Branding

“When you expand your brand, you weaken your brand”

laura visual hammer

Laura Ries is a leading marketing strategist, bestselling author and television personality. In 1994, Laura founded Ries & Ries, a consulting firm with her father and partner Al Ries, the legendary Positioning-pioneer. Together they consult with companies around the world on brand strategy. With Al, Laura is the co-author of five books on branding that have been worldwide bestsellers. Her first solo book was Visual Hammer. Her latest book Battlecry was published in September 2015. In this interview she speaks to Vivek Kaul.


In the foreword to your new book Battlecry, Al Ries writes that “over time, companies drift sideways. They get into many different businesses and lose their focus.” Can you give us a few examples.

There are so many, but here are a few. Yahoo was the leading search engine, at one time worth $120 billion on the stock market. Then Yahoo turned itself into a “portal” by adding a host of new services. Yahoo Mail, Yahoo Games, Yahoo Groups, Yahoo Pager, etc.
Those additions allowed Google to move in and dominate the search market. Today, Yahoo is worth only $29 billion on the stock market and most of that value is due to its investment in Alibaba stock. (Google is worth $428 billion on the stock market.)

Any other examples?

Dell was once the largest maker of personal computers with 17 percent of the global market. Today, Dell has fallen to third place with 13 percent. Dell stock once sold for $60 a share. Two years ago, was Dell bought out by a private-equity firm for $13.75 a share.

What caused Dell to collapse?

Expansion. Dell once sold computer direct to businesses. That was it. Then Dell started selling to the consumer market, including such products as television sets, digital audio players, computer printers and smartphones. The company also made many acquisitions in such areas as storage, services, data centers, security, virtualization, networking and software. In the three years from 2009 to 2012, Dell spent $12.7 billion on 18 acquisitions.

IBM, General Electric and a host of other companies have tried to expand their businesses by introducing many new products and services. Today, these and other companies have gotten smaller, not larger.

Why does this happen?

Because when you expand your brand, you weaken your brand.      

How do you correct this mistake at the branding level?

First of all, a company should narrow its focus so it stands for something. Dell once stood for “Personal computers sold direct to business.” What does Dell stand for today? Nothing. As a result, Dell has to sell its products and services based on low prices.

Years ago, Dell had a powerful slogan. “Direct from Dell,” a slogan that implied that companies could save money by buying their PCs from Dell’s website. Furthermore, the slogan was memorable because it used “alliteration,” one of the five techniques mentioned in my Battlecry book that can increase memorability.

What is Dell’s slogan today?

“Better technology is better business.” That’s a generic slogan that could apply to any company.

Why is a narrow product line better than a broad product line? Because a narrow product line is needed to build a powerful brand.

Can you give us an example?

Take Subaru, a Japanese automobile brand. In the American market in the year 1993, Subaru sold 104,179 vehicles, but the company lost $250 million on sales of $1.5 billion. So a new president was hired. The new president found that 48 percent of Subaru’s sales were four-wheel-drive vehicles and 52 percent were two-wheel-drive vehicles.

So what did he do? He decided to focus on four-wheel-drive vehicles only. Sales declined the first two years, but then they took off. From 104,179 vehicles in 1993 to 515,693 vehicles in 2014, an increase of 393 percent. (The total automobile market in those 21 years increased only 19 percent.) In 1993, Subaru was the ninth-largest Japanese vehicle brand in the American market. Today, Subaru is the fourth largest, trailing only the big three: Toyota, Honda and Nissan.

So what is the moral of the story here?

It’s hard to find cases like Subaru because most brands are taken in the opposite direction. Companies expand their brands; they don’t contract them. That’s logical, but that’s not good marketing strategy.

Why do companies like formal words in their marketing campaigns? You recommend colloquial expressions. Why? A few examples would be great.

Formal words like “motion picture” sound important. But consumers invariably use shorter words like “movies.” Or “TV” instead of “television.” Or “SUV” instead of “sport-utility vehicle.”

One of the most-famous charities in America, organized by the United States Marine Corps, collects toys for children at Christmas time. Instead of calling the charity “Toys for Children,” they called the charity “Toys for Tots,” a colloquial expression that is also alliterative.

You also talk a lot about abstract words. Can you tell us a little bit about that and how they hurt a marketing campaign?

You have two brains. A left brain which handles words and a right brain which handles visuals. The right brain is also the site of your emotions. There are also two kinds of words, abstract words and specific words. “George Clooney” are specific words. “World-famous movie star” are abstract words.

So?

Both abstract and specific words are processed in the left brain. But specific words like George Clooney also conjure up images in your right brain, the emotional half of your brain. Emotion is the biggest, single, memory stimulant. What events do you remember the most? The day you graduated from college. The day you got married. The day you had your automobile accident. These “emotional” events are also visual. You can never forget them. That’s why slogans using specific words are much more memorable than slogans using abstract words.

