is beyond over-hype. This is a ball player who is looking to find a new home and we all talk about it in every forum available. Even the Daily Show with John Stewart took up most of its conversation with Julliane Moore by talking about whether LeBron would join the Knicks. Both Stewart and Moore are Knick's fans. This is a show that usually focuses on important things. Moore was on the show to plug her new movie. Bet the movie studio was not too happy that she spent 90% of the time fretting about basketball. They never got time to show a clip from the movie, but they did spent about 60 seconds mentioning it.

Americans have developed an unbelievable interest in sports figures--even more than the sport itself. We focus on individuals. Perhaps we are all taken with their huge salaries and life styles that seem almost "other worldly". They live like movie stars, while fans are loosing jobs. Their salaries help push ticket prices to the breaking point for most fans. But, attendance and viewership keeps increasing, so we obviously do not object to already overpriced talent taking advantage of our support. Imagine what will happen to ticket prices in Miami to support the salaries of Dwayne Wade, Chris Bosh and LeBron James!

So, why would sports commentators complain that ESPN should not have given time to LeBron's "people" to air an hour-long show for him to announce his decision? Perhaps the writers are concerned that their purview is being undermined by ESPN. They should wake up and realize that it already has been The never ending talking heads on ESPN make reading sports commentators superfluous. The writer's only purpose now is to focus on local teams.

The media are whores to the athletes. I may not like ESPN's decision, but I think it was the right thing to do. If they refused to air the LeBron announcement, they would not have been true to their basic brand promise.

US Postal Service--Stranger than Fiction

The scenario is a typical one for many companies in the current economy: demand has fallen, people are using alternative products and services. The questions is what to do? For most companies, the answer would be to drop prices to stimulate demand and at the same time to reposition to attract customers back or create new ones. What about raising prices? That would defy all logic in business. What would be the sense of raising prices when customers already are not interested in the product? Wouldn't that just cut the demand still further?

Well, none of these scenarios make a bit of sense when we're talking about the government or agencies of the government. The demand for postal services has gone down, replaced by the Internet. The answer Postal Officials have come up with is to raise prices by 9%. Think about this increase--inflation is running flat, prices on everything are falling. But, the Postal Service raises prices by 9%. The Postmaster General estimated that this increase would cover the losses of the service and maintain service. The estimates are undoubtedly based on current demand, which will likely dip still further given the increases and further erosion of the traditional mail system by technology. So, there will clearly be another short fall due to continuing drop in demand with a call for more increases next year. This should not even be legal. It almost sounds like the Mafia: "we'll make you an offer you can't refuse".

We can be assured that when the USPS goes to Congress for permission, it will get the go-ahead. What would the alternatives be if they were turned down? My goodness, it would be to cut their costs to the bone; lay off workers, cut back on hours, cut prices of their products, etc. This is what one would expect from any business manager with a brain facing a similar situation. But, once again, this is the government. So, rather than cutting costs or laying off more workers or cutting hours or cutting the price of stamps to attempt to get more people to buy and use stamps, they will go in the opposite direction.

This is all stanger than fiction. It is beyond the logic of any first year business student. The whole country is suffering from the effects of the Great Recession, and the Postal Service decides to raise prices. Will this decision reverse the decline in demand for services? No. So, what will the Postal Service do next year when demand falls still farther? Well, it will raise prices again. This is the height of audacity--we'll do it because we can. If you don't like it, don't use the mail. Oh wait, you already don't use the mail? So what, then we'll raise prices again next year on those who do.

It will continue to work this way until the legal profession finally accepts documents as legal that are faxed or e-amiled. Companies are the ones forced to use the mail system. But, wait a minute, that would take a change of the law which means that it would entail governmental decisions made by lawyers to change things from which they benefit. Fat chance. So, the illogical and almost criminal decision by the USPS will impact businesses most, especially mid-sized and small businesses (who else usually suffers?).

To quote the wicked witch in the Wizard of Oz when she was melting: "what a world, what a world"!

Netflix is Ruining its Great Reputation

I have always admired Netflix. Who wouldn't? Here is a company that was created by Reed Hastings because he had a $40 late fee at Blockbuster. He created a company with a unique customer algorithm, similar to that used by Amazon, that matches customer preferences, and with the ability to source materials for the most niche of movie interests. At the same time, Blockbuster was focused on major hits and keeping an inventory in its many stores.

Netflix was able to see the future and adapt to video-on-demand and downloadable movies, even doing deals with video game makers and DVD player makers.

All of this was admirable. I use Netflix as a case study in my MBA and Executive MBA classes. Now, Netflix has decided that it makes sense to move into pop-up ads on websites. Instead of keeping awareness high, they are becoming a nuisance. Instead of remaining an admired brand, they are ruining their reputation. They are becoming the equivalent of being stuck in a room with a life insurance salesman who just won't stop talking.

