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Read Larry Light’s Latest Forbes.com Piece “I’m Ford And I’m Proud”

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From the piece: “Ford Motors Company is under a microscope these days. James Hackett, CEO, is continually being scrutinized. Wall Street finds his Ford vision and strategy inscrutable. So, in order to make itself clear, last October Ford introduced a new campaign. The message is “Built Ford Proud”. It is a self-praise message highlighting Ford’s 115-year history of commitment to building great vehicles and communicates Ford’s ambition to lead in the future through smart vehicles for a smart world.”

Read the rest here: I’m Ford And I’m Proud

COCA-COLA’S STRATEGIC DEXTERITY

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Right before Labor Day, Coca-Cola purchased Costa Coffee. If you have been to the UK, other parts of Europe, or Asia, you will understand that Costa Coffee is the second-largest coffee shop chain in the world, just behind Starbucks. In the UK, Costa has 2,500 stores. The brand has 3,800 stores in 32 countries.

This purchase is yet another segue away from a cola-uber-alles approach to a beverage strategy that better reflects people’s changing tastes. According to Barron’s, Coca-Cola’s sales declined every year since 2012, while coffee in all of its forms, is still strong. Coca-Cola is recognizing that continuing to focus on what worked in the past is not necessarily a winning strategy for today.

Coca-Cola ceded coffee primacy to others such as 1) Nestlé (owner of Nescafé) that cemented a deal with Starbucks to sell the brand’s teas and coffee drinks globally, and bought the boutique brand Blue Bottle and 2) JAB, a European holding company, owns Peet’s Coffee, Stumptown, and Keurig Green Mountain. From a brand-business standpoint, Coca-Cola is working to reverse behaviors that are strategically insensitive. Strategic insensitivity is a result of failing to pay attention to changing customer needs, problems, beliefs, and values.

There are legitimate concerns that Coca-Cola is not capable of managing actual brick-and-mortar stores. The firm’s strengths are elsewhere. Additionally, there are concerns that buying Costa gives Coca-Cola a lot of global real estate, an area in which Coca-Cola has not played.

These arguments overlook all the experience Coca-Cola will receive through its purchase of Costa. Costa knows a great deal about how to run coffee shops. Unless Coca-Cola decides to dismiss a raft of Costa executives, these concerns are slightly misplaced. It is true, that actually owning and running coffee shops is not something Coca-Cola is known for, however, there are few brands that work with restaurants better than Coca-Cola. When Coca-Cola works with big customers such as McDonald’s, a team is embedded in the McDonald’s offices. The team knows what is going on with customers, with customers’ needs, and most specifically, the team is on top of the logistical and service requirements needed at all the McDonald’s restaurants.

Coca-Cola, whatever its problems, is showing that even big, embattled behemoth brands can exhibit strategic agility. Coca-Cola is revealing that it is open to and able to evolve when disruptions happen or business, environmental, political, geographic circumstances alter the landscape. Coca-Cola is fighting against the arrogance of success by expanding its horizons into more popular beverage areas. By changing its perspective on the beverage landscape, Coca-Cola is leading with strategic dexterity, being resolute and responsive, disciplined and dexterous, at the same time.

Even though investors are on the fence, unconvinced that Coca-Cola is making the right move with this expensive acquisition, one investor group executive told Barron’s the following, “I continue to remain Neutral on Coke, but I like when companies continue to diversify their core businesses, and this is another turn in the company’s long history. The Costa acquisition is a bold move by Coke as it continues to expand outside of its core beverage business and increase its retail presence.”

Larry Light Points Out “Why Your Favorite Healthy Snack May Not Be Healthy?” In Forbes.com

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As the FDA is nearly about to address food and beverage labeling this coming summer, how brands can use the term “healthy” may be redefined. Read Larry’s latest Forbes piece to learn Why Your Favorite Healthy Snack May Not Be Healthy?

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Photo Credit Mike Mozart under CC License

Read Larry Light’s Latest Forbes.com Piece: Is The Mass Middle Of The Market A Marketing Death Trap?

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Is the mass middle of the market a marketing death trap or is it a marketing opportunity?

Arcature CEO Larry Light explains in his latest piece featured in Forbes.com.

Read it now: Is The Mass Middle Of The Market A Marketing Death Trap?

A LOVE AFFAIR WITH MARKETING NUMEROLOGY

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A walk through the market research trade press is a frightening experience. The articles are paeans to technology and proprietary methodologies. If we can quantify something, it must be actionable. It is a love affair with marketing numerology.

