Vivek Kaul
The most enduring image to have come out of the Auto Expo 2014 until now has been that of the actress Priyanka Chopra posing sexily on top of the Jaguar Land Rover’s Range Rover LWB, during its launch. The actress even tweeted about it and said “Just unveiled the stunning Land Rover LWB…What a beauty she is-sleek & powerful!check it out.”
The picture got several of my friends on Facebook and Twitter talking about this sports utility vehicle (SUV). The question I asked them was why would anyone want to buy a gas guzzling and difficult to park and manoeuvre SUV ( I meant any SUV here and not just the one that Piggy Chops unveiled).
“She is a real beauty,” said one friend. “SUVs show a passion for design and give the feel of power while driving,” said another.
But there is more to why men love SUVs, than just great design and power.
Geoffrey Miller, a professor of evolutionary psychology at the University of New Mexico in the United States, writes about this in his book Spent – Sex, Evolution, and Consumer Behaviour.
Miller asks “Why would the world’s most intelligent primate buy a Hummer H1 Alpha sport utility vehicle for $139,771? It is not a practical mode of transport. It seats only four, needs fifty one-feet in which to turn around, burns a gallon of gas every ten miles, dawdles from 0 to 60mph in 13.5 seconds and has poor reliability.”
But despite being not so high on performance (or what we Indians like to call kitna deti hai?) and environmentally unfriendly, the male of the human species simply love SUVs. Why is that? “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,” explains Miller.
This tendency of men to send signals through products is referred to as the “peacock syndrome” in reference to the tendency of peacocks displaying their plumage in an effort to impress the peahens or the female of their species. In fact research carried out by Dr Michael Dunn at the University of Wales Institute in Cardiff showed that women rated a man higher if he drove a “fancy motor rather than in an old banger”.
“It appears that the stereotype of women being positively influenced by a man’s status is true and, evolutionarily speaking, this makes sense,” Dunn told www.telegraph.co.uk. In a similar research, researchers at the University of Texas studied this phenomenon and concluded that: “although showy spending is often perceived as wasteful, frivolous and even narcissistic, an evolutionary perspective suggests that blatant displays of resources may serve an important function, namely as a communication strategy designed to gain reproductive rewards.”
Dr Jill Sundie who led this research was very direct when he said “This research suggests that conspicuous products, such as Porsches, can serve the same function for some men that large and brilliant feathers serve for peacocks.”
Evolutionarily, the best strategy for a man is to be promiscuous and attract as many women as he can. As Richard F. Taflinger in You and Me, Babe: Sex and Advertising “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.”
For women things work a little differently. Condoms, birth control pills and other birth prevent measures are relatively recent inventions and given this, historically, women could not be promiscuous like a man could be. This was because sex with a man could result in a pregnancy of nine months. Hence, women needed to be choosy.
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.”
This is something that Dunn of University of Wales in Cardiff agrees with. As he puts it “Females focus on questions of wealth and status because if the male possesses those, that male would be in a better condition to rear healthy offspring.”
And driving an SUV is a clear symbol of that. As Geoffrey Miller writes in The Mating Mind – How Sexual Choice Shaped the Evolution of Human Nature “The metaphor seems apt because SUVs make such a show of their rugged utility, all-terrain capability, enormous power, and absurd size…Their huge size demonstrates the ability to incur a high initial cost, and their large engine demonstrates the ability to incur high running costs due to poor mileage. Although capable of transporting six adults across a mountain range, they are often used for nothing more demanding than driving one’s toddler to and from day-care, through leafy suburbia…Principally, their size is a wealth-indicator.”
Hence, a man driving an SUV sends out the right kind of signal to women.
Of course, men cannot be as promiscuous as they want to be because they live in a society. And in any society there are societal pressures. But even with this, there is subconscious need among men to be promiscuous. Marketers play on this and use women to advertise all kinds of products.
Most deodorant ads run on just one formula, where women swoon over a man after he has applied the deodorant being advertised. In fact, in India even underwear ads have been targeted at the promiscuous nature of men.
Given this, it is not a surprise that Priyanka “Piggy Chops” Chopra was seen posing sexily on top of a Range Rover at the Auto Expo in Delhi yesterday. The idea was to tell the prospective customers that anyone driving this car would attract women as sexy and beautiful as Priyanka Chopra. Some marketing formulas never fail.
The article originally appeared on www.firstbiz.com on February 6, 2014
(Vivek Kaul is a writer. He tweets @kaul_vivek)
Branding
‘By introducing cheaper iPhones, Apple will lose its high end position’
Al Ries is a marketing consultant who coined the term “positioning” and is the author of such marketing classics (with Jack Trout) as The 22 Immutable Laws of Marketing and Positioning: The Battle for Your Mind. He is also the co-founder and chairman of the Atlanta-based consulting firm Ries & Ries with his partner and daughter, Laura Ries. Along with Laura he has written bestsellers like War in the Boardroom and The Origin of Branding. In this interview he speaks to Vivek Kaul on why by introducing a cheaper iPhone, Apple will lose its position at the high end. And conversely, it won’t sell very many inexpensive phones because of competition from Chinese and Taiwanese companies.
