NEWS
Massaging the message A new breed of marketer turns conventional brand wisdom upside down
By Andy Holloway, March 15, 2004
Everyone knows the Four Ps of marketing. Some experts though have begun to question whether it might be time to bury product, place, price and promotion. Aside from an easy answer on b-school exams, these tenets, together or apart, have formed the backbone of just about every marketing campaign of the 20th century, turning companies such as Coca-Cola and Ford into world-class brands. But in today's world, where we're inundated with quality choices and marketing messages, some have begun to say the Four Ps no longer work. "The Four Ps are left-brain simple marketing models that target the conscious memory, which hits only 5% of the reasons why we buy," says Marie Germain, a 25-year Canadian marketing veteran and part of a new breed of marketer who focuses on experience rather than attributes. "It's easy for marketers to say, 'We have the whitest milk,' and then make a $3-million campaign proving they have the whitest milk. Well, who cares?"
Consumers don't base their purchasing decisions on such trivialities, Germain and others argue. What they do care about is having a relationship with the products and services they consume. But how do you tap into that passion? Joe Calloway thinks he knows. "Most companies can't figure out how to differentiate without coming up with a slogan that says, 'Our product is better,' which it's probably not, or getting trapped into playing price," says Calloway, author of the 2003 book Becoming a Category of One, and a renowned Nashville-based branding consultant. "The place to differentiate is in that very personal sensory-emotional realm of what the customer feels."
Don't believe it? Then ask yourself how Krispy Kreme succeeds in offering an expensive fatty food, or how Starbucks convinces customers to wait in a lengthy line for a latte and then order it with ridiculous jargon, or why Nike is the only type of running shoes your kids will wear. Those companies have tapped into a comforting "third place" outside the pressures of work and home. Their products, simple as they may be, transcend their physical existence because the experience of buying them resonates with us. Starbucks serves coffee, yes--but its real appeal lies in its stores' aroma, the clickety-clack sounds of a latte being made, the cushy stuffed chairs and the potential to meet others who already share one of your interests. Krispy Kreme wins us over because it offers us freedom from everyone else telling us what not to eat. We like Nike because it's cool and expensive, and allows us to buy into a hipper and fitter image of ourselves. "We don't forget smells, visual experiences, auditory experiences or kinetic experiences," says Germain, CEO of Brighton, Ont.-based Germain Strengthening Brands and chair of Brand Revival, an ongoing branding symposium in major Canadian cities.
The more senses you can connect with, the easier it is to create that third place. Foods fit easily into this style of marketing, but Calloway says he has yet to run across a business where the principal won't work. Internet companies, cataloguers, business-to-business shops, even tractor-part suppliers can pull it off. That's because inherent in any product, whether it's a straw or a car, say the new marketers, is a DNA that can be exploited. It may not be as deep and rich as you want it to be, but you can fabricate it, Germain insists. And that, she argues, is what marketers should be working with--not artificial concepts such as brand leadership or price performance.
The conventional reliance on the Four Ps has as much to do with outside pressures from shareholders, upper management and competitors as it does with sheer laziness, say the new marketers. Traditional methods of driving revenues, such as price discounting, value-added offers and sweepstakes, they argue, are short-sighted at best--and potentially harmful to a company's long-term bottom line. "Why would a wonderful product have to be on sale?" asks Germain. "What's wrong with it?"
Sure, there will always be another offer that entices consumers to switch allegiances momentarily. But they'll generally return to the brand they feel something positive about. And anything that damages that relationship is not going to sit well with shareholders. After all, a company's brand is its top corporate attribute. In fact, it's a more important measure of success than stock market performance, profitability and return on investment, according to a January survey of 132 corporate leaders by the World Economic Forum. Nearly 60% also believed that their brand or reputation represented more than 40% of any company's market capitalization, putting a high value on something that was once regarded as a mere intangible that was hard to quantify.
Dispensing with the Four Ps is one thing, but the new breed of marketer says companies have blindly bought into several other common marketing myths, as well.
Myth: Differentiate or die
Reality: We tend to obsess about the competition, no matter what business we're in. What are they doing that we're not? Are they gaining on us? What will they do next? Half the market ends up emulating competitors, while the other picks away at insignificant points in a desperate attempt to be seen as different. "It's difference for difference's sake," argues Germain. "It's better to be better than to be different."