Can you give us an example?

“The ultimate driving machine” made BMW the world’s largest luxury-vehicle brand. BMW could have said “The ultimate performance machine,” a broader and more inclusive slogan.

But “driving” is a word that can be visualized. (Two hands behind the wheel.) But “performance” cannot.               

What is the difference between slogans that consumers remember and the ones that they don’t? How is related to the concept of Battlecry?

Two things make a slogan memorable: Money and memory-enhancing techniques. If you have enough money (and enough time), you can make any slogan memorable. “Just do it,” the Nike slogan, is memorable because Nike has spent billions of dollars to promote it over the past 27 years.

But most companies don’t have the resources of Nike. Nor do they have the time. What can they do?

They need to consider one of these five memory-enhancing techniques.

(1) Rhyme. Folgers became the No.1 coffee brand in America by focusing on breakfast with the slogan: “The best part of waking up is Folgers in your cup.”

(2) Alliteration. M&Ms became a leading candy brand by focusing on a feature of the brand with the slogan: “Melts in your mouth. Not in your hands.”

(3) Repetition. Federal Express, an air-cargo carrier, entered the American market to compete with the market leader, Emery Air Freight. FedEx (the current name of the company) decided to focus on overnight delivery. They could have said, “The overnight carrier.”

Instead, they used repetition to create memorability. “When it absolutely, positively has to be there overnight.” Within a few years, FedEx became the leader in the category.

(4) Reversal. Secret became the leading antiperspirant/deodorant for women with a simple reversal slogan: “Strong enough for a man, but made for a woman.”

(5) Double-entendre. This is perhaps the best way to create a memorable slogan. The two meanings contained in a single slogan oscillate back and forth in your mind, thereby creating memorability.

Can you give us an example?

“A diamond is forever” is a typical example. A diamond (the hardest substance known to man) can presumably last forever. A love symbolized by a diamond can also last forever, too.

You write: “Apple is an enormously successful company…But it wasn’t because of abstractions like “Designed in California”.” What is it that you are trying to say here?

Even successful companies can fall into the trap of using grandiose, abstract words instead of down-to-earth specific words. Apple’s “Designed in California” campaign had exceptionally-low viewer ratings and was discontinued within a year.

Three successful brands made Apple the world’s most-valuable company. And they all used specific words or concepts in their introductions.

The iPod: “A thousand songs in your pocket.”

The iPhone: “The first touchscreen smartphone.”

The iPad: “The first tablet computer.”

Yet when Apple introduced the Apple watch, the company did not try to position the brand with specific words on concepts. Many people, including me, think the Apple watch will not turn out to be nearly as successful as the three brands that came before it.  A sign of trouble ahead: Apple regularly provides data on iPhone sales, but refuses to disclose Apple watch sales.

Why are companies in love with the word “innovation”?

“Business has only two functions,” wrote Peter Drucker, “Marketing and innovation.”

Innovation, like many other abstract words, is both important and useless. Important in business and useless in marketing.

Inside a company, management should focus on innovation. Long-term, a company cannot be successful unless it is innovative. When it communicates to prospects on the outside, however, it should forget about innovation. That’s inside-out thinking. Instead, companies should practice “outside-in thinking.” Start with the mind of the consumer and try to fill an open hole in the mind. “Innovation” is a typical abstract word that has no real meaning for consumers. Instead, a company should look at its innovative product and try to express that innovation in specific words like “The first touchscreen smartphone.”

But that doesn’t seem to be happening…

Many, many companies, however, continue to try to pre-empt “innovation” in their marketing slogans. Some recent examples:
ASUS: Inspiring innovation. Persistent perfection.

Bosch: We bring innovation.

Firestone: A tradition of innovation.

Ford: Driving American innovation.

NEC: Empowered by innovation.

Nissan: Innovation that excites.

Siemens: Global network of innovation.

Toshiba: Leading innovation.
It’s highly unlikely that consumers will associate the word “innovation” with any of these companies. They will, however, associate “innovation” with Apple because Apple had launched innovative products with specific slogans.

How can a slogan provide protection from future competition?

A slogan can build a brand. And a strong brand is the best protection a company can have from future competition.

How do you build a brand that will last a lifetime?

There are four critical steps.

Step one: Be first in a new category. Coca-Cola, introduced in 1886, was the first cola. It’s still the leading cola today, 129 years later.

Step two: (Which isn’t a step at all, but it’s the most important thing you can do.) Don’t line-extend the brand. Keep the brand focused on its category. If you want to introduce another product or service, use a different brand name.