Apple has come with a low cost iPhone 5C to appeal to the price conscious consumer. Is it a strategy that is going to work?
Yes and no. The strategy will generate additional sales of the iPhone 5C, but in the long term it will damage the iPhone brand.
You have been of the view that extensions tend to cheapen the brand. Will something like that play out in this case?
Yes, it will definitely cheapen the brand.
Why do you say that?
Here’s what normally happens when a new category develops. Apple pioneered a new category called “touchscreen smartphones” with its iPhone brand. Initially, the new product was a big improvement over existing keyboard smartphones like the BlackBerry. This made the iPhone one of the most successful new products ever launched. At one point, it made Apple the world’s most-valuable company. Then competitors entered the market, especially Samsung. Over time, the two brands (Samsung and iPhone) became quite similar, but consumers preferred the iPhone.
Why?
Because the iPhone is a better brand. Not a better product. The next development, a development that happens to every new category, is that the category divides into two categories. One at the high end and one at the low end. Any brand that tries to both ends of the market is bound to suffer.
Can you give us any examples?
Cadillac once was the largest-selling luxury vehicle in the American market. Then it tried to broaden its market by introducing lower-priced vehicles. Today, Cadillac is not considered in the same category as Lexus, Mercedes-Benz and BMW. These three brands each outsell Cadillac by a wide margin. It won’t happen overnight. But long-term, we believe the same thing will happen to the iPhone. By introducing cheaper iPhones, it will lose its position at the high end. And conversely, it won’t sell very many inexpensive phones because of competition from Chinese and Taiwanese companies.
By launching a cheaper version of the iPhone, Apple seems to have started following Samsung’s strategy of having smart phones at various price points. If it’s a strategy that works for Samsung why can’t it work for Apple? After all Samsung has 31% of the smartphone market and Apple has only 14%.
The smartphone market is only six years old. It’s early on in the development of the category. IBM was the first company to introduce a 16-bit, serious personal computer. For several years, IBM had 50 percent or so of the personal-computer market. But because of line extension, IBM’s market share gradually declined until it was less than 10 percent of the market. And so, IBM threw in the towel and sold its money-losing business to Lenovo. Will the same thing happen to Samsung? Perhaps. But it all depends on how smart the competition becomes. If competitors develop narrowly focused brands at the high end and narrowly-focused brands at the low end, Samsung will be the ultimate loser.
Some analysts are of the view that a cheaper iPhone would cannibalize sales of the expensive models. Would that be the case? And even if that is the case isn’t it better that Apple cannibalizes its own sales rather than let someone else do it?
Certainly some cannibalization will take place. But Apple could have used a better strategy than line extension. It could have introduced a cheaper iPhone with a different brand name. Take Toyota, for example. Rather than introduce an expensive Toyota, the company introduced the Lexus. At one point, Lexus was the largest-selling luxury vehicle in America. Currently it’s the No.3 brand. When a category diverges, it is much better to cover the diverging category with separate brands rather than by line extending the company’s existing brand.
When I interviewed your daughter Laura a few months back she told me very clearly that “long-term, we see Apple as the leader in the high-end smartphone category and Samsung the leader in the “basic” smartphone category. Apple would make a mistake in introducing less-expensive smartphones. That would undermine its position at the high end.” Do you see that playing out now? Or would that be too far fetched a statement to make?
That was an astute statement, but apparently Apple management didn’t take Laura’s advice to keep the brand focused at the high end. A brand needs to stand for something to become successful in today’s competitive environment. What’s an iPhone? Is it a high-end phone or a low-end phone? A brand can be successful at either end of the market but not at both ends.
A growing view seems to suggest that Apple has lost its ability to innovate after the death of Steve Jobs. Would you agree with something like that?
Yes. No brand can appeal to everyone. Steve Jobs famously said there are some customers he doesn’t want. (He was commenting on why Apple wouldn’t introduce a netbook, or inexpensive laptop computer.)
Can you give us other examples where extensions have cheapened the brand?
Motorola introduced a $1,400 cellphone called “StarTAC” that rapidly became a very popular high-end cellphone brand. Then the company introduced cheaper versions of the StarTAC phone which undermined its high-end position. (We worked with Motorola at the time and pleaded with them not to introduce the less-expensive StarTAC phones.) Today, Motorola is just another cellphone brand without much of a position. Mercedes-Benz used to be known as the world’s leading high-end automobile brand. But the company keeps introducing low-end models that undermine its high-end perception. Today, BMW outsells Mercedes-Benz on the global market.
On a slightly different what do you think of Microsoft taking over the telecom business of Nokia. Nokia has lost out on the smart phone market. Will Microsoft’s taking over help them in capturing a greater market share in the smart phone market?
Microsoft would have to create a new smartphone category to kickstart the Nokia brand. (Much like Apple did with the touchscreen smartphone.) But that’s incredibly difficult to do in a category that has had so money spent on research & development. Microsoft is unlikely to profit from its Nokia investment. But there’s a larger point to be made. Every company needs a focus for the same reasons that every brand needs a focus.
How do you explain that in the context of Microsoft?
