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Hewlett & Packard Probably Want Their Money Back

The Wall Street Journal reported (subscription required to see the original article; Google "HP" and "Wall Street Journal" to see related articles) Thursday, March 11, 2010 that Hewlett-Packard (to me the brand is really their acronym, HP, without the hyphen - although the article uses “H-P” as an abbreviation) is launching a massive, $40 million advertising campaign to accomplish several goals:

  1. Accomplish an “image makeover after an aggressive acquisition spree” (Source: authors of article, Suzanne Vranica and Justin Scheck)
  2. Make potential customers aware that HP is not “just a printer company” (Source: chief marketing officer Michael Mendenhall)
  3. Establish that HP has “a real differentiation in personality and distinction,” (as opposed to simply standing for “reliability” and “quality” (Source: vice president of brand strategy Glenna Patton)

Brand strategist Patton was previously with the music television channel MTV. The campaign is being managed by Los Angeles-based advertising company 72 & Sunny, while Interpublic has done the digital ads.

The ad campaign will feature Dr. Dre (the rapper), Rhys Darby (the comedian), and Annie Liebovitz (the photographer), as well as UPS (because it’s a company that uses “HP technology”) to promote the brand in various TV, print, Internet, and radio campaign spots.

Heavy investing will be placed in commercials to air during the NCAA college basketball championships in March and the finale of the Fox TV show “24.”

The company’s 304,000 employees will not be neglected; they will get to see an “internal video crafted to acquaint workers with (HP’s) range of businesses.”

OK—deep breath here. You see how I was trying to stay neutral and factual as I described this mess? Honestly as I read the article closely I felt kind of shocked at all the obvious mistakes that HP—a huge, well-known, strong brand—appears to be making, and at all the money that is going to go down the drain.

Who knows, maybe they are right and I am wrong. But then again, maybe not—maybe HP’s marketing decisions are coming from a dysfunctional corporate culture rather than rational and objective business decision making. Which is pretty scary--$40 million??? In these challenging times???

That amount is 7.5% of what the company made in profit in HP’s last fiscal quarter (according to the article)—and that amount came mostly from “cutting costs so it (HP) can profit by selling lower-priced computers.” Meaning, they’ve been doing OK this year by launching a commodity strategy—not a brand strategy.

That the culture might be dysfunctional is hinted at by the authors when they write that “Putting a single face on H-P may be a tough task. The company has long had a decentralized marketing organization.” This seems very odd since as far as I know, HP has been branded HP for a pretty long time.

OK. So Here are some of the problems I see with HP’s new strategy.

  1. Right off the bat – there is no integrated brand vision. Nowhere in the article does it say what HP’s new consolidated organization is actually supposed to be known for. The only thing we get is that they’ve acquired other companies (so I guess we could look at what those companies do); that they’ve sold a lot of PCs recently (because they’ve followed a commodity strategy); and that their competitors include Cisco and IBM (because the reporters say so). Oh, and there is an ad featuring UPS that shows some sort of thingamajig that HP helped create that “saves a couple of million pounds of paper a year.” Where is the interview with CEO Mark Hurd, the architect of the “make HP less dependent on printing” strategy, who can explain what the company is actually supposed to be doing in the future in a positive sense? In fact, given that the rivals are IBM and Cisco, I can’t even tell whether this is primarily a B2B company or a B2C company? Seems like even they are confused.

  1. Their brand lead reports to the marketing lead. So marketing – short-term shouting without regard to the long-term results – is seen as the overarching function, while branding is – something else? An aftereffect? A nice-to-have? Really, the brand lead should be not only the chief marketing officer, but in fact the CEO of the entire organization. That is the way to achieve long-term brand success on the basis that HP is a premium company. Plus, the article states that the marketing function is decentralized, and that advertising money has historically been given to separate divisions to spend as they wished. Has this changed? If so, how - where is the money now and who has the authority over it?

  1. The brand person comes from MTV and is using MTV style tactics to promote HP. If that choice has to do with the fact that MTV style branding is desired by HP and appropriate for the company, then great. But if they’re just trying to be cool with no basis in audience research, or if they just liked the candidate and are allowing her to do what she already knows in this unfamiliar environment, the results could be quite damaging to a company which she herself admits has a lot of equity in the “quality” and “reliability” area – two crucial attributes for a technology brand. After all – who is going to buy a computer that is neither of these things? And really – why does HP have to have a “personality” if it is supposed to be a very reliable and differentiated high-tech brand? Unless they’re trying to be Google or something…I don’t get it. IBM doesn’t have much personality (well, I guess bankers have a kind of personality, so there is that) and they are a primary rival. I guess what I’m questioning is, shouldn’t HP have at least some B2B input on its brand if its rivals are huge B2B companies?