Step three: Create a slogan that communicates your leadership. Coca-Cola is widely known as “The real thing.” That’s the slogan the brand should be using because it communicates the fact that Coca-Cola is the original, the authentic cola.

Step four: Hammer the slogan with visual hammer. In Coca-Cola’s case, it’s the contour bottle which the brand has been using extensively.

You just talked about a visual hammer. Can you explain that in a little more detail?

The objective of a marketing campaign is to “own a word in the mind.” But the best way to own a word is to find a visual that can hammer that word in the mind. Marlboro was the first cigarette targeted to men only. But to drive that idea in the mind, Marlboro used a cowboy. The cowboy is the visual hammer that made Marlboro the world’s best-selling cigarette.

Corona beer is the only Mexican brand that has made Interbrand’s annual list of the 100 most-valuable brands in the world. How did Corona achieve this? With a lime. When Corona was introduced in the American market, the importers insisted that the beer be served with a lime on top of the bottle. (America is a lemon country. Mexico is a lime country.) The lime communicated the fact that Corona was the authentic Mexican beer.

The interview originally appeared in the Forbes India magazine             

Kingfisher debacle to United Spirits row: Charting out the great fall of Vijay Mallya

vijay-mallya1Vivek Kaul

Vijay Mallya is too much of a stiff upper lip to have ever read the Urdu poet Mirza Ghalib. But if he has, he would know, that one of Ghalib’s most famous couplets, fits the current situation that Mallya is in, very well.
Sometime in the nineteenth century Ghalib wrote:

Nikalna khuld se aadam ka soonte aaye hain lekin
Bahot be-aabru hokar tere kooche se hum nikle

(We have heard about the dismissal of Adam from Heaven,
With more humiliation, I left the street on which you live…

Source of translation: https://medium.com/@herahussain/poetry-in-the-east-a-journey-of-discovery-of-urdu-poetry-6197767f41b4)

The board of United Spirits Ltd, India’s largest liquor company, has asked Mallya to step down as the Chairman of the company. The liquor baron may have been involved in financial irregularities as per an internal probe carried out by the company.
In a press release dated April 25, 2015, the company said: “The inquiry covered various matters, including certain doubtful receivables, advances and deposits. The inquiry revealed that between 2010 and 2013, funds involved in many of these transactions were diverted from the Company and/or its subsidiaries to certain UB Group companies, including in particular, Kingfisher Airlines Limited…The inquiry also suggests that the manner in which certain transactions were conducted, prima facie, indicates various improprieties and legal violations.”
Mallya in true Indian style has refused to bow out. ““All I wish to say is that I intend to continue as chairman of USL in the normal manner. This includes chairing monthly operating review meetings and board meetings,” he told the Mint newspaper.
Where does this confidence come from? Mallya personally holds 0.01% shares in United Spirits. United Breweries Holdings Ltd (controlled by Mallya) holds 2.90%. Other investment companies controlled by Mallya own around another 1.18%. So Mallya’s holding in United Spirits is down to a little over 4%.
Diageo, the British company to which Mallya sold United Spirits, owns 54.78% of United Spirits. Mallya’s confidence stems from the fact that while selling United Spirits, Mallya and Diageo entered into an agreement, as per which Diageo has to endorse Mallya as the Chairman of United Spirits. This, till Mallya has a stake in United Spirits.
Given this, the stage is set out for a messy legal battle, which will continue for sometime to come. Nevertheless, the question is how did Mallya end up in the mess that he has? One reason was that he took his flamboyant style a little too seriously and ended up starting Kingfisher Airlines in 2005.
Airlines are huge cash guzzlers. As Warren Buffett has said in the past: “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it.”
Kingfisher Airlines became Mallya’s bottomless pit. Mallya was in a rush to buy planes. He had plans of buying one Airbus A-320 every month until March 2012. All this needed a lot of money. Mallya loaded up on debt from public sector banks. At the same time, Mallya being Mallya could not have run a low cost airline. In a October 2012 article, Tehalka quotes an aviation sector CEO as saying: “Food served in KFA[Kingfisher Airlines], recalls an aviation sector CEO, was about Rs 700-800 per passenger compared to Rs 300 of Jet’s.”
Other than this Mallya was in a hurry to fly Kingfisher to international destinations. A domestic airline was allowed to do that only once it had completed five years of operation. That meant that Kingfisher would be allowed to fly abroad only by 2010. Mallya did not have the patience to wait for that long. He bought Air Deccan in 2007 to get around the regulation. He ended up overpaying for the low cost airline.
Further, he rebranded Air Deccan as Kingfisher Red. By doing this he diluted the premier positioning that Kingfisher Airlines had acquired in the minds of the consumer. The philosophy required to run a premium brand is totally different in comparison to the philosophy required to run a low cost brand. Hence, Mallya buying Air Deccan was mistake. And then changing its name to Kingfisher Red was an even bigger mistake.
So in the end this did not work and Mallya decided to close down Kingfisher Red. He explained it by saying that “We are doing away with Kingfisher Red, we do not want to compete in the low-cost segment. We cannot continue to fly and make losses, but we have to be judicious to give choice to our customers.”
It is very difficult to run a full-service airline as well as a low cost airline at the same time. The basic philosophy required in running these two kind of careers is completely different from one another. The full service Kingfisher also soon ran into trouble leaving Mallya with a lot of debt. He had got terrible publicity for not paying the salaries of employees of Kingfisher Airlines.
Other than running the liquor and the airline business, Mallya also has interests in real estate. Over and above this, he also indulged in expensive hobbies by buying a formula one and an IPL cricket team. Running an airline is a full time business and can’t be done in a part-time sort of way which Mallya did.
The best Indian companies in the last few decades have made money by concentrating on one line of business. Airtel made money in telecom. It did not make money trying to sell us insurance and mutual funds. The same stands true about DLF. Tata, Birla and Ambani, all lost money in the retail business. Businesses over the years have become more complicated. And just because a promoter has been good at one particular business doesn’t mean it will be good at another totally unrelated business. Mallya did the same with his main liquor business, which he is now losing control of.
Over the last few years, Mallya has been battling the banks which have been going after his assets, for all the debt that is unpaid. To conclude, Mallya has always been too busy living his flamboyant lifestyle and that seems to have caught up with his businesses in the end.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The column originally appeared on www.Firstpost.com on Apr 27, 2015

