A sense of purpose?

BA's new advertising campaign claims that its motto "to fly to serve" "runs through everything we do". After several years of turbulence, it makes a lot of sense for BA to remind customers about the company's history - and the motto has stood the test of time. But is the claim true? BA's industrial relations have suggested a very different internal culture. One can only hope that the ad is some kind of sacrament - an outward sign of an inner grace, and that as much effort has been put in to building a sense of purpose among BA staff as is now being spent telling customers about it.

If so, BA would be a rare company indeed, according to a recent survey in the US. People were asked about the corporate culture of their organisation, classified into one of three basic types:

1. Blind Obedience ... command and control, top-down leadership and coercion

2. Informed Acquiescence ... Employees follow the rules, policies and procedures ... Managers rely on performance-based rewards and punishments to motivate

3. Self-Governance ... primarily values-based ... purpose and values inform decision-making and guide all employee and company behavior

Around a quarter of leaders identified their organisation as fundamentally driven by purpose and values. However, among employees it was less than 5%. Depressing. Evidence not only that a huge number of bosses haven't got a clue about the organisations they run, but also that purpose and values - the stuff of a good brand - are marginal at best, in most businesses. Dov Seidman, who devised this classification of types of corporate culture (and who commissioned the survey), has argued, convincingly and passionately, for many years, about the potential of corporate culture:

"culture as a conscious, deliberate, long-term strategy can be the key to differentiation, success and significance"

I can only concur. If brands are so important when it comes to engaging with customers, why are they neglected when engaging with employees (or shareholders, or regulators, or media, or intermediaries, for that matter)? It must be the biggest blind spot in business - lying somewhere between the briefs of the CEO, the Marketing Director and the People Director. Like Dov, I've argued for ages about the urgency of this issue. What is so frustrating is that it is easily addressed. What seems to be lacking is intent. Maybe this survey will act as a wake up call?

If your company were a stick of seaside rock, what words would be written through it? Would it be flattering? (Or unpleasant and fattening?)

(Of course, I must declare a vested interest here. Evangelism is one of Tomorrow:AM's core beliefs and I'm always looking for an opportunity to discuss solutions - for example by making brands stickier. You know where to find me.)

Flat pop

I've been a Pepsi buyer ever since I was a trainee sales rep for them (many years ago). But it's harder and harder to find Pepsi on the shelf. What happened to the brand that once "won" the cola wars (when the other guy blinked)?

Pepsi has made so many mistakes:

Range mismanagement
Focusing on PepsiMax - and using it, solus, as a reason to justify stocking Pepsi - implied to retailers that there's no need to stock Pepsi or Diet Pepsi at all. Cue yards and yards of eye level Coke products, and a couple of facings of PepsiMax down the bottom, in the speciality section, near the Supermalt. A great product variant has ultimately done terrible damage to its parent brand, due to inept management.

Product failure
Even 20 years ago it was a barely concealed secret that Diet Pepsi was an inferior product. Nothing - least of all perception - has changed. Maybe that's why Diet Pepsi has only 236,362 facebook likes right now, (as a benchmark, Coke has almost 35m). Pepsi has lacked any meaningful brand architecture strategy.

Circular mis-insight (aka staring up your own fundament)
The classic mistake: define the consumer in your own image. This happens all the time - endless brands are mistakenly marketed to funky-20-somethings, by funky-20-somethings, regardless of what their real consumer base looks like (let's face it, more often than not (s)he is really fat and 40 with 3 kids, but who want to write that on the creative brief?). There can be few better examples than this...

the demographic of people who march to the beat of their own drum, who say no even when it's unpopular, who say yes even when it's an uncomfortable change, who change a hundred-year-old brand icon because the new one is simply more beautiful and fitting for our times.

If that's who you think you are trying to engage, you can hardly be surprised when you don't sell much pop.

Presentation pretension
In the now-infamous Arnell brand redesign document (if you've never seen it, but fancy a laugh, click here) Pepsi's logo was compared to the Mona Lisa and to a Nautilus shell. Yet there was not one mention of shelf standout. Pepsi wasn't even trying to win at the point of purchase.

Management panic
So many changes of leadership - a management carousel - culminating in last week's replacement of the US beverages CEO. These may, of course, be as much symptom as cause.

I was in the salesforce that launched Pepsi Blue in 1996. I remember the scepticism then. But that campaign (the blue Concorde, the blue newspaper letterheads, Pepsi in the space station, and so on) had a few of the fundamentals right - it was all about generating mass-market awareness and it was all about product standout. It may have been a bit thin on content, but these are, after all, carbonated soft drinks. Substance they are not. Whatever; compared to what has come since, Pepsi Blue was genius.