Myth: Price leadership works
Reality: Wal-Mart can make money by having the lowest prices around, but can you? "Most companies don't want to play the price game, but they get trapped in it because they can't figure out how else to differentiate," says Calloway. Price discounting can also erode and "pollute" a brand. Companies would be better off being strong "brand parents," Germain maintains. That means sometimes showing tough love and refusing to let products go on sale, even when everything else in a store has been discounted.
Myth: Market leadership pays off
Reality: Leadership, top-of-mind awareness and market share are all typical things a business brags about. Coke tells us it's the No. 1 brand in the world, but it's a concept that doesn't really affect consumers, argues Germain. Over the years, Coke has steadily lost market share to Pepsi and the generic cola manufacturers, so its challenge is to keep its core customers and not worry about the competition. As Germain advises, it's better to have deeply relevant products for a particular set of consumers than to be No. 1.
Myth: Loyalty programs create loyalty
Reality: Giving customers points for their purchases is all well and good--but Germain says that doesn't really create loyalty. Purchase behaviour is not indicative of customer behaviour, and loyalty is not a measure of purchase behaviour, she maintains. "I would rather see loyalty talked about in terms of advocacy," says Germain, meaning customers will tout a company's products because they like them so much. "That's a true measurement. It's the extreme of loyalty."
Myth: Focus groups are a good way to gauge customer behaviour
Reality: Surveys and focus groups are often flawed and sometimes corrupt, say the new marketers, because they're frequently done to satisfy a need for a particular result. A charmless boardroom with two-way mirrors is not the best place to ask questions. To truly find out how people feel about something, get them into an appropriate product-specific environment (such as a bar for a survey on beer), ask open-ended questions and explore those answers for clues.
Finally, remember that offering quality products and services is not a differentiator. As consumers, we assume that what's being sold is fairly priced and comparable to other products. The toughest question businesses face is why consumers should choose them over their competition. "Most companies do a very poor job of answering it," says Calloway. "They go back to slogans and clich s like, 'It's our people,' or 'We give great service.' I challenge companies to prove it."
That takes work and commitment. It's rare that anyone can create something that can't be copied, so maintaining an advantage is a never-ending task. Don't kid yourself, says Calloway; it's going to be messy and painful as employees adopt and sustain a marketing strategy that is far more inclusive and encompassing than anything they've experienced. In fact, he concludes, "If it's not messy and painful, then you're probably not making a very significant change."
© 2004 Rogers Media Inc.
Massaging the message A new breed of marketer turns conventional brand wisdom upside down
By Andy Holloway, March 15, 2004
Everyone knows the Four Ps of marketing. Some experts though have begun to question whether it might be time to bury product, place, price and promotion. Aside from an easy answer on b-school exams, these tenets, together or apart, have formed the backbone of just about every marketing campaign of the 20th century, turning companies such as Coca-Cola and Ford into world-class brands. But in today's world, where we're inundated with quality choices and marketing messages, some have begun to say the Four Ps no longer work. "The Four Ps are left-brain simple marketing models that target the conscious memory, which hits only 5% of the reasons why we buy," says Marie Germain, a 25-year Canadian marketing veteran and part of a new breed of marketer who focuses on experience rather than attributes. "It's easy for marketers to say, 'We have the whitest milk,' and then make a $3-million campaign proving they have the whitest milk. Well, who cares?"
Consumers don't base their purchasing decisions on such trivialities, Germain and others argue. What they do care about is having a relationship with the products and services they consume. But how do you tap into that passion? Joe Calloway thinks he knows. "Most companies can't figure out how to differentiate without coming up with a slogan that says, 'Our product is better,' which it's probably not, or getting trapped into playing price," says Calloway, author of the 2003 book Becoming a Category of One, and a renowned Nashville-based branding consultant. "The place to differentiate is in that very personal sensory-emotional realm of what the customer feels."
Don't believe it? Then ask yourself how Krispy Kreme succeeds in offering an expensive fatty food, or how Starbucks convinces customers to wait in a lengthy line for a latte and then order it with ridiculous jargon, or why Nike is the only type of running shoes your kids will wear. Those companies have tapped into a comforting "third place" outside the pressures of work and home. Their products, simple as they may be, transcend their physical existence because the experience of buying them resonates with us. Starbucks serves coffee, yes--but its real appeal lies in its stores' aroma, the clickety-clack sounds of a latte being made, the cushy stuffed chairs and the potential to meet others who already share one of your interests. Krispy Kreme wins us over because it offers us freedom from everyone else telling us what not to eat. We like Nike because it's cool and expensive, and allows us to buy into a hipper and fitter image of ourselves. "We don't forget smells, visual experiences, auditory experiences or kinetic experiences," says Germain, CEO of Brighton, Ont.-based Germain Strengthening Brands and chair of Brand Revival, an ongoing branding symposium in major Canadian cities.