  1. The company is spending a ton of money to advertise a brand that has not yet been built. WHY? Advertising is like icing on the cake: If you don’t have the cake, how much icing can you really eat?

  1. The choice of basketball and “24” as outlets for the commercials indicate to me that HP sees its target customer as belonging to the same demographic who watches these shows – obviously heavily male, and the rest I’m not sure about (age, etc.) How does this go with Annie Liebovitz? Do the guys who watch Jack Bauer even know who she is? Plus, the photo that accompanies the article shows a very non-Jack-Bauer type (in fact, the polar opposite—someone who looks like a cubicle-dweller) in a TV commercial with a customer, and he’s got that crazy-looking contraption HP supposedly created strapped to his wrist. If the customer is supposed to associate HP with macho qualities, why have this actor star in the commercial?

  1. The employee video is nice, I guess, but it also seems like an afterthought. I mean – really. Three hundred thousand people and all they can do is a video where a comedian makes fun of the company name? (“I thought the logo stood for ‘Have a Printer’.) And give me a break – even that joke is credible. I don’t believe he ever so much as looked at the logo before getting the job to pitch for HP.
I have a few positive brand associations with HP. I liked Carly Fiorina’s persona, though I know people had different opinions about her leadership, and I also am familiar, from a distance, with the company’s brand heritage – when it was still “Hewlett Packard” and Dave Packard and Bill Hewlett were its legendary icons.

My advice to the company, for what it’s worth, is to go back to the basics: Establish an organizational structure in which the brand is central and stands above short-term marketing efforts. Then, figure out where they can make the most money and have the organizational capacity to deliver on those expectations. Then build the brand internally first, aligning the culture to match the offering. And then go public with advertising targeted straight at the desired customer—very focused—with no distractions.

If I were them I would remember that it is people, like the company’s founders and leaders but also the numerous employees who have spent their work lives inside the organization’s walls, who ultimately built the brand—not advertising nor short-term advertisers. Maybe the campaign will get them some notice in Advertising Age, but I doubt it will establish them as a brand, a unified company, or a differentiated provider of products or services.
(Note: The garage picture in this blog is supposedly the garage where William Hewlett and David Packard started HP. It comes from GStreetSightings.com. The caption states: "This is basically where silicon valley (sic) first started. William Hewlett and David Packard started Hewlett and Packard out of a 12-by-18 foot garage in Palo Alto, California. In 2000, HP bought the lot and did reverse renovations to restore it back to the 1939 appearance.")

See and download the full gallery on posterous

Posted via email from Think Brand First

Make A Promise You Can Actually Keep

There is an unending debate among marketers about whether it is better to offer the customer everything, (even if what you offer them isn’t necessarily the best), or only one particular thing that is outstanding.

 

Obviously there are good reasons to choose one or the other, depending on the company and the context, and this is not about taking sides on the issue.

 

The point is that whether you offer the customer everything or just one thing, or something in between, it is critical to set their expectations appropriately.

 

Appropriate expectations are so important to marketing that I am going to put this advice in bold, all caps:

 

BRANDING IS ABOUT SETTING THE RIGHT EXPECTATIONS!

 

Now, is this advice generally followed by marketers? No! Of course not! Which is why marketing as a profession has such a bad name, and why most of us take all advertising and marketing claims with a huge claim of salt.

 

I remember the lawsuit over Papa John’s tagline, “Better Ingredients – Better Pizza.” Pizza Hut filed it; Papa Johns’ eventually won because “jurors were never asked if consumers relied on Papa John's "better" claims when deciding what pizza to buy”.

 

I am a consumer, and when I heard the tagline I did take it literally.

 

So to me, even if Papa John’s won the battle in court, in my mind they lost the battle of brand logic. Not only does the line falsely raise expectations among consumers, but it also shows that their corporate culture supports a certain level of deceit as a means of roping the customer in. In the end, their actual products don’t make a difference – because they have damaged their credibility with a tagline that promises something, and also says “wink wink, you ought to know that we’re not really promising this.”

 

Sort of like when you go to Vegas…are you really thinking you will emerge a millionaire?

 

Why do so many marketers make the mistake of raising customers’ expectations unrealistically? Well, it’s pretty obvious – they want to win market share. What isn’t clear is why, if they are logical people investing an incredible amount of money in advertising (often), they figure that making shallow claims will result in customer loyalty over the long term.

 

Looking at this carefully, the only thing I can conclude is that they don’t!

 

 When marketers engage in this kind of behavior - loudly but misleadingly proclaiming their products and services to be something they are not – essentially one of two (or perhaps both) things are happening.

