While Professor Joe Plummer and I may not see eye to eye on everything (see my post on the definition of engagement), there is one thing we definitely agree on: an enterprise can achieve optimal results only when its business and its brand are aligned to work in synergy. When business and brand are out of synch (as happens all too often), the return to the company and shareholders is compromised.
Joe and I participated in a panel discussion on global branding at the NY AMA’s session last week. The third panelist was Trena Blair, vice president at American Express. The session was hosted by Randall Ringer, co-founder and chief strategy officer of Verse Group, whose coverage of the event can be found here.
Joe put forward two key points in his presentation:
- Most companies treat the brand as if it is something separate from the business strategy, the company organization and other business concerns. It is not.
- Most Western marketers are fixated on the 15 percent of the world that is wealthy and ignore the opportunities offered by focusing on the other 85 percent. Joe cited the example of Nokia, which dumbed-down its smart phones to gain access to the mass markets of India and China.
I thought of Joe’s first premise while I was reading AdAge this Monday. In an article provocatively titled “What Crispin’s Lauded BK Work Doesn’t Do: Gain Ground On McD’s,” Jeremy Mullman and Emily Bryson York describe the many creative triumphs of ad agency Crispin Porter & Bogusky on behalf of Burger King over the last five years. And while this work may have contributed to Burger King increasing its market share (in the burger domain) by 0.8 percent since 2003, Mullman and York point out that McDonald’s has gained three full share points during the same interval.
There is no doubt in my mind that the Crispin Porter & Bogusky campaigns have been effective at gaining attention, creating a positive buzz, and revitalizing the Burger King brand. But what about the business? Was it aligned with the brand strategy? Did the brand experience live up to customer expectations?
The success of McDonald’s (which the article refers to as the “runaway train” in the fast food category) is clearly derived from the alignment of both business and marketing strategy. McDonald’s has renewed its focus on consumer insights, the customer experience in its restaurants, and operations. In addition, the company has aligned franchisees and vendors to work with the company toward a common goal. The company could not have capitalized so successfully on these endeavors without effective marketing and advertising, but McDonald’s did not rely on marketing strategy alone to fuel growth. (For more on the growth of McDonald’s see my recent BrandZ Top 100 post).
Of course, maybe Burger King’s business is just fine. Maybe it is the strategy that is wrong. According to the AdAge article, the strategy of targeting its hard-core fans with more expensive, beef-heavy items might have been the right strategy at the wrong time. Perhaps that’s true. But I can’t help thinking that Burger King ignored one of the basic rules of marketing: Double Jeopardy. Stated simply, this empirical generalization is as follows: the greater a brand’s penetration, the higher its repeat purchase rates. The implication for mass-market brands is that they should spread their nets wide. Focusing on a few heavy users only works to drive growth if their tastes are aligned with the rest of consumers in the category. Of course, you also need an appealing proposition, and right now the value positioning of McDonald’s is appealing to a lot of people.
Building a truly successful brand is not easy. It takes far more than a great advertising campaign. It requires the alignment of both business and brand strategy. Get both right and the financial results will follow, even in a recession. Recession is an acid test for companies and brands. My bet is that the companies that really believe in their brands and do not compromise them will be the ones that win in the long run.
So what do you think? Why is it so difficult to align brand and business strategy? Is it simply that many in senior management just do not understand what a brand is?
(2 votes, average: 4.5 out of 5)
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June 25th, 2009 at 9:44 am
Great article! As a marketer, I struggle with the change that is happening in todays market. Here are some of the issues that make it hard to align branding with business strategy:
1. Lack of integrated planning and accountability on marketing’s part. That is, marketing is not treated as an integrated business entity. It is a silo that has focused on promotion while other parts of the organization deals with the product, price, and place (4 Ps of marketing).
2. Many organizations base marketing/branding decisions on bias, emotion, and “common beliefs” rather than on data. Its like many marketers would rather use intuition/gut feel than actually talking to customers.
3. Old marketing was based on controlling information and telling people how great the product is. In order for organizations to align branding and business strategy, they have to learn to listen to the customers and give up on telling people. The Internet makes it easy for people to access information, so why do corporations waste money by trying to spin? With many marketers using the old way of marketing, it causes a gap between the brand and the customers.
4. The new marketing is about quality customer service (do customers actually get a good feeling when they use your product/service and it meets a customer need?), maintaining a conversation with your customers (are you showing up where your customers are and engaging with them?), and listening to the customers (are you actually using their feedback to better improve the product/service?).