The more senses you can connect with, the easier it is to create that third place. Foods fit easily into this style of marketing, but Calloway says he has yet to run across a business where the principal won't work. Internet companies, cataloguers, business-to-business shops, even tractor-part suppliers can pull it off. That's because inherent in any product, whether it's a straw or a car, say the new marketers, is a DNA that can be exploited. It may not be as deep and rich as you want it to be, but you can fabricate it, Germain insists. And that, she argues, is what marketers should be working with--not artificial concepts such as brand leadership or price performance.
The conventional reliance on the Four Ps has as much to do with outside pressures from shareholders, upper management and competitors as it does with sheer laziness, say the new marketers. Traditional methods of driving revenues, such as price discounting, value-added offers and sweepstakes, they argue, are short-sighted at best--and potentially harmful to a company's long-term bottom line. "Why would a wonderful product have to be on sale?" asks Germain. "What's wrong with it?"
Sure, there will always be another offer that entices consumers to switch allegiances momentarily. But they'll generally return to the brand they feel something positive about. And anything that damages that relationship is not going to sit well with shareholders. After all, a company's brand is its top corporate attribute. In fact, it's a more important measure of success than stock market performance, profitability and return on investment, according to a January survey of 132 corporate leaders by the World Economic Forum. Nearly 60% also believed that their brand or reputation represented more than 40% of any company's market capitalization, putting a high value on something that was once regarded as a mere intangible that was hard to quantify.
Dispensing with the Four Ps is one thing, but the new breed of marketer says companies have blindly bought into several other common marketing myths, as well.
Myth: Differentiate or die
Reality: We tend to obsess about the competition, no matter what business we're in. What are they doing that we're not? Are they gaining on us? What will they do next? Half the market ends up emulating competitors, while the other picks away at insignificant points in a desperate attempt to be seen as different. "It's difference for difference's sake," argues Germain. "It's better to be better than to be different."
Myth: Price leadership works
Reality: Wal-Mart can make money by having the lowest prices around, but can you? "Most companies don't want to play the price game, but they get trapped in it because they can't figure out how else to differentiate," says Calloway. Price discounting can also erode and "pollute" a brand. Companies would be better off being strong "brand parents," Germain maintains. That means sometimes showing tough love and refusing to let products go on sale, even when everything else in a store has been discounted.
Myth: Market leadership pays off
Reality: Leadership, top-of-mind awareness and market share are all typical things a business brags about. Coke tells us it's the No. 1 brand in the world, but it's a concept that doesn't really affect consumers, argues Germain. Over the years, Coke has steadily lost market share to Pepsi and the generic cola manufacturers, so its challenge is to keep its core customers and not worry about the competition. As Germain advises, it's better to have deeply relevant products for a particular set of consumers than to be No. 1.
Myth: Loyalty programs create loyalty
Reality: Giving customers points for their purchases is all well and good--but Germain says that doesn't really create loyalty. Purchase behaviour is not indicative of customer behaviour, and loyalty is not a measure of purchase behaviour, she maintains. "I would rather see loyalty talked about in terms of advocacy," says Germain, meaning customers will tout a company's products because they like them so much. "That's a true measurement. It's the extreme of loyalty."
Myth: Focus groups are a good way to gauge customer behaviour
Reality: Surveys and focus groups are often flawed and sometimes corrupt, say the new marketers, because they're frequently done to satisfy a need for a particular result. A charmless boardroom with two-way mirrors is not the best place to ask questions. To truly find out how people feel about something, get them into an appropriate product-specific environment (such as a bar for a survey on beer), ask open-ended questions and explore those answers for clues.
Finally, remember that offering quality products and services is not a differentiator. As consumers, we assume that what's being sold is fairly priced and comparable to other products. The toughest question businesses face is why consumers should choose them over their competition. "Most companies do a very poor job of answering it," says Calloway. "They go back to slogans and clich s like, 'It's our people,' or 'We give great service.' I challenge companies to prove it."
That takes work and commitment. It's rare that anyone can create something that can't be copied, so maintaining an advantage is a never-ending task. Don't kid yourself, says Calloway; it's going to be messy and painful as employees adopt and sustain a marketing strategy that is far more inclusive and encompassing than anything they've experienced. In fact, he concludes, "If it's not messy and painful, then you're probably not making a very significant change."
© 2004 Rogers Media Inc.