Microsoft is a “software” company. It should not be trying to get into the hardware business. That unfocuses the company and makes it very difficult to manage. Look at Apple, a company focused on selling hardware only. Sure, the company needs software developers to create its hardware products, but that’s a different matter. Look at Apple’s competitors in the American market. Both Dell and Hewlett-Packard are hardware companies trying to get into software and services. And not very successfully. Last year, Dell’s profit margin was 4.2 percent versus Apple’s 26.7 percent. And last year, Hewlett-Packard lost $12.7 billion.
The interview originally appeared on www.firstpost.com on September 12, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
Fear is the key: What Sushma, Rajiv and i-pill have in common
Vivek Kaul
It’s around midnight as I write this and I am just back from a late dinner with a friend. Before we started to have dinner my friend insisted that I use a hand sanitiser. While I have nothing against people pretending to be clean all the time, but the smell of a hand sanitiser really puts me off and can even make me sneeze.
Given that I refused to use it.
“How can you not use a hand sanitiser before eating?” she asked.
“Well I have washed my hands,” I replied.
“But that’s not enough,” she insisted.
“Why not?” I asked.
“Because a hand sanitiser kills all the germs.”
“What germs?” I asked, ripping into the tandoori chicken.
“Ah. End of conversation. Guess cleanliness isn’t really your thing!” she exclaimed at my ingratitude.
The idea of using hand sanitisers has caught on(especially with women) after the recent global swine flue scare. But does it really help? As brand management expert Martin Lindstrom writes in his latest book Brandwashed – Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy “Neither swine flu nor SARS can be prevented by the use of antibacterial cleansing gels. Both viruses are spread via tiny droplets in the air that are sneezed or coughed by people who are already infected. ”
In fact as Lindstrom told me in an interview “What’s ironic is that none of those products…actually do any better job than soap and water.”
That being the case why are women so in love with hand sanitisers? As Lindstrom puts it in Brandwashed “The idea of an unseen, potentially fatal contagion has driven us into nothing short of an antibacterial mania.”
And companies making hand sanitisers have simply captured this mania as a profitable money making proposition. As Lindstrom told me “The companies have done a extraordinary job in building their brands on the back of the fear created by those global viruses – indicating that we’ll be safe using these brands…The ironic side of the story however is that the life expectancy in Japan is decreasing for the first time in history – why – because the country simply has become too clean – the Japanese have weakened their immune system as a result of overuse of hand sanitising products.”
What this little story tells us is that fear of something happening (or not happening for that matter) is a great selling strategy and you can’t argue with a woman who has made up her mind.
As Lindstrom put it “we’re all hardwired to be seduced by fear – fear is the number one soft button in our brain – it is a survival instinct. Fear is used by most insurance companies and even Colgate who claimed in one ad that they could remove the risk of cancer by the usage of their toothpaste,” said Lindstrom.
The fact that fear is a great selling strategy makes companies build it directly into their advertisements. The advertisement of i-pill, an emergency contraceptive pill, shows a mother telling her daughter “Kyun risk le rahi hai?” when the daughter calls and hints that she has had unprotected sex.
Or take the case of Saffola oil which has run a highly successful campaign over the years on the fear of a heart attack. It used to run an advertisement for years showing a man being wheeled into the operation theatre, with the sound of the ambulance siren in the background (Let me concede I also use Saffola oil for cooking).Fair and Lovely, which claims to be a skin lightening cream, has run on a plank of the fear of rejection for a “dark” girl. This despite protests from several quarters. The advertisement of the health drink Complan is built around the fear that those not having Complan will not grow as tall as those having it.
Almost every insurance company uses fear as a selling strategy. This can vary from the fear of death, to the fear of not having enough money to meet hospital bills, to the fear of not having enough money for the son’s or the daughter’s education or not having enough money for the daughter’s wedding and so on.
As Tyler Cowen, an economist at George Mason university in the US, writes in the book, Discover your Inner Economist “Often , buying insurance is about investing in a story about who we are and what we care about; insurance salesmen have long recognised this fact and built their pitches around it.”
Having given these examples, let me concede that some of these advertisements do push consumers towards buying the right product. But most of these advertisements are misleading. As the Business Standard recently reported “Whether it’s Complan or Horlicks, they claim to make a child taller and smarter. But their promises are not based on any scientific data….Abu Hasem Khan Choudhury, minister of state for health and family welfare informed the Lok Sabha in a written reply on November 30 that the food regulator had begun prosecution proceedings against manufacturers of 19 leading brands and issued show cause notices to 19 others for making false claims regarding the nutritional value of the product in advertising and on the label.”
As the story further pointed out “ For instance, Complan, a leading drink brand, claims it makes children grow twice faster. Horlicks promises to make children “taller, stronger and sharper”. Kellogg’s Special K claims people who eat low fat food in their breakfast tend to be thinner than those who do not, without providing any scientific study to back this claim. Products like Saffola oil, Rajdhani Besan and Britannia Vita Marie biscuits have been booked for making false claims of being “heart-friendly” and “reducing cholesterol”.”