Market research has split into two groups: the academics who publish statistical articles in technical journals. (To read these, you need a degree in statistics and familiarity with an obscure academic language.) And the marketing numerologists, who believe in some kind of magical relationship between their mystical techniques and some measure of marketing effectiveness. In both cases, producing numbers is the goal. We learned as children that correlation does not mean causality. However, the numerologists love correlations.

Data hyping by the numerologists underlies the poor research reporting we regularly see. In one recent article, on the relationship between video ads on social media and purchase, the researchers concluded that all brands should use video ads. Why? 54% of the sample who watched a video ad also went to the brand’s website. The researchers exclaimed, “Yes, that’s over half.” True, but only by 4 percentage points. And, it means that almost half, 46% did not. In other words, the odds that a viewer of the video ad also bought the product are the same as the flip of coin. It does not follow that viewing a video ad increased the probability of a purchase. It could also be the other way around. Or, one could have nothing to do with the other. Just because you can produce a number does not make it a relevant insight. The researchers were ecstatic that 28% of respondents watched the video ad and then claimed to buy the product.

Just because it is based on numbers does not make misleading, misinterpreted observations actionable. If we produce a number, it must be true. Or, if we produce a number it must be news. Much market research is merely observation of the obvious. In an article on finding the best ways to reach Millennials, the first recommendation based on data, was “Don’t Overgeneralize.” Really? Supported by data, they observe that all Millennials are not the same age. People born in the mid-1980s are at least 10 to 12 years older than those born in the mid-1990s. Wow! What an insight!

The battle for numbers is supported by the battle for proprietary models and methods.  One firm claims that it provides unmatched sensory testing including eye tracking. Another states that it generates ideas from the “squeezing” of behavioral science and cultural anthropology. There is fascination today with something called neuromarketing. Neuromarketing is the application of neuroscience to marketing research to study our sensorimotor, cognitive, and affective responses to marketing communications. Neuromarketing uses technologies such MRIs EEGs, and Steady state topography (SST) to measure brain activity changes in physiological state (biometrics – heart rate, respiratory rate, and galvanic skin response), and something called facial coding (did your face show emotion when you  saw the pizza). Market researchers are fascinated with the latest new technology, the latest new equations, and the latest new, bright, shiny methodology.

Not everything that is important is quantifiable and not everything that is quantifiable is important. Some numerologists at Facebook have created “trustworthiness” measure that will rank news feeds. There has already been withering criticism of this measure. Furthermore, Facebook says they are also developing a metric to help advertisers assess brand success on Facebook. When an analyst questioned Mr. Zuckerberg about the metric, he responded:

“The thing that we’re going to be measuring is basically the number of interactions that people have on the platform and off because of what they’re seeing that they report to us as meaningful.”

As Bloomberg commented, “Good luck putting that into a spreadsheet.” And, “It is remarkable that a company as data-driven as Facebook would gauge success based on qualitative user surveys.” Given the desire for a magical number, Facebook must have hired a group of marketing numerologists.

The love of numbers as evidence of truth, has led to an over-reliance on numbers however they are derived. Marketing numerology is contributing to an over-reliance on numbers over judgment in making creative decisions. People interpret, question, evaluate, simplify, clarify, examine, illuminate, imagine, create. Decisions should be informed by evidence. But, the evidence does not make the decision. People do.

DITCHING THE DARK SIDE, BOOSTING OUR BEST SIDE

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Social media is the premier tool for The Age of I, where people want to be seen as individuals while at the same want to belong to identifiable groups. Social media allows people to communicate their individuality to anyone, anywhere, any time. At the same time it connects people to like-minded others. It embraces individual differences. It fosters communities. Social media opens doors to new ideas. It reinforces familiar ideas. It gives the voiceless a voice.

However, social media has a dark side. Social media can distort the truth while eroding trust, as Facebook is now aware. Marketing has an opportunity to play a role steering social media away from the dark side by promoting our best side.

Facebook has finally recognized that its laissez faire attitude to news postings has created a swamp of suspect stories that torpedo truth and trash trust. As helpful as Facebook can be in our lives, it has a tendency to devolve to the dark side. Facebook believes it needs to address this now, especially since the US will be in election mode for House and Senate seats in 2018.

Facebook is a social media force of galactic proportions. Although Mark Zuckerberg is neither Darth Vader nor obi Wan Kenobi, the good over evil tension of Facebook is a battle worth having. Mr. Zuckerberg believes that by providing a trust metric, Facebook will be able to include trustworthy news sources while blocking less trustworthy sources. We can only wait to see how this turns out. Facebook is asking Facebook users to provide the judgments that create the trust metric rather than allowing the brand to become the arbiter of truth. (There is already serious blowback regarding this metric. For example, The Atlantic and The Shorenstein Center on Media, Politics, and Public Policy have recently expressed concerns.)