Why all deodrant ads commodify women and diamond ads don’t

diamirza-wildstone

Vivek Kaul

This is another column which is different from the usual stuff that I write. Over the last few years I have been observing a few advertisements that tend to commodify women and few which don’t and have been wanting to understand, why things are the way they are. This column is a result of that.
Take the case of deodorant advertisements. These ads are like item numbers in films. They titillate and present women as one dimensional objects of sexual desire.
The only difference is that at the end of the deodorant advertisement the hero usually gets the girl because he has had the foresight to spray the deodorant on his well built body. The woman gets attracted by the smell of the deodorant and is hooked on to the guy.
One such advertisement was that of Wild Stone deodorant which featured the out of work but still stunningly beautiful actress Dia Mirza. As the formula for such advertisements goes, Mirza is seen getting attracted to a well sculpted male model who has applied the Wild Stone deodorant.
In real life it would be foolish to think that beautiful women are attracted to men on the basis of just a brand of a deodorant. But this ad, like most deodorant ads, is not targeted towards women. It is targeted towards men.
As brand guru Martin Lindstrom writes in Brandwashed –Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy: “in general women tend to more easily persuaded by ads that are more romantic than sexual… Men, on the other hand, respond to sexual innuendo and women in bikini.”
In fact when it comes to deodorants a lot of research and thinking has been done to arrive at these clichéd advertisements. As Lindstrom told me in an interview when I asked him what the ultimate male fantasy was: “A man sitting in a hot-top-spa with two naked ladies on each side – popping a bottle of Champagne. Unilever, the manufacturer of AXE discovered this very observation based on thousands of interviews and observations of men worldwide – realising that this very fantasy indeed seems global – and today explaining why AXE uses this very imagination as the foundation for all their ads.”
And that explains to a large extent why all deodorant advertisements are one and the same. Geoffrey Miller, a professor of evolutionary psychology has an explanation for this in his book Spent –Sex, Evolution, and Consumer Behaviour. He writes “Biology offers an answer. Humans evolved in small social groups in which image and status were all-important, not only for survival but for attracting mates, impressing friends, and rearing children. Many products are products are signals first and material objects later.”
Deodorant ads work on this evolutionary trait and tend to project the smell of a deodorant as a sexual mating signal from the male to the female. This is primarily because biologically the best strategy for a man is to be promiscuous and try and attract as many women as possible. “The more women with which he mates, the greater number of children containing his genes are possible… Thus, a man’s biological criteria can be simple: 1) she must be healthy; 2) she must be young; 3) she must be receptive; 4) and she must be impregnable,” writes Richard F. Taflinger in You and Me, Babe: Sex and Advertising.
While a man may want to be promiscuous it may not be always possible for him to do so because of societal pressures. But even with that a subconscious need may still remain. And that is what marketers who commission sexually loaded ads, play on. A great example is the chocolate man ad of Axe Body Spray, which had multiple women swooning over one man.
The other product that has taken on to sexually loaded advertising is the male ganji. A typical ad shows a guy wearing a ganji (these days chances are that this could be a filmstar) always getting the girl in the end. What is true about ganjis is also true about the male underwear.
An ad that went overboard with sexual innuendo was the Amul Macho underwear ye to bada toing hai. The ad showed a woman, who was probably newly married, going to the village river to wash her husband’s underwear. And in the process the other women around her were shown to get sexually turned on. The ad again played on the promiscuous nature of men even though it did not feature a man and ended up demeaning women through its one dimensional projection.
In fact automobiles are another area which tend to get sexually loaded advertising. This phenomenon is still to take off in India where most car advertising tends to concentrate on the family and if not the family, then the double income no kid couple.
But in the developed countries this mode of advertising has been around for a while. Lindstrom points to a Volvo ad showing a silhouette of a Volvo’s driver’s seat with its parking brake extending in the air – precisely like an erect penis – over the tagline, “We’re just as excited as you are”.
One thing that is common to this track of advertising is that they tend to project women as bimbos. As Madhukar Sabnavis of Ogilvy & Mather puts it “Do Axe commercials project women as bimbos, or are they a light-hearted take on the man-woman relationship? I would prefer to think it’s the latter…The judgement is subjective and qualitative, and so it cannot be cast in stone.” While the advertising industry might say that they are not projecting a stereotype, the evidence is clearly to the contrary.
But what about women? Why don’t they take to direct sexual advertising and tend to be swayed more by romantic advertising?
A few years back Tanishq released an advertisement featuring Adil Hussain and Tisca Chopra which had all the settings of romance—a couple in a restaurant with the candles lit, saxophone playing in the background and a man getting ready to gift a solitaire to his wife of ten years.
So why do these kind of advertisements work well with women? As Taflinger puts it “Women…have a far greater physical, physiological and temporal stake in producing children. This means she must be highly selective in her choice of men if she wishes to produce the highest quality children in her reproductive lifetime. If she selects just any man that comes along, she could waste all that time and energy that pregnancy and rearing require on a possibly weak or nonviable child. She thus aims her biological criteria at getting the best possible man. The sex act, and his participation, being so brief, doesn’t have to be of any particular interest to her. What is important is the quality of genes he brings and the help, if any, she will have while carrying, bearing and rearing the children.”
Now that does not mean that the sexual desires are strong only in men. As Taflinger explains “She also has sexual desires as strong as a man’s. However, she will often subordinate that desire. That is, she may desire a physically attractive man, but she will not actually have sex with him until he has satisfied more than physical criteria.”
Hence, women are more careful than men when it comes to entire ritual of mating. But that does not mean they don’t send out sexual signals. They do that, but not in a way as direct as men. The entire cosmetics business is built on this insight. As Miller puts it: “The whole cosmetics business is focused on helping women appear younger, more fertile, healthier, and thus better able to bear offspring. The evolutionary background of cosmetics is that in most primate species,sexual selection focuses very heavily on facial appearance. In assessing women’s ages, men apparently evolved to pay close attention to facial and bodily cues of being in the young-adult phase of peak fertility. So women could evolve to fake their fertility all the way from around age twelve to around age twelve to around age sixty.”
And how cosmetics help? “One way of faking fertility across a broader age range is to apply cosmetics that amplify facial fertility cues that peak in young adulthood, such as plump lips, large eyes, prominent cheekbones, smooth and radiant complexion, thick and glossy head hair, and minimal facial hair,’ writes Miller.
This explains why you will see more deodorant ads stereotyping women in the time to come. But you will never see a diamond ad doing the same.

