Category Archives: Cases

Getting It: Chevrolet and Volkswagen

The contrast in behavior between two car companies over the past several  months could hardly be more illuminating.  As reported by DetroitNews.com, the marketing heads of GM directed their internal staff to stop referring to cars using the Chevy nickname and instead use the more proper Chevrolet label.   It smacks of  a guy I knew named “Ox” who tried to convert everyone to calling him Alex after he graduated college and got his first job in banking.  He thought it was more fitting to help him climb the corporate ladder.  It distanced him from his old friends and made him less interesting to his new ones. After all, who would you rather have watching over your money, Alex or the Ox?  GM’s attempt to backtrack a couple days later was only slightly less baffling.  They explained that because they sell more cars internationally now than domestically, they thought it better for consumers outside the U.S. to learn their proper name first before learning the nickname.  That defies the way nicknames really work with both people and products,  if Paul David Hewson (Bono)  and Coca-Cola (Coke) are any indication.

Compare that approach to Volkswagen.  They’ve embraced the Punch Dub game that kids started around spotting a Volkswagen.  When I saw their ads shortly after my kids starting punching each other in the arm every time they saw a VW drive by, it was both endearing and smart.  It made those familiar with the game feel like insiders, and those unfamiliar with it curious. Every marketer strives to integrate their brands into the popular culture, and they handled the opportunity deftly.

The contrast comes down to a simple definition of a brand. While marketers work hard to foster brands, a true brand is ultimately owned by the consumers. It is people’s perceptions and feelings that define a brand. VW took what people were doing around the brand and embraced it, GM pushed it away. Maybe GM took their part in popular culture for granted because Chevy has been around so long.  It might have been easier for VW to see the relatively new phenomenon as a gift in a way that GM could not. Still, the fundamental mistake was in a mindset that misunderstood the fundamental nature of brands.

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The New Brand Building Materials

toolsInterbrand’s annual survey of the top brands in the world always creates some interesting discussion around how best to define brands and their value.  By a proprietary (i.e., fuzzy) methodology, they attempt to put a financial value on the brand. Many of the most valuable brands near the top of the list are the ones you’ve come to expect: Coca-Cola, Microsoft, McDonald’s, Disney, etc.

But there is a different cut on the rankings that reveals a profound statement on the current state of brand building. There are only four brands ranked in the top half of the list in 2009 that were not on the list at all five years ago.  Based on this rise from nowhere to top 50 in the world, you might characterize these as the companies that did the most brand building  in the last five years. These four brands are:

  • Google (#7)
  • H&M (#21)
  • UPS (#31)
  • Zara (#50)

 As you look at these all-star performers, I’d ask marketers to consider one question: what do you remember about their advertising campaigns over the last five years?

You may remember more than a few things for UPS, and it is fair to say they have been active and heavy advertisers in the past few years.  But it is quite a different story for the others. Google sells ads instead of buying them. For Spain-based retailer Zara, it is a bit of a trick question because they pride themselves on their “zero advertising” business plan. They built their business on “fast fashion” by which they can design, manufacture, and ship to a new product to shelf in less than three weeks. H&M is also a fast fashion brand, that does some promotional product advertising, but attracts most of its ardent followers from a never-ending cascade of new fashions that promises a whole new store every month.

We hear lots of stories of smaller brands that have used innovative marketing approaches to build a successful niche or score a quick hit. These companies tell an even more powerful story of becoming among the most valuable brands in the world while using few of the techniques we’ve come to associate with megabrands.

So as some ponder the question about what kind of advertising they should be doing — broadcast, online, mobile? — they might also ponder the question if they should do any advertising at all.  To be realistic, advertising is and always will be a powerful tool. But it is no clearly no longer the default tool for becoming a major consumer brand.

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