Professional Documents
Culture Documents
© 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471
www.palgrave-journals.com/bm/
Editorial
Brand
Believers
(Customers)
How Who
Interactive marketing to Making promises
co-create customer External marketing is
experience (delivery of “making promises about
value propositions) value propositions”
Operational excellence Customer intimacy
Value
Delivery
Brand Brand
Providers Visionaries
(Employees, (Management)
Channel)
What
Internal marketing to
“enable & facilitate promises
about value propositions”
Product innovation
has a simple mantra of being the low-cost bring it to life for the customer beyond
competitor. When Herb Kelleher, the what is possible with media communica-
former CEO, was onboard his decision- tions, by making it personal. This concept
making guidance was simple. If someone of brand ambassador is essentially a role for
came to him recommending that South- management in aligning employees within
west Airlines develop a program to recog- the corporation. Managers need to build a
nize the birthdays of its customers he would vision of company strategy. They also need
retort that if the initiative would support to bring that strategy to life by building a
making Southwest the lowest-priced com- company culture that embodies the essence
petitor on the market that logic would of that strategy. By going one step further,
decide whether to pursue the idea. A simple by using the concept of train-the-trainer,
stated strategy is one that is also easy to companies can educate a few talented indi-
follow for brand providers. viduals within the company and position
The brand reward system needs to reflect them to drive the brand values throughout
the value of the brand to align goals and their areas of influence within the firm.
metrics. Southwest not only made sure the Apple’s foray into retail brought some
minds of the employees were guided by innovations to light regarding how it
strategy; it also made sure their pocketbooks delivers its customer service. One aspect of
were aligned with strategy. In 1974, it ini- that customer service is the Genius Bar that
tiated the first profit-sharing plan in the US is staffed by Genii. Newly hired Apple
airline industry. When the employees own Genii go to Apple’s headquarters in
the company stock it is in their best interest Cupertino for 2 weeks of intensive training
to create future value for the company. where they earn Apple technical certifica-
Front-line employees are brand ambas- tions and learn the minutiae of AppleCare
sadors. They represent the brand and can internal policies. Apple advertises its career
466 © 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471
Editorial
© 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471 467
Editorial
step further and measure an employee’s can lead things astray. Google developed a
knowledge, beliefs and attitudes towards software platform called Android that it
the brand. licenses to hardware manufacturers including
Consistency across the brand portfolio is HTC, Motorola, Samsung and Sony.12 In
a necessary element of strong brand strategy. December 2009, Motorola launched the
Samsung has risen to a path to quality across Droid phone based on Android 2.0 on the
its brand portfolio. Not only does it pro- Verizon network to a frenzy of sales
duce stellar televisions and personal elec- reaching a million units sold faster than the
tronics but it is also rated number one by iPhone. After this great success Google
JD Power on home appliances including announced on 5 January 2010 that it would
refrigerators, clothes washers and clothes launch its own phone called the Nexus
dryers.10 It is important for the brand to One. However, unlike the Motorola Droid
guide and represent a specific level of the Nexus One tripped on its way off the
quality to deliver across the portfolio and, starting block. Its hardware was top notch
in addition, it is important to continuously but its software was overhyped. It con-
support the quality over time. Canon is a tained Android 2.1, which was a minor
solid example of this in cameras. Its cameras upgrade and less than what the customers
are consistently rated highly by expert expected. But the biggest hurdles were not
reviewers. Canon delivers on this by having based on the product. The phone was orig-
made a commitment to achieving the best inally sold exclusively on T-Mobile that
in optics across its wide product portfolio trails in markets share at 12 per cent com-
of cameras, copiers, projectors, scanners, pared to Verizon and AT&T at 31.1 per
eyecare, freespace optics and motion pic- cent and 25.2 per cent, respectively.13 Sub-
tures equipment. Brand consistency is sequently, the phone was made available
driven by a strong brand vision to guide on the AT&T network but it was sold only
what the brand providers are to deliver. in an unlocked version at $530, which
Brand vision also helps guide decisions places it at a very hefty premium over the
over product lifecycles. Apple also has been $199 iPhone that is sold locked and subsi-
a good sequencing value from Mac to iPod dized by the carrier. The final slip-up was
to iPhone to iPad. By establishing consist- that Google was not ready for prime time
ency over the portfolio the new brands as a consumer electronics company as its
launched not only are supported by the customer service was greatly lacking. Users
legacy brands, but the legacy brands are found it hard to connect with a real human
revived and revitalized by the new brands. to handle service support and the response
In this down economy, one of the few time for service requests was dismal, taking
bright spots is Apple, whose sales have con- several days turnaround on emailed ques-
tinued to climb, and the company claims tions. The result was tepid sales with the
9 out of every 10 dollars spent for com- Google Nexus One gaining only 2 per cent
puters over the $1000 price point. In the in market share by the end of Q1 2010 of
first quarter of 2008 it only claimed 6.6 Android phones. A company expanding its
dollars of every 10 dollars spent.11 The call portfolio from a product oriented to a
to brand consistency across the brand port- service or solution orientation needs to
folio helps employees know what to strive retool at a deeper level to understand what
for in the new generation of products. will drive the overall value for the cus-
Google’s Nexus One phone provides a tomer. The expected promise at the cus-
good illustration of how a lack of internal tomer level needs to be aligned with brand
focus on the customer value proposition providers’ delivery of the brand.