The column originally appeared on The Daily Reckoning on Mar 11, 2015

Bill Gates’ favourite business book tells us why Tata Nano “really” failed

TATA NANOVivek Kaul

In July this year Bill Gates wrote a blog. He titled it The Best Business Book I’ve Ever Read. As he wrote “Not long after I first met Warren Buffett back in 1991, I asked him to recommend his favorite book about business. He didn’t miss a beat: “It’s Business Adventures, by John Brooks,” he said. “I’ll send you my copy.” I was intrigued: I had never heard of Business Adventures or John Brooks.” Gates got a copy of the book from Buffett. “Today, more than two decades after Warren lent it to me—and more than four decades after it was first published—Business Adventures remains the best business book I’ve ever read. John Brooks is still my favorite business writer. (And Warren, if you’re reading this, I still have your copy),” Gates added. The book is essentially a collection of 12 long articles (I don’t know what else to call them) that Brooks wrote for the New Yorker magazine, where he used to work. A chapter that should be of interest to Indian readers is The Fate of Edsel. A reading of this chapter clearly tells us why Tata Nano, the most hyped Indian car ever, has failed to live up to its hype. But before we get to that, here is a brief summary of the chapter. In 1955, the Ford Motor Company decided to produce a new car, which would be priced in the medium range of $2,400 to $4,000. The car was designed more or less as was the fashion of the day. It was long, wide, lavishly decorated with chrome, had a lot of gadgets and was equipped with engines which could really rustle up some serious power. The car was called the Edsel. It was named after Edsel Ford, the only son of Henry Ford who started the Ford Motor Company. In 1943, Edsel Ford had died at a young age of 49, of stomach cancer. In fact, even before the Edsel car was launched there was a lot of hype around it. As Brooks writes “In September 1957, the Ford Company put its new car, the Edsel, on the market, to the accompaniment of more fanfare than had attended the arrival of any other new car since the same company’s Model A. A model brought out thirty years earlier.” The company had already spent $250 million on the car, before it was launched. The Business Week called it more costly than any other consumer product in history. Given this huge cost, Ford had to sell around 200,000 Edsels in the first year, if it had to get its investment back. Nevertheless, two years, two months and fifteen days later, it had only sold 109,446 Edsels. This included cars bought by Ford executives, dealers, salesman, workers etc. The number amounted to less than 1% of the cars sold in America during that period. On November 19, 1959, it pulled the plug on the car. Estimates suggested that Ford lost around $350 million on the car. So what went wrong? Some of the feedback from trade publications was negative. Over and above that, some of the cars that were sent out initially were badly made. As Brooks writes “Automotive News reported that in general the earliest Edsels suffered from poor paint, inferior sheet metal, and faulty accessories, and quoted the lament of a dealer about one of the first Edsel convertibles he received: “The top was badly set, doors cockeyed, springs sagged.”” Some individuals who worked on making and launching the car liked to believe in later that it was the because of the Sputnik, the first artificial space satellite launched by the Soviets that led to the car not selling. As Brooks puts it “October 4th[1957], the day the first Soviet Sputnik went into orbit, shattering the myth of American technical pre-eminence and precipitating a public revulsion against Detroit’s fancier baubles.” Detroit was the city were the biggest motor companies in the United States were head-quartered back then. While these could have been reasons for the car not