All these products play on the fears and insecurities of consumers. If my kid doesn’t drink Complan/Horlicks he won’t grow tall. If I don’t eat Kellog’s Special K I will become fat. And if I don’t have Saffola oil I will have a heart attack.
Lindstrom summarises this phenomenon very well in a paragraph in his book Buyology – How Everything We Believe About Why We Buy is Wrong “That if we don’t buy their product, we”ll somehow be missing out. That we’ll become more and more imperfect; that we’ll have dandruff or bad skin or dull hair or be overweight or have a lousy fashion sense. That if we don’t use this shaving cream, women will walk by us without a glance…That if we don’t wear this brand of lingerie no man will ever marry us.”
Politicians are looking to do exactly the same thing when they practise the politics of fear. The recent debate on FDI in big retail had Sushma Swaraj saying things like “Will Wal-Mart care about the poor farmer’s sister’s wedding? Will Wal-Mart send his children to school? Will Wal-Mart notice his tears and hunger?”
She also said that “The remaining 70 percent of the goods sold in these supermarkets will be procured from China. Factories will open in China, traders will prosper in China while darkness will befall 12 crore people in India.” This is scaremongering of a kind similar to that indulged in by companies to sell their products.
Arun Jaitley, the leader of opposition in the Rajya Sabha, also indulged in the same when he said that “India will become a nation of sales boys and girls.”
And before I am labelled to be a Congi by the internet Hindus let me clarify that politicians from across the political spectrum have practised this strategy at various points of time.
“When a big tree falls, the ground shakes,” said Rajiv Gandh after his mother Indira Gandhi was assassinated by her Sikh bodyguards.
A section of the Indian National Congress (back then known as the Congress-I) whipped up mass frenzy against the Sikhs after the assassination. In the pogrom that followed Sikhs were killed all across northern and eastern India. And the Congress Party got 415 seats out of the 540 seats in the Lok Sabha, a feat not achieved even by Jawaharlal Nehru, the biggest leader that the party has ever had.
Kanshi Ram, had formed the the Dalit Soshit Samaj Sangharsh Samiti or DS4, before forming the BSP. The rallying cry for DS4 was”Thakur, Brahmin, Bania Chhod, Baki Sab Hain DS4.” This worked so well that when Ram decided to form the BSP he came up with a similar sounding but a more subtle slogan. “Tilak Tarazu aur Talwaar, inko maaro joote chaar.”
The late Bal Thackeray was a master of this craft first putting fear of Tamils in the minds of the Marathi Manoos and then Muslims as times changed. His nephew Raj, who left to form his own party the Maharashtra Navnirman Sena, took this strategy further and has put the fear of Bhaiyyas and Biharis in the minds of the Marathi Manoos.
Varun Gandhi made front page headlines when in a speech he said “Ye panja nahi hai, ye kamal ka haath hai. Ye kat** ke galey ko kaat dega chunaav ke baad.” Then there are also examples of parties like DMK, which have been built on creating the fear of the loss of culture and language.
When politicians try to create fear in the minds of the citizens their aim is similar to that of companies trying to create fear in the minds of consumers. Fear “is what our brains remember…”writes Martin Lindstrom in his book Buyology. Fear creates what Lindstrom calls “somatic markers” or brain shortcuts that link the brand sold to what needs to be done to take care of the fear: “Want you kid to grow tall? Get him to drink Complan!”
“Want a healthy life without a heart attack? Eat Saffola oil.”
Or in a political context “Don’t want the Chinese take away Indian jobs or sell goods in India? Vote for the Bhartiya Janata Party.”
“Want freedom from the oppression of upper castes? Vote for the Bahujan Samaj Party.”
“Want to revenge the assassination of Indira Gandhi? Kill Sikhs but don’t forget to vote for the Congress.”
While it is not as simple as that, but that is what it essentially means. Fear also gives rise to anxieties and insecurities of people and helps politicians come up with a war cry and make themselves easily heard. As Bill Bonner and Lila Rajiva write in Mobs, Messiahs and Markets “Men are ready to die for the group and kill anyone who resists its will.”
The war cry before the Babrji Masjid was destroyed was “Ek dhakka aur do, Babri Masjid tod do!”.
As Lindstrom writes in Brandwashed in the context of marketers “So whether it’s germs or disease or some feared version of a future self, marketers are amazingly adept at identifying a fear out of the zeitgeist (a German word which means the spirit of the times, italics are mine), activating it, amplifying it and preying on it in it in ways that hit us at the deepest subconscious level.”
Politicians do the same thing. They identify the prevailing fear, like Wal-Mart will get in all low cost Chinese goods (as if Indian companies are not) and destroy the kiranawallas. And then they activate it and amplify it by talking about it in their speeches. And if the comments on this piece that I wrote a couple of days back are anything to go by, they have been successful at it.
And so was Rajiv Gandhi!
The article originally appeared on www.firstpost.com on December 7, 2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
“Swami Vivekananda was a rockstar before they had a term like that”
Rohit Deshpandé is the 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, and first year marketing in the MBA program. In this interview to Vivek Kaul he talks about the provenance paradox, as to how companies from emerging markets find it very difficult to establish their brands globally, even though they have both the human as well capital resources required for such an effort.