 

  • They are trying to boost first-time customers, website traffic, or what have you – to win big in the short-term. (Think about it: how long does the marketing firm, or the internal marketing employee, expect their relationship with the client to run? Or from the executive side – are they judged more on 5-year results or 6-month results?)

 

  • The marketer and the client are subconsciously colluding (sounds kind of horrible, but it’s a natural tendency I think) to reinforce the client’s ego about his or her product and not to deal with the reality of what it can and can’t realistically offer the customer.

 

Marketers ought to be careful not to fall into the traps above themselves and must have the strength of character to resist any attempts to rope them in. Because it is not only ethical to tell customers the truth (American Marketing Association Code of Ethics: “Participants in the marketing exchange process should be able to expect that…Communications about offered products and services are not deceptive”), it is also good business to do so. (As they used to say at my former brand consultancy, The Brand Consultancy in Washington, D.C., “The promise you make is the promise that you must keep.”)

 

Ultimately, if you have a good product or service, you can indeed win and keep customers on that basis – especially since there are so many others making inflated claims.

 

Posted via email from Think Brand First

Branding is About Turning a Fantasy into the Truth

When I was younger I used to think that branding was about creating the illusion that Product A is worth more than Product B. The profit in this model stems from the fact that A and B are actually worth the same amount – it is only the image that adds a price premium – and the cost of creating that image is far less than the premium to be realized.

 

I’m pretty sure that most brand consultants had the same idea, and so the pitch to the client was: Pay me X amount of money and I’ll help you make X to an exponentially greater degree.

 

Actually that model worked for a time – specifically a time before there was anything called social media. You built a brand through advertising, the ads created the image, the customer bought into the image, and voila – mucho, mucho dinero.

 

Times have changed.

 

It’s not that fantasy is any less appealing – to the contrary. Brands still have that lure of giving the customer a temporary respite from the frustrations, pains and depressing realities of everyday life. But in today’s society, it is really very difficult for a brand to sustain any kind of illusion. Here’s why:

 

  • The people who work for the company are not loyal employees for life – but rather frequently temporary workers with an eye toward moving on and perhaps starting a brand of their own. Those people talk, and they talk through social media channels – which are more credible than the official “voice of the brand.”

 

  • We now have “the perfect storm” taking place – a confluence between the rise of Generation X culture as my generation takes a firm hold on leadership roles, and the explosion in availability of social media tools that give ordinary people a direct microphone to the world. If a brand had difficulty controlling the message before, it definitely cannot do so now.

 

  • There are just too many breaches of trust in recent years – on a massive scale. It doesn’t seem necessary to produce the usual laundry list, but suffice it to say that we have seen a plethora of trusted people and organizations (and remember that you and your organization are always a brand, whether you say so or not) go down in flames when we all very much believed in them, or at least wanted to.

 

Despite all of this, brands have not gone away. In fact they are still going strong, despite all of the above (see my recent presentation posted at www.slideshare.net/srbizwriter or www.slideshare.net/dannielleblumenthal). Which tells me that the fundamental power of a brand does not lie in the fantasy it provides, although that might be the right starting place. Rather, the power of a brand lies in its ability to deliver a fantasy that is really the truth.

 

Now, that “truth” is not necessarily that the product is better. Rather, it is that something about that company, product or service is better than its competitors—and it is delivered consistently and over the long term.

 

Want a list of brands that actually do this? Start with Starbucks, my #1 favorite brand of all time. Honestly, the coffee is good. But so is Au Bon Pain, Panera (I actually love Panera coffee), Illy, and more. The truth is, Starbucks is not about the coffee any more than Amazon is about having a book-selling website. It’s about the unique atmosphere you will find in every single Starbucks store (with the exception of franchises in airports, I have found…another topic for another day.) The people seem happy to work there and they are nice; the d├ęcor is warm and inviting; there is room to sit, read, and even just look out the window; and it makes you feel good to go there. That is a fantasy that is also the truth—and it is worth it to me (and to a lot of other people, it seems) to pay a little more to be a part of it.

Posted via email from Think Brand First

Did a Culture of Cover-Up Destroy The Toyota Brand?

I’m pretty sure that Toyota has had sufficient time—count it up with me now, a quarter of a century!—to figure out a way to communicate effectively about their cars’ tendency to speed out of control. Yes, it’s true: According to Time Magazine, they first started recalling vehicles for speed problems nearly 25 years ago.

 

Apparently Toyota thought that silence was golden and sat on the issue until they were forced to talk. A Google search on the terms “Toyota” and “scandal” yielded an item from Slate magazine dated November 2009, but quite honestly I don’t remember hearing anything from them at that time.