selling, the real reason for the car not selling was the hype that accompanied it. As Brooks writes “It was agreed that the safest way to tread the tightrope between overplaying and underplaying the Edsel would be to say nothing about the car as a whole but to reveal its individual charms a little at a time—a sort of automotive strip tease…The Ford Company had built up an overwhelming head of public interest in the Edsel, causing its arrival to be anticipated and the car itself to be gawked at with more eagerness than had ever greeted any automobile before it.” C Gayle Warnock, director of public relations of the Edsel division of Ford, shares an interesting example, which provides the real reason behind the failure of the Edsel car. In 1956, a senior official working on the Edsel launch (in fact it wasn’t called the Edsel then, it was just the E-Car) gave a talk about it in Portland, Oregon. Warnock was aiming for some coverage regarding the event in the local press. But what he got was something he had not expected. The story got picked up by wire services and was splashed all across the country. As Warnock recounts in the chapter “Clippings [of the media coverage] came in by the bushel. Right then I realized the trouble we might be headed for. The public was getting to be hysterical to see our car, figuring it was going to be some kind of dream car—like nothing they’d ever seen. I said… “When they find out it’s got four wheels and one engine, just like the next car, they’re liable to be disappointed.”” And this is precisely the reason why the Edsel flopped. The hype was so much that the public expected something that was totally out of the world. But what Ford was basically giving them in the rephrased words of Larry Doyle, the head of sales at the Edsel division, “exactly the car that they had been buying for several years.” As Doyle put it “We gave it to them and they couldn’t take it.” Further, it did not help that the first lot of cars was not properly manufactured. “Within a few weeks after the Edsel was introduced, its pitfalls were the talk of the land,” writes Brooks. Now replace the word Edsel with Nano and the situation stays more or less the same. The hype around the car was huge. When the car was launched in 2009, the entire world media was in Delhi for the launch. In fact, before the car was launched the rating agency Crisil said that the car could expand the Indian car market by 65%. People who had cars were already worried about the traffic on the roads getting worse than it already was, because of the Nano. Before the car was launched in 2009, prices in the used car market fell by 25-30%, given Nano’s expected price point of Rs 1 lakh. Nonetheless, Nano could not live up to the hype. In a May 2014 newsreport, the Business Standard pointed out that “Launched in 2009,Nano sales between 2010-11 and 2012-13 constituted 23-24 per cent of Tata Motors’ total sales. But Nano sales declined dramatically after peaking to 74,527 in 2011-12. The numbers came down by more than 70 per cent in two years to 21,129 in 2013-14. Tata Motors has set up a facility at Sanand in Gujarat to make 250,000 Nanos a year.” So, the car sold nowhere near the numbers it was expected to. What did not help was that when the car actually started hitting the market in 2010, some units caught fire. After all the hoopla around the Nano, this wasn’t what the public was ready to accept. Brooks’ sentence written for Edsel can be re-written for Nano as well: “After the Nano was introduced, its pitfalls were the talk of the land.” Further, the hype around the car was so huge that the people were expecting something totally out of this world. They did not know what they wanted, but they did not want, what they got. The question that remains is how much could you expect out of a car which was supposed to be sold at Rs 1 lakh? The article originally appeared on www.FirstBiz.com on Nov 18, 2014