Excerpts:
What is provenance paradox?
I have been interested in looking at the marketing problems of companies from emerging nations. The background is my previous work profiling the most successful companies in the world and doing that I found that these successful companies came from the developed world. So they came from the United States, they came from Europe and Japan and so on. The next phase was to identify who the next great multinationals are going to be. And my intuition was that they are not going to come from the developed world but they are going to come from the developing world given that they are hungrier, they are more innovative, and many of them have huge domestic markets, which is how these other companies from the developed world that I studied got started. They had access to big domestic markets.
What happened next?
When I started doing that work the marketing challenge that I found was a branding one. These companies from emerging markets wanted to build global brands and for some reason had difficulty doing it. So if you look at any ranking of the top 50 or the top 25 global brands, the BRIC nations (Brazil, Russia, India and China) are conspicuously absent, which is surprising because countries like Brazil, China and India, and to some extent Russia, have significant resources they can expend. This includes human resources as well capital resources. So it doesn’t seem to be a question of money.
Expend on building a brand you mean?
Yes. Expend on building the brand. That’s the barrier. It is not a question of ambition. It was a paradox and I couldn’t understand it. These are aspiratonal, ambitious, well resourced companies that don’t seem to be able to build global brands. Or at least not yet. One hypothesis when I was initially presenting this work was that people said that it takes a long time to build a global brand and that’s why. And it turns out that if you look at the top brands there are some that have come up in the last five years. On the technology side Facebook is a company that has built a global brand fairly recently. Google, has build a global brand in quick time.
Even a company like Apple which was down in the dumps…
Has risen to the top, number two, number three rank now. Excellent example. So it’s not a question of time. There is something else going on. The other thing that I noticed was that there is like a small area around Milan in Italy that has a bunch of them and they all happen to be in fashion, Armani, Versace and so on. And so I came to the provenance paradox. Why is it that when you say Made in Brazil or Made in India or Made in China people somehow discount? Is this soft racism? And that is one possibility. The fact that something is coming from China or from India, makes people say that it is just not good enough.
Even in India we don’t look up upon something that says Made in China…
The funny thing is that even in China they don’t look up to Made in China. You want to hear a story?
Yes…
I was talking to the person who runs the Asian operations for Prada. She was telling me that they are running short of artisans in Italy who can work with leather, silk and so on, to make purses. They have lost a generation of young people in Italy who have gone to work in factories. She said that the place that we find them is in China. They have retained these skills and they are cheap. The problem is she said that if it is a Prada bag or Prada shoes, that says Made in China, not only will they not buy it in Europe, the women don’t buy them in China as well. So extremely affluent women in China will not buy Made in China. So yes this provenance paradox is a real problem and it’s a problem within the countries itself.
Can you give us some examples of the provenance paradox?
One of the first ones I encountered was Café Columbia, which is a social enterprise of the federation of national coffee growers in Columbia. The coffee growers have small plot of lands. So they formed a federation to help them market the product because they did not have the resources to market the product. These guys realised very quickly that they have a problem because they wanted to export and Columbia is seen as the exporter of the other “cash” crop. So in a country like the US which is the largest coffee consuming market in the world they couldn’t get any real penetration.
What did they do?
They hired an advertising agency on the Madison Avenue to create an advertising campaign around this fictitious coffee grower from Columbia called Juan Valdez who took great care of the coffee beans and picked up the best ones as he wandered through the hills. People developed a tremendous affection to this character and which passed onto the brand. They build something called 100% Columbian Coffee which is the brand. They had the country of origin in the name of the brand. And it’s an ingredient brand, meaning, that they don’t sell to retailers directly. They sold it to Nestle, who would put it into their Nescafe brand of coffee and said Nescafe 100% Columbian.
Any other example?
Let me give you another example that is very different. Corona beer. Does Corona sell here?
Yes.
The advertising for Corona doesn’t mention the country of origin, which is Mexico, at all. In fact what they do is they play off this whole lifestyle theme of vacation on the beach. The creative strategy for their advertising is sun, fun, beach, and vacation in a bottle. They have been extremely successful with it. People project themselves into those ads. The beach doesn’t have to be in Cancun (a seaside city with beaches, situated in Mexico). It could be in Riviera. It could be in Kerala. It could be anywhere in the world. But they built a successful brand by not saying anything about the provenance (i.e. the country of origin) and it is intentional. That’s what they wanted to do. They did not want to be clubbed with other Mexican beers which tend to be cheap. These guys price premium and they price the same level as Heineken in the US. And Heineken had been the number one imported beer brand in the US for fifty years since prohibition. They overtook them.
Any other example?
The third one is a case study that I have just finished and which I am teaching for the first time here tomorrow. It’s on Infosys. I knew that they had built a global technology brand but they had spent hardly anything on marketing or on advertising. In fact they don’t spend any money on advertising. I said how is it possible? When I looked at their space there are other companies in that space which are spending a lot. Like there major competitors would be IBM and Accenture for instance, and they are spending tonnes and tonnes of money. These guys don’t spend.