 

The first notice I took of any issue with Toyota was the first week of February 2010, when Apple co-founder Steve Wozniak went directly to CNN. I remember eating dinner and watching Wozniak tell CNN that he went directly to the media because he couldn’t get Toyota or the National Highway Traffic Safety Administration to pay attention to the fact that his use of cruise control caused his Prius to accelerate all by itself.

 

Today the Huffington Post points out that Toyota is repeating the communication failures of GM’s past by continuing to deny, deny, deny what might really be the source of the problem (the cars’ electronics)—after the story about why the acceleration is faulty has changed three times so far (driver error, badly placed floor mats, sticky gas pedal). As Michael Rose points out in the article:

 

“(The electronics) is a potentially far more expensive fix complicated by the fact that the operations of Toyota's electronic systems cannot be verified independently because they run on proprietary software….This pattern of denial followed by half measures and reassurances that all is well is eerily familiar. Toyota appears to be following the GM playbook on damage control.”

 

For a company that ranks in the top 10 (#8) in the World’s Most Valuable Brands List 2009, I say that this behavior is not only despicable, but unforgivable. Really, can this hugely profitable and valuable international brand not get its act together? Surely if they don’t know what to do they can get some help! But no…we are looking at a brand that is lost in communications la-la land. Which says to me that either 1) they just have a great brand by happenstance (e.g. they’re just a good company that ended up being a great brand), or 2) their culture has somehow changed and now they have lost the ability to manage their brand properly.

 

If you ask me, I would go with explanation #2 as the Wall Street Journal’s reporting implies that the culture did in fact change for the worse when Akio Toyoda took over as company president in 2009:

 

Company executives familiar with Mr. Toyoda's management style say the 53-year-old chief's close involvement on a wide array of issues stifled subordinates, especially midlevel managers and even some members of his top management team. Many of them have opted to stay quiet or filter information so as not to get in the way of what Mr. Toyoda finds important.”

 

There is more like this in the article. The point is, Toyota’s core brand promise is quality, and that promise has been deeply violated because President Toyoda doesn’t want to hear about things that are inconvenient. Nor does he seem to want to talk about them. So silence has settled in at the company and between the company and its most loyal fans – the public. Now that life-threatening quality defects have surfaced, and we learn that they have been kept from us, how can we go back to trusting Toyota again?

 

In my mind, this brand is completely finished. I didn’t even believe that they could do such a thing at first, but when it became clear that they had, I was as upset as if a friend had betrayed me. I can’t even imagine how a car executive could live with the knowledge that they were putting out cars that could send people to their deaths, and then not doing anything to protect them once the defect was known.

 

 

I understand that Toyota has a profit motive. And I understand that they probably have lawyers telling them now to shut up, not say anything, because they can only get themselves in more hot water by fessing up more than they already have. But to STILL be so relatively silent, and on top of it running ads on TV for Toyota vehicles as if nothing ever happened – this is completely beyond me.

 

True, they started out with an apologetic one in February. But just a couple of weeks later we were back to more “nothing ever happened” type ads like this one for the Toyota Sienna.

 

I don’t know who is behind those ads. I don’t know if there is a cross-cultural communication gap. I don’t know anything from the inside, really. But from a purely branding point of view, I think I know exactly what they need to do right now. Pull all the sunny advertisements off the air, get Mr. Toyoda in front of a camera (again), have him apologize (again and again), have him personally console the families who were wronged (and put that on TV and on YouTube), and commit to fixing the problem properly until it’s resolved.

 

It’s the right thing to do and in a social media age, it’s probably the only thing.

 

Because you know what really woke me up to the scope of this scandal? When the co-founder of Apple took his case directly to CNN. He bypassed all the official channels and took the message straight to the people.

 

The bigger lesson from this whole thing with Toyota is that brands must be responsive to the public and must engage with social media in order to do that. It’s not something that they can choose to do or not do. It’s not a situation where they can have a foufy CEO blog that says nothing and means nothing. And it’s not a situation where they can “stay positive” and never engage with the nasty, negative allegations and rumors that swirl around them.

 

Branding in a direct way, through the tool of social media, is something that no “great company” is above and is a skill that someone in the organization must absolutely be empowered to practice. Or else they risk having the angry masses stomp them – even the most trusted of them – to death when they are so much as suspected of doing something wrong.

 

Welcome to brand reality, circa 2010.

Posted via email from Think Brand First

A communicator's nightmare: "Let's just get the word out now...we can worry about the brand later."

Re branding and social media - anyone can write a blog, but very few can build a brand.