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

"Companies are Throwing Money at Social Media"

rohit deshpande

Rohit Deshpandé is Sebastian S. Kresge Professor of Marketing at Harvard Business School, where he currently teaches in the Owner/President Management Program and in other executive education offerings. He has also taught global branding, international marketing. In this interview he talks to Forbes India on various aspects of branding.

I came across an interesting an interesting article that you wrote for the Forbestitled “Branding Yoga: Good Business or Blasphemy?” Please tell us something about.
I wrote a case study called Branding Yoga. So my comments relate to that project. The first learning objective of the case is to ask the question can anything be branded?. The majority of the students say yes, anything can be branded. But the follow up question is, should everything be branded? And all of a sudden ethical issues and moral issues come up, in debating that question. It is a much more difficult question to answer.
Can you get into a little more detail?
The discussion broadens into this controversy over branding yoga. The particular controversy that got me interested into doing this case is something that I read about in The New York Times. There was a group of Indian Americans who had protested the commercialization of yoga and they said that it amounted to the commercialization of Hinduism. So they drew a parallel between commercialization of yoga and the commercialization of religion.
And how did that they do that?
In order, to make that argument they said that yoga is essentially Hindu and it would not exist if it were not were for Hinduism. This sparked a tremendous controversy that had to do with the history of Hinduism, the history of yoga, which preceded which one, can you teach Yoga without teaching Hinduism or is yoga all about exercise? That is really what fuels the case discussion. So, that is one set of issues that we deal with.
And what is the other set?
The other set of issues that we deal with is that there are two different branding models. One branding model is from Tara Stiles, who is a very successful Yoga teacher in New York. She is American. She is young. She used to be a model and a dancer and did Yoga herself as a way of keeping fit and started teaching her friends. They said there will be other people who will be interested. She made some free YouTube videos on this and they went viral. And then she started a yoga studio. Somewhere along the line, she became the yoga teacher of Deepak Chopra. He took lessons from her. He is a great fan of her brand of yoga and they have a joint venture . They made an iPad app, which has been very successful and even a DVD.
Which is the other model?
The other branding model is from somebody called Bikram Choudhury of Bikram Yoga. Now look at the contrast. Bikram is an American now but he was born in India. He was traditionally schooled and his brand of yoga focusses on the domain called hot yoga. It is extremely regimented and you have to be physically in a great shape to do that. And he has franchises. He has training programmes. He is much more of a yoga teacher training as a way of expanding the franchise, even though both are marketers. She is a much more of a social media type of thing. And both of them are successful. Both have attracted controversy, Bikram probably much more so, despite the fact that he is Indian and more authentic than she is.
What is the point you are trying to make?
Yoga has been very successfully branded, with different branding approaches and what makes it interesting is that in America the majority of yoga teachers don’t make very much money.
They have small studios. They are making a living. But they are not millionaires. Both Stiles and Choudhury have achieved a lot.
The ones who are not making haven’t branded yoga?
They haven’t thought about the branding aspects of yoga at all. I don’t know how it is in India, but this idea of the business of yoga, a lot of people look at it as an oxymoron.
You just talked social media. These days social media marketing is a huge thing. Does it work?
Of course it works. If done well, it works really well. There are a number of case examples of a number of companies that are doing a very good job. But it doesn’t work for everybody. Companies are spending a lot of money on social media. But a lot of it is experimental i.e. they are throwing money at something, and they are really not sure of what works and what does not work. We are at a nascent experimental stage where we are trying to figure this out.
Can you elaborate on that?
There are lots of examples of social media where the companies themselves are not sure whether the money is worth the spent. I am not sure I can isolate a social media disaster as much as companies not knowing whether they spent their money well. I would say 90% of the companies are in that group of not knowing whether they spent the money well.
Can you explain through an example?
It has to do with the appropriate success metric. How do you judge whether your social media campaign work has worked? One of the most popular metrics is the number of likes that you get. I have some colleagues who have done some research on this and they have found that likes do not translate into sales. When you think about it cognitively it doesn’t take a lot of effort to like but it takes a lot of effort, and not to mention money, to buy. Hence, click-throughs and getting sales, that is much much harder to measure.
So what is being done about this?
The companies are trying to figure out whether by spending more money they can get click-through , that is, translate likes into sales. But there are all kinds of other factors that might explain sales and how do you isolate it and so on.
Can you give us an example of a company which has used social media well?