Brands no longer have the option of sitting by and waiting for the dust to settle. Brands need to evaluate how they can bolster our best intentions. What can brands do to bolster our better intentions?

Become part of the solution for customers’ important issues

Customers prefer brands reflecting values that match their own.

Behave predictably

Erratic behavior and changing beliefs and practices confuse customers and dilute trust. Consistency breeds comfort.

Provide information

If you do not, customers will find it anyway. Social media is an image-maker or an image-breaker.

Respect the customer

Communications that talk down to, or demean customer’s thinking may be funny and witty, but you may be insulting someone.

Seek out credible third-party testimony

Borrowing credibility works: peers and influencers matter. There is a positive halo effect.

Show you care

Whether globally or locally, find issues that show you care about and then don’t spectate, participate. You are what you do.

Speak up

Do not stay silent. Silence may be golden but only in the library reading room. Be proud out loud.

Be visible and up front

Do not hide from the debates. Don’t obfuscate. Keep it simple. Be clear. Confusion leads to discomfort. Stand up for what you stand for. Customers want to know the simple truth. Someone once wrote, “ A secret is a private truth and that is an acceptable definition of madness.”

 

CENTRALIZED MARKETING IS OLD-VIEW MARKETING

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Brands that control all marketing through centralized command and control are committing brand suicide. True the world is becoming more global. However it is also becoming more local and more personal at the same time. The challenge is how to market at the intersection of increased globalization, increased localization and increased personalization. Insisting that the center knows best and imposing its will on the world is a formula for failure. Global standardization of marketing was once the accepted dogma. Theodore Levitt, a Harvard professor, popularized global standardization in 1983. With few exceptions, the attempts to create monolithic, standardized brands based on a homogenized view of customers were not effective. The rationale was on reducing marketing costs and not on increasing marketing effectiveness. The simplistic marketing efficiency approaches from the 1980’s are even less relevant today. It is a symptom of organizations that place cost management over brand management.
The global marketing view of the 1980’s was to have one standardized, global brand for a globally standardized product supported by standardized communications to a standardized customer. Establish a centralized marketing structure in the head office and dictate directions to the world. Local satellites existed only to execute the global directives. It was cost efficient. It was very popular. It was wrong.

Professor Levitt fervently believed in global homogeneity that would blanket the planet generating power and profitability. However, as efficient as the globalized, centralized, homogenized approach was, it fostered an environment of “lowest common denominator” thinking where ideas are acceptable everywhere, and especially relevant nowhere.

As the 1980’s transitioned into the 1990’s global marketing evolved to make the management of global brands more sensitive to local/regional cultures. Organizations searched for ways in which brand promises could be both globally standardized and locally relevant. The new mantra was “Think Global. Act Local.” (TGAL).

In theory, TGAL was the best way to build, and broaden, global brand appeal in local/regional ways. However, appeal of centricity often prevailed over local marketing relevance. TGAL became just another way to keep the real power at the center. TGAL came to mean that the center was responsible for the important strategic thinking and creativity. Then, the center handed over the thinking and creative template to the regions for execution. The regions were accountable for results but not really responsible for the marketing strategy to produce those results.

The regional marketing management executed the strategy dictated by the center. If a strategy failed, the regions blamed the strategy dictated by the center. It was wrong for the local market. The corporate center would blame the failure on poor local execution.

So what happened? Over time, the tensions between the regions and the center became intense. In the January 28, 2017 issue of The Economist discussed this approach as “decades-old.” Globally centralized, standardized, homogenized marketing is outdated. As the world becomes more global, local and personal, the failure to respect and reflect local wants and needs, centralized marketing is less effective. As The Economist pointed out, “Many industries that tried to globalize seem to work best when national or regional.”

Global brands have to contend with a three-way tug of war: how can a brand maintain its global, standards while reflecting local relevance and complementing personal differentiation? McDonald’s is one of the world’s biggest global brands. Yet, its marketing is becoming increasingly localized and personalized. The menu not only varies from country to country. It also varies from region to region within countries. A global hotel brand can have global safety and cleanliness standards, a common global reservation system, common global brand identification, while localizing the restaurant menu reflecting local culture, and personalizing the guest experience by customizing the in-room bar, the types of pillows and the newspapers you prefer.

Excessive centralization and standardization is yesterday’s marketing approach. Of course, brands must have global standards of coherent brand commonality. But excessive centralization aiming for reduced costs and increased efficiencies is slinking back into a cost-cutting cave that has no relevance for today. It is a formula for failure. 
Fractionalization, personalization, and localization have shattered the comfort of standardization. Globally standardized marketing is an outdated anachronism in today’s business environment.