So what do they do?
What they do is that they build personal relationships with their buyers, which is just amazing. They narrow cast this thing down. They know there target market very well which is really few companies. They know that there are five people who make purchase decisions within IT and they go after those people. There information systems are just fantastic. They are serving clients who compete with each other on different floors of the same building. Just think about the security issues here. The amount of trust that they have engendered is absolutely fantastic. They build a trust mark and not a trademark.
Examples that you have given till now are on the positive side. Can you give us some examples on the negative side?
There are several companies that have had a really really hard time building a global brand. I have written a case study about the number one ultra premium vodka from Russia. It’s called Russian Standard. They have not been successful in the US market. A product called Grey Goose, one of the successful vodkas in the US, comes from France. Then there is Absolut which comes from Sweden. There is a product called Chopin which comes from Poland. They are all really good expensive Vodkas but they don’t come from Russia. So these guys said provenance is so important because people should know that vodka should be Russian. They are drinking French vodka. French champagne is okay. But French vodka? But Russian Standard has had a hard time. Americans are either not comfortable drinking a Russian product and still feel a little jingoistic about this. Or they don’t care where the product comes from.
Any Indian examples?
The Tatas have been trying to build a global brand. There issue is that they have so many different companies and they all have different brands. Let me talk about Taj Hotels. In the US they have acquired three properties. They acquired the old Ritz-Carlton in Boston and rebadged it. They acquired The Campton House in San Francisco and rebadged it. So the two hotels became the Taj San Francisco and Taj Boston. And they acquired The Pierre in Manhattan and it is still The Pierre because the co-op that owns it refused to allow the world Taj on it. So it’s the Pierre, a Taj Hotel company or something like that. And then it’s a Tata company. So there are three brands. There is The Pierre, there is the Taj and it is to be called a Tata Enterprise as the case is with all the Tata companies.
So they have got a problem then?
I remember talking to Ratan Tata once and he was talking about the acquisition of Tetley, a very huge Tata Tea enterprise. Should it be Tata Tetley or will that damage the Tetley brand? They acquired Land Rover and Jaguar and they have been in automotive for a very long time. Should they be badging it Tata Land Rover? From your face you have already expressed an opinion, which I think they share. So they have had a problem building a global brand. When you grown by acquisition you acquire some brands that have their own equity, do you impose your own brand on them or you connect it in some way. It’s not that it cannot be done. Lenovo did it as an example of a Chinese brand because they moved out of Thinkpad which they used to make.
Since we have been talking about the Tatas, do you think the Tata Nano as and when it does manage to go abroad will face the provenance paradox despite all the publicity that it got initially?
The Nano will certainly encounter the provenance paradox and it’s a question of how they are going to get around it. Geely, which is one of the largest Chinese automobile companies, has had a hard time penetrating outside China . So what they did was that they bought Volvo, which is a very well known Swedish company and they now have dealerships that sell both Geely and Volvo. The hope is that by association people will associate Geely with quality which is what Volvo is all about. Volvo is known for safety, durability and quality. Whether it will work or not we don’t know.
Something like a Yoga which has been a very successful Indian export to the US. Why did that not encounter any provenance paradox?
The story of yoga in the US goes back to Swami Vivekananda. He was the one who popularized India, Indian philosophy, Hinduism, eastern spirituality and a part of that was yoga. It had to do with meditation. It had to do with breathing. It was more of pranayam rather than the asanas. When he came to America he was so charismatic. He was a rockstar before they had a term like that. There would be audiences overflowing in Chicago, Los Angeles, New York etc. They would come to his lectures. He would be wearing a saffron robe and a turban and he would talk about his stuff. For the intelligentsia and the affluent it became a kind of a chic thing to explore India. This is way before the Beatles came to India for Maharishi Yoga.
This was the late 19th century…
So this was how it got started. Now fast forward to the last ten years or so. Yoga devotees in the US are largely the women. It is seen as a form of exercise that is low body stress, very healthy, and more natural exercise than what had been popular before and to some extent and still is, which is aerobics. Before that it was running. So yoga is seen as a better form of exercise than those and that is a big part of why yoga became popular. It does not anymore have a connection with Hinduism. And therefore not as much of a connection with India. So provenance has been disconnected from yoga.
And that has happened over a long time period of time?
It has happened over a long period of time but the popularity of yoga is relatively recent. It is now a $6billion per year industry in the US. And it’s a pyramid and only a few people at the top are doing very well. And there are lots of yoga teachers who are working out of a mall and who are eking out a living, but they don’t make much money. An example of someone who has done really well is Bikram yoga. I don’t know if you know Bikram Choudhury. So he has this particular kind. It has to be at a certain temperature. It is only 26 asanas. Then there is Tara Stiles. She is Deepak Chopra’s yoga teacher. She doesn’t say anything in Sanskrit. It is very new age. She uses social media a lot to communicate. So I think yoga been disconnected from provenance.
You write that Indian and Chinese firms that face the provenance paradox currently can learn a lot from the Japanese firms of the 1950s and the Koreans of the 1980s. Could you discuss that in some detail?