I don't know who is advising Netflix, but I wish they would step back and remind themselves of what made them such a valuable brand and return to their roots. Stop the interruption, pop-up ads. Those are for lesser companies.

BP's Independent Gas Stations are Hurt by the Spill

Business is reported to be down about 20% at some BP stations. This is even more severe than after the Exxon Valdez accident when Exxon lost about 5% of its business, some of which it has never regained. As a result, reputation experts began to estimate that reputation was worth about 5% of revenues on an annualized basis. It actually could be worth more, depending on the severity of the reputation damage that is done.

Among the victims of the BP disaster are the owners of BP gas stations. In the US,virtually all of the dealers are independent owners and operators--they have no relationship to BP other than selling gas under the BP brand. They are suffering and taking flack from consumers. Gas stations are being picketed.

A consumer has only three ways to show their disgust with BP: 1) they can urge their member of Congress or Senator to punish the company, 2) they can boycott BP gas, or 3) they can divest themselves of BP stock, if they hold it or urge their company to divest the stock from its portfolio.

This is a situation in which there is no upside for the dealers. They have a business relationship with a bad actor. As a result, the diminished brand equity and reputation of BP will continue to hurt them. They can scream and explain themselves all they want, and we can all feel sorry for them, but they are collateral damage. If consumers continued to buy BP gas they would not only be supporting the gas station owner, but also directly benefiting BP. I feel sorry for the station owners, but there is no way I am going into a BP station.

We've seen this situation in other markets. Toyota dealers are independent of the company, yet they were suffered great damage during the Toyota recalls for acceleration and brake problems. Most car dealers are independent. What can they argue? "Buy a car from me because I have nothing to do with making this lousy car"? Sorry, but brand associations are what lead you to make your purchase of the dealership in the first place. You linked yourself to the brand, for good and for bad. You are now suffering the impact of that brand association. We need to remember that there is truth in what our Mother's always told us: "we will be judged by the company we keep".

So, we can feel sorry for the independent BP dealers, but they benefited from the great reputation that BP had for so long--I'm sure that is why many of them wanted to own BP stations. They chose wrong brand association. Life is not fair.

Endorsed Brands Take a New Twist

Endorsed brands have always been an important brand strategy. Endorsements take on different variations. We continue to see people with lab coats acting as doctors to endorse the efficacy of a product or demonstrate what a "talk with a doctor" might look like. There are Ralph Lauren and Eddie Bauer interior in cars. Reebok sponsors work-out rooms in hotels. Martha Stewart is an endorser of towels, pillow cases, dishes, and other home products. Her name provides a risk reduction for those who are not certain they know how to properly decorate their homes. Oprah's endorsements can drive book sales, generate traffic at stores, and create new celebrities (Dr. Phil, Dr. Oz, etc. were all created by Oprah and have now become their own celebrities and are now endorsers).

Endorsements are designed to lower fear, uncertainty and doubt in the purchase. Endorsements are not designed to attract everyone. They are designed to attract the target. They connect the target with people who are admired or looked up to. They are a reference group--someone we aspire to be like or be associated with. A Nike shoe is a brand, but an Air Jordan takes on a whole new dimension because Michael Jordan is behind it. His endorsement was so strong that LeBron James actually said one time that he thought he could jump higher when he was young because he was wearing Air Jordans.

As a result of social media, consumers have become even more skeptical or celebrity endorsements, so a new twist has occurred. Celebrities like Ashton Kutcher and Lady Gaga are now taking a piece of the company and taking on management roles within the company so that their endorsements are not only more believable, but so that they share in the success or failure of the company (actually, there is little downside for the celebrity from a monetary standpoint since they get paid as well as a getting equity). Kutcher, for example, is going to be the head of social media for Popchips, a line of potato chips that are baked rather than fried. He is considered a social media expert because he has more Twitter followers than almost anyone on earth. He may not really know social media, but his Tweats about Popchips will likely lead to increased sales--at least amongst people who like Kutcher.

We saw how intimately tied companies and products are to their endorsers during the Tiger Woods problems. Accenture dropped Tiger immediately because his endorsement was no longer appropriate for a consulting firm. At the same time, Nike continued to support Tiger since he was responsible for the rise of Nike Golf. His personal issues could be separated from his athletic prowess. Tiger may not have had a piece of the equity at Nike, but he has a lot to say about design, similar to the input and responsibilities that Michael Jordan had at Nike.

Nike better watch closely what is happening. If Tiger or Jordan wanted an equity stake in the company, they would command a lot a hefty amount of stock--more than shareholders might be willing to tolerate, but the negotiations and calculations would be very interesting.