468 © 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471
Editorial
Strong brands align their external promises proceedings it was forced to shut down
to their internal operations. Southwest Air- Song.17 The problem with imitation is if
lines, as a low-cost provider, has aligned its you do not get all the interlocking activities
activities with its strategy. It offers limited right you are bound for a competitive dis-
passenger service with no meals, no seat advantage. To make things work for radical
assignments, no connections with other air- innovation a company needs to manage its
lines and no baggage transfers. It has fre- businesses more like independent portfolios
quent reliable departures made possible by or else the dominant culture will crush the
15-min gate turnarounds, automatic tick- fledgling before it can take wing.
eting machines and highly productive
grounds crew who are motivated through
high compensation, and stock ownership. EXTERNAL ALIGNMENT
The union contract is flexible, benefiting OF THE BRAND
the airline. In addition, the costs are con- Brands need to be aligned to markets and
trolled by limited use of travel agents, for developed world companies there is a
standardized 737 aircraft, high asset utiliza- tendency to overinvest in mature markets
tion and service via point-to-point routes and underinvest in emerging markets. Big
between mid-sized cities and secondary air- American automakers General Motors and
ports for larger urban airports. The com- Ford totally missed the bottom of the
petitive advantage does not come from one market. Ford especially is out of touch with
activity but rather the holistic group of its heritage as the Model T is generally
interlocking activities.14 regarded as the first affordable car. Tata
As the saying goes, the greatest compli- Motors is at the vanguard of the new
ment is imitation. Delta launched a wholly emerging market of new car buyers and
owned budget carrier Song Airlines and its Nano car priced at $2000 it is being
intended to copy Southwest’s model by called the world’s cheapest car. Months
offering limited in-flight catering, single before the release of the first model in 2009
aircraft type, higher asset utilization, Tata Motors stated there was already a
improved staff utilization and reduced waiting list of 203 000 people who have
channel costs.15 Although the changes placed orders for the car and a wait until
improved Song’s cost by 20–30 per cent 2011.18 Ford can count that as a missed
over Delta, it was still short of the 28 per opportunity.
cent and 39 per cent costs advantage over BP is in the middle of a crisis of one of
Delta by JetBlue and Southwest.16 Song’s the biggest man-made disasters ever. The
strategy was caught in the middle with BP website states ‘We help the world meet
compromises it had to make as a subsidiary its growing need for heat, light and mobility,
of Delta including having to participate in and strive to do so by producing energy
Delta’s expensive pilot contract, negoti- that is affordable, secure and doesn’t damage
ating schedules, routes and pricing with the environment’. The company used to
Delta, and recruiting cabin crew from Del- be known as British Petroleum that it cast-
ta’s furloughed employees. At an estimated off for a catchy ‘Beyond Petroleum’ tags.
cost of launching Song at $65 million, it Greenpeace had already pointed out in
was an expensive experiment to make. 2008 that this tag was but a farce with 93
James Whitehurst, the COO of Delta at per cent of the companies investment tied
the time, is quoted as saying it was ‘very up in petroleum and the remainder 2.79
expensive’ to support two brands, and per cent in wind, 1.39 in solar and 2.79
given Delta was undergoing bankruptcy per cent in biofuels.19 The oil leak in the
© 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471 469
Editorial
470 © 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471
Editorial
© 2010 Macmillan Publishers Ltd. 1350-23IX Brand Management Vol. 17, 7, 465–471 471