I am developing a case on Dell. And they are considered to be a best practice example of using social media in the business to business space. What works for them is that they have a business model which is direct to consumer rather than going through retail. So they have open channel historically with their customers. They don’t get information on their customers from some sales partners, which means that when something goes wrong, they also find out very very quickly. And they have traditionally done that through their telephone lines. People call on their toll free lines when they have a problem. With the advent of social media, some irritated customers started blogging that they were upset at Dell, there is a problem that happened and so on.
And what did Dell do about it?
Michael Dell, who is the founder, is himself very active in the blog space and when he discovered this he told a team of his people that we should just reach out directly to these customers and fix these issues. When they reached out to fix these issues, the bloggers put blogs saying that here is what the company has done. Effectively, their bloggers were doing their job for them. As you know there is a lot of research that shows that restitution actually gets you a lot more business and than actually the initial sale does. And when the restitution story is being told by a customer it carries even more credibility. That is the story of how Dell got into this space. Now they have a command centre and they keep monitoring what is going on. It has to do with the complaint hotline or the repair hotline or whatever you call it, which is the history of the company. They have now translated this into the social media. They estimate that it has saved them a lot of money and a lot of loss, because of people who would have complained and gone away and scared other people from buying Dell.
Given your experience in the field of marketing and branding, which is the most frequent branding mistake that companies make?
The most frequent branding mistake is to assume that your brand is a logo rather than the personality of your product and company. To assume that its a simply a trademark and therefore it should be managed out of your communications department and maybe your legal department, rather than becoming a part of the overall strategy of the firm. In the research I have done this tends to be particularly true for technology intensive companies where the product is everything and the quality is everything. It is almost like a Dilbert cartoon which stereotypes marketing and says that marketing does not add any value and therefore branding is not very essential and it is all about the quality of the product. Companies in emerging markets are not comfortable with thinking about a brand as anything more than what their marketing people do. It is not seen as a part of the strategy of the firm. A brand is not seen as a relationship with a customer, it is seen as a trademark.
Can you give us an example which doesn’t hold true for whatever you have just said?
I wrote a case on Infosys and they have done an incredible job of making the Infosys brand mean something. Narayana Murthy in some ways represented the brand. The confidence that people had in buying from Infosys came from people who ran the company. The brand stood for more than just IT. The brand stood for the people and since 90% their sales comes from outside India, they actually had to brand India before they could brand Infosys. So there is a whole big story there of how India Inc came to be and what role Infosys played in it.
When brands become successful, the tendency is to extend it. Do line extensions work?
Line extensions do work but they don’t work in all cases. The Kingfisher story is an example of a line extension strategy that did not really work. Yamaha is an example of a line extension strategy that has worked very well. But I think the question is why the line extension? If the reason for the line extension is that you have built a powerful brand and want to milk it, then there is a chance that it won’t work. But if the purpose of the line extension is that it is something that the consumers want, then there is much more likelihood that it will work.
Any other point that should be kept in mind?
Another key part is that what does the brand mean? And does that meaning extend? The question for the Kingfisher management should have been what does the Kingfisher brand mean and how does that meaning translate from beer to airline? There are some brands that transcend the product category, in which case the brand might go across a whole variety of things. There are other brands where their meaning is very rooted in the product category, which is almost like the paradox of success. The brand is successful because people see it as Kingfisher means beer and it can’t mean anything else.
Do celebrity endorsements work?
The research on that is in this area called brand personality. Where the personality of the celebrity is consistent with the personality of the brand, it works. When there is a mismatch, then consumers are cynical and they believe that the only reason this person is speaking is because she or he is being paid for it, and they probably don’t use the brand themselves. I think that is the real issue.
Can you give us an example?
The bad example is the [James] Bond franchise. The BMW introduced a product called z3 through a Bond movie. It was for them a relatively inexpensive convertible car. This made a lot of news because James Bond was a British secret agent who used to drive a British Aston Martin and was now driving a German car. This made for good media. This was a very successful product placement. When that happened, not only BMW but a whole bunch of product companies decided that they would flood the next Bond film with product placements. There was a huge consumer backlash. Consumers were frustrated to the point that it was hurting the Bond movie franchise. People were saying that there is no way that the endorser is personally committed to all these different things but he is using it because he is being paid.
And a good example?
There are several examples of where the brand personality fits. An example of that is the basketball player Michael Jackson advertising Gatorade, which is a sports drink. And it went on for a very very long time.

The interview originally appeared in the Forbes India magazine dated July 10, 2014