The Korean studied what the Japanese did and what the Japanese did was at the low end. You enter at the low end and come up with a really really high quality product which doesn’t break down. You offer it really cheap and nobody wants the low end because they are all busy moving up into the high end. They have got legacy investments so they got to charge higher prices. So you get in. You keep improving your brand and you gradually keep moving up. The Japanese moved up as high as the market would let them. So in the case of Toyota it was Lexus. In case Honda it was Acura and in case of Nissan it was Infiniti.
And the Koreans learnt from this?
The Korean car manufacturers watched that and they are now outsmarting the Japanese in many ways because they are coming in with the same low end strategy but they are moving up faster. And they are moving up faster, so far at least, keeping the same brand. So Hyundai has been very successful. Kia has been very successful. The other examples from Korea are Samsung and LG in electronics. What they did is they looked at what Sony did and what Matsushita and what Panasonic did and they are copying that strategy but going one step better. So the Japanese are in a little bit of disarray right now for a variety of reasons and Koreans are overtaking them. Samsung is now taking away significant market share away from Sony.
So how would it work in the context of let’s say an Indian IT company like TCS?
We have already seen the IT companies like Infosys, TCS and Wipro, doing a very good job at the low end, which is basically what they were doing with call centre kind of work and business process redesign work. But moving up the chain is proving to be difficult. So here you are not just moving up in price but you are moving up in the nature of the service being offered because now you are getting into strategic consulting work which is a sort of the domain of the IBM’s consulting services or Accenture’s consulting services. And that’s become an issue. Also what has happened is a lot of these competitors like IBM and Accenture have said you know what if it is a labour cost advantage, let’s invest in India and set up huge operations there.
Yes that is true
So IBM’s largest employment is in India now. Accenture has huge investments here. And then what makes it even more serious for companies like Infosys and TCS is that many of their key clients have said that we will set up our own IT operations in India. And they call them captive. And they are saying that we don’t have to worry about somebody else’s security systems or value systems for that matter. We will train them. They are our employees. Fidelity which is a very large financial services institution headquartered in Boston has significant investment in India and they are planning to increase their headcount here. And a lot of that work was being done by Infosys.
So basically Indian IT companies cannot move on the up end and are also being hit on the low end?
That’s right. That is the big picture. All these strategies work for a while but then somebody figures it out. It is so dynamic and that’s what makes it so exciting.
Can you tell us something about the course you are teaching in India?
It is a course that was designed at the Harvard Business School to cover topics of ethics and corporate governance. These were topics that were not being covered in any significant way in our curriculum. And after some history of trying to cover them within mainstream subjects like marketing ethics for instance or financial ethics, we decided to come up with a full course.
It’s a compulsory course?
It’s required first year MBA course. It’s taught not as ethics but it’s taught as a leadership course. And so one of the frameworks that we use is what we call the three lenses of leadership. And the three lenses of leadership are financial lens, the obvious one, the legal lens and the ethical lens. And the notion is that in framing problems you want use all three lenses. Students like to come to a business school because they like to learn about the financial lens. They are really not thinking about the legal lens. And they don’t even know how to formulate questions around the ethical lens. And that’s what we talk about.
The article was originally published on www.firstpost.com with a different headline on November 26, 2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
Why Brand Obama trounced misbranded Mitt Romney
Al Ries is a marketing consultant who coined the term “positioning” and is the author of such marketing classics (with Jack Trout) as The 22 Immutable Laws of Marketing and Positioning: The Battle for Your Mind. He is also the co-founder and chairman of the Atlanta-based consulting firm Ries & Ries with his partner and daughter, Laura Ries. Along with Laura he has written bestsellers like War in the Boardroom and The Origin of Branding. In this interview he speaks to Vivek Kaul and analyses why brand Barack Obama emerged stronger than brand Mitt Romney.
How would you define the brand Barack Obama? What are the three characteristics that you would attribute to him?
Consistent. The three characteristics I would attribute to Barack Obama are (1) Consistency. (2) Consistency, and (3) Consistency. He took office promising “change.” And the major changes he promised include creating jobs, reforming the health-care system and reducing the deficits by increasing taxes on the wealthy. He has never wavered from these three basic principles.
Brand experts talk about a strong story accompanying a brand. What do you think is Obama’s story?
His story is his climb from poverty to a law degree from Harvard, our most-prestigious university. It includes his birth to a Kenyon father and an American mother, one black and one white. He is unique. Very few politicians have a story quite like Barack Obama. One exception is John McCain, who was defeated by Barack Obama in the 2008 Presidential elections. John McCain’s story is the five-and-a-half years he spent in Vietnam as a prisoner of war and the torture he endured. This created a tremendous amount of sympathy for him. But he lost the election because he was handicapped by the negative reaction to the eight years of the previous President, George W. Bush.
What are the right things that Obama did to build brand Obama in the run up to the elections?
His entire campaign was built around a single idea and he expressed it with a “two-sided slogan.” A two-sided slogan is like a two-sided knife. It cuts both ways. It says something positive about your brand and something negative about the competition.
Could elaborate on that?