This list is just off the top of my head, others may want to add to this list.
June 25th, 2009 at 9:58 am
Hi Jenn, thanks for starting the debate. Much appreciated.
Do you really feel that many organizations base their decisions on gut feel rather than on data? I often hear the opposite, with people saying marketers are too confined by the numbers and not brave enough. I guess it just points to the fact that like so many things in business it is all a matter of balance: lurch too far in the gut direction and the risk of a wrong call rises significantly, lurch too far the other way and all you get is average.
June 25th, 2009 at 1:04 pm
Nigel, excellent article and Jenn, I’m with you on lack of integration. “New Marketing” seems much more experiential, more one to one. As far as the brand - business connection, I’d say that good branding should be a communication of your overall strategy, as you mention Nigel, McD is all about value right now. With that being the case, pretty important to actually have a clearly defined strategy, that you can share widely, both internally and externally.
June 25th, 2009 at 1:15 pm
Hi Nigel,
In my experience, I find that not a lot of marketers can prove that their advertising is effective. Marketing ROI or accountability is one topic that many executives are trying to ”get.” Another interesting read is Cuno and Shermer’s book: Prove it Before you Promote it: How to Take the Guesswork Out of Marketing (http://ca.wiley.com/WileyCDA/WileyTitle/productCd-0470381183.html). I thought it was a very interesting read.
It is a balance with data. There is analysis paralysis if you have too much data (e.g. Barry Schwartz, The Paradox of Choice), but there is also not interpreting the data correctly because of biases and personal emotion. I do find that marketing is a little too focused on being creative. They have lost the purpose of what marketing is supposed to do.
June 25th, 2009 at 1:28 pm
Hi Keith, a poorly communicated strategy is as bad as no strategy, right? If your staff can’t say what the brand stands for then you have a BIG problem.
Jenn, I like the sound of the book already. It all comes back to defining what success looks like. If you know that then you can figure out how to measure it. Your comment reminds me of someone I used to work with. He said, “Creativity is really about problem solving.” The challenge is to get people to see the same old brand in a way that appear fresh and new without losing its original values.
June 26th, 2009 at 8:10 am
Some of these companies have done great work defining their brand (and some of them truly know what it is)and aligning it with customer desires and even in integrating it into their strategies at the Executive level. But taking all that strategy and executing it completely through the organization is extremely difficult work that is often downplayed by Executives. Keeping it consistent requires complete focus and dealing with considerable push-back in a constructive way. Two out of three just doesn’t cut it. It gets you .8% instead of 3%.
PS I was referred here from acleareye.com and will have to keep looking in at your site too.
June 26th, 2009 at 9:43 am
Hi Colin, yes, I think you are right. Saying it once is not enough. You have to clearly define what success looks like, how things will be different and what it means for each person involved. Of course, if you do that you will also have a good analysis spec. for determining ROI. Thanks for the comment and the recommendation. Cheers, Nigel
June 27th, 2009 at 12:32 am
Dear All
these days we know marketing in tactical form only , its promotions n promotions . We have ignored the remaining Ps , because its short term results that we focus on , no matter how it affects the brand value in the long run .
Who is to be blamed -we marketers , because we are not exerting the Pressure with the organization to justify our outputs
June 30th, 2009 at 10:08 am
Great article, Nigel. I come across this problem all the time. My experience is with smaller, primarily B2B brands, and they all seem to have a touch of “get-me-one-of-those”-itis. The leadership team gets excited by different ideas they (or their spouses, friends, etc.) see in, usually, consumer advertising, and they want THAT – whether it has any connection to the business strategy or not.
As marketers, we have to continually be able to bring the discussion back to overarching business goals while also being able to show them that we can still do “cool” things. Let’s choose the concepts that will actually add value to our business, though!
June 30th, 2009 at 10:18 am
Hi Diveya and Marla, thanks for the comments.
I think it is particularly hard for medium sized B2B brands to stay focused and in touch with client needs. An entrepreneur is usually in direct contact with their customers on a regular basis. They know exactly what their customers say they want, the trick is to figure out how to satisfy those needs at a profit. A big corporation usually has tools to make sure that its staff understand what the brand stands for to close the gap between senior management and customers. Medium sized companies are often in a limbo zone in between the two. Gut feel tends to dominate sound strategy.
July 1st, 2009 at 7:42 am
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