Take “Believe in America,” Mitt Romney’s slogan. It’s a nice thought, but it’s a one-sided slogan. It says something positive about Mitt Romney, but what does it say about his opponent?
That Barack Obama doesn’t believe in America? A country that educated him at Harvard. A country that elected him to the Senate and the Presidency. A country that made him wealthy and world famous. Barack Obama doesn’t believe in America? Highly unlikely.
What does Obama believe in? The number one issue among voters is “jobs,” but he couldn’t claim much progress on this issue because of the economy. His best approach was to plead for more time to “finish the job.” So he used the slogan “Forward.”
And what did that imply?
His “Forward” slogan implied that Republicans want to go backwards to policies that failed in the past. Forward is a great slogan because it cuts both ways. This makes two in a row for Barack Obama. His 2008 slogan, “Change we can believe in,” was also a two-sided slogan. With the Republicans in power, John McCain couldn’t exactly advocate “change,” because that would offend his base. The best he could do would be to imply that he would do the job “better than Bush.”
What are the things that went wrong for Obama?
Nothing. The American economy is in bad shape. Deficits are enormous. The Republicans should have won in an easy election, but their marketing strategy was bad.
Which is the brand that you think comes closest to brand Obama?
Virgin might come close because it’s a brand associated with Richard Branson, a unique individual with many stories.
When it comes to brand names the brand name Obama is fairly different from the usual. How does that work/not work?
What many companies forget is that a brand name should be “unique and different.” The biggest mistake companies make is trying to create a brand name that says something about the product or service they are offering. A typical example is “Seattle’s Best Coffee,” a high-end coffee chain launched in America. But the competitor was Starbucks, a unique and different name unrelated to coffee. Starbucks is a far better name than Seattle’s Best Coffee, which is a generic name. Ask people, What is Seattle’s Best Coffee? And they are likely to say, Starbucks.
Could you give us another example from business to substantiate your point?
Google is a typical example. When you start with a unique name without any specific meaning, you can make the name mean whatever you want it to. Yesterday, Google meant nothing. Today, Google means “search” and it’s become one of the most valuable brands in America. On the stock market today, Google is worth $220.1 billion.
How would you define the brand Mitt Romney? What are the three characteristics that you would attribute to him?
Romney is a “business” leader and the attributes voters attribute to him are all based on his business experience. Businesses should (1) Make money. (2) Reduce expenses. (3) Avoid taxes legally.
What is that made brand Romney attractive to the white American male? And what is it that made him unattractive towards everyone else?
The white American male is focused on becoming a business success. He expects to work hard and be rewarded when his hard work pays off. The white American male resents having to share the rewards of his hard work with the government in the form of higher taxes. Women are more family oriented. They don’t mind sharing with less-fortunate individuals. That’s why many of them voted for Barack Obama.
Which is the brand (or even brands) of a product or a service that you think comes closest to brand Romney? And why?
You could list almost every American corporation from IBM to Microsoft. The general perception is that companies want to increase profits, reduce expenses and find a way to avoid taxes (legally.)
You have always said that marketing and branding are all about focus. So who do you think had more focus Obama or Romney? And why?
Barack Obama was focused on just one thing: “Let me finish the job.” That idea was expressed in his slogan “Forward.” Mitt Romney was focused on attacking Obama for the lack of jobs and the high deficits. All true, of course, but that’s a losing political strategy. A politician needs to first have a “positive” focus. I think Mitt Romney should have focused on his business experience and then used a slogan like “Let’s run the government like a business.”
I was reading somewhere that both Obama and Romney employed a technique called brand hijacking in the elections. People who type one candidate’s name into Google’s search box in some markets have seen ads for his opponent. A search for “Barack Obama,” for instance, has yielded ads for Romney, while entering “Mitt Romney” has resulted in ads for Obama. Romney has used a similar tactic on Facebook. How does that help? Would you advocate something like that in the future?
I would not advocate something like this. While it might be effective with some people, it might turn off others.
What are the branding mistakes that Romney make? How difficult was it to beat an incumbent President who was struggling with the economy and most of everything else?
Mitt Romney spent most of his time attacking Barack Obama. That’s the wrong strategy. What a politician needs to do is to offer a positive concept first (business experience) and then point out that his or her opponent lacks this concept. (Barack Obama has never worked in the private sector). It should have been easy to beat an incumbent President with his track record.
I was reading an article on Fast Company and it said “politics, after all, is about marketing — about projecting and selling an image, stoking aspirations, moving people to identify, evangelize, and consume.” Would you agree with something like that and why?
Absolutely. It’s all about perceptions, not reality. That’s what marketing is all about, creating positive perceptions in the minds of consumers.
What are the branding lessons that companies can learn from Obama’s successful campaign?
Years ago, Bill Clinton became famous for running a campaign which his consultants dubbed: “It’s the economy, Stupid.” Today, a company should adopt something similar. It’s what I call the KISS approach. “Keep it simple, Stupid.”
The article originally appeared on www.firstpost.com on November 8, 2012. http://www.firstpost.com/world/why-brand-obama-trounced-misbranded-mitt-romney-518734.html
(Vivek Kaul is a writer. He can be reached at [email protected])