What's the secret ingredient of Coke? No secret at all. It has simply remembered who its consumer is, and what market it is in. That's the real thing.

Going everywhere or nowhere?

Announcement today of the launch of "Everything Everywhere" branded stores - the joint name of the company which owns Orange and T-mobile. Isn't brand architecture a nightmare?

The rationale behind the new brand (until now it has existed as company name, more than as consumer offer) - rather than either maintaining two completely "separate" consumer brands or consolidating into just one is, presumably, that the company is trying to have its cake and eat it. By aligning the brands they hope to, over time, streamline the marketing spend, but by keeping both product brands alive they hope to continue to occupy two places in the consumer's consideration, not just one. There's a real risk that, under one brand, their market share simply couldn't be sustained. We can dismiss the company's claimed rationale, as explained by CEO Tom Alexander last year:

"What I wanted was a company name that did not distract or confuse from two very strong brands"

This doesn't ring true. T-mobile has nowhere near as much real equity as Orange, and anyway, now they'll have to invest in, build and sustain three brands. But who's to say, this strategy might work: there are certainly no hard and fast rules in brand architecture. Still, it remains to be seen how easily the "Everything Everywhere" brand can establish a distinct meaning. As Alexander himself has observed:

"We are going through this revolutionary step in the marketplace where people are getting iPhones, getting Google devices and we have Microsoft's Phone 7 coming into the market soon. It's not just about voice and text. It's about everything else you can do on a mobile phone. People are even talking about apps down the pub"

Quite. I find restaurants using an Urbanspoon app, with Google maps, on an Apple phone, via O2 networks. Do I really have the mental bandwidth for another brand in the mix? It will be interesting to see what they do after the 6 month trial...

Update 09:31 February 15

On Friday Nokia and Microsoft finally announced their anticipated collaboration. Makes a lot of sense. As the key competency set for mobile moves decisively from hardware to software, European manufacturers look suddenly exposed. Nokia's handset market share remains at 30%+, but Apple, with just 4% of the market is making 50% of the profit. Nokia is working hard for little return. It's a good fit: Microsoft is hardly the cutting edge of Silicon Valley, but Windows 7 is their best received platform for many years and anyway, both Apple and Google have begun to take on some of the same negative perceptions of corporate monoliths. So it adds real strength to Nokia's offer. And for Microsoft it pretty much guarantees them some market share which, until now, they've been unable to capture. Crucially, there wasn't an alternative solution for Nokia that made this much sense. The smartphone war is about to get exciting: Apple-iPhone vs RIM-Blackberry vs Samsung/Google-Android vs Nokia/Microsoft-Windows. Place your bets!

#iagreewith[insertyourbrandhere]

Cleggmania shows up a couple of interesting things about the political party brands.

Firstly, it shows how brittle brand reputations can be. Despite all the obvious product performance problems the major parties have experienced in the last few years (from unpopular wars to unpopular expenses claims), they - and the pollsters - didn't see this coming. The polls over the last year or two have been misleading, showing relative share without identifying how fragile (maybe even broken) the relationship between voter and party has become. Have the polls really moved so suddenly, or have people begun to engage with the question differently? Its pretty obvious - even with only a week's hindsight - that the signs were there, but they weren't understood by strategists or commentators.

Secondly, the fevered buzz on websites shows just how far the relationship between people and media has changed, with the media now playing catch-up with popular opinion rather than leading it. Preference has spread like wildfire, fuelled by Facebook, Twitter, blogs and comments. It is the peer-peer response to what has happened that is most interesting, and that is driving events. Ironically, a digital era phenomenon has been triggered by a TV event.

Of course its entirely possible that in a few days this will all have blown over and the political parties will be doing their best to forget it as a bad dream. But it raises interesting questions:

1) What's the relative importance of tracking brand preference versus identifying emerging trends and deeper motivations? Are we sure we're not driving with our eyes fixed on the rear-view mirror?

2) In a much more volatile media environment, is there any longer a role for "incremental" marketing strategies? Are we building plans that might catch fire (+10%), or still trying to "play safe" (+3%)?

Flaky, flakier, flakiest

So Cadbury is no more. As the grandson of a black country confectionery wholesaler I can recite the names of great British chocolate companies - Fry's, Mackintosh, Rowntree, Trebor, Terry's... - all now subsumed by Kraft and Nestle. Much wailing and gnashing of teeth.

But what irked me was not Kraft's takeover bid (perfectly reasonable - business is business) but rather the plaintive argument by Cadbury's leadership that their business was worth so much more. One has to wonder about the investor relationship strategy of a company claiming to have such great prospects but unable to persuade UK insurance companies to continue to hold stakes.

Todd Stitzer argued that Kraft's leadership were not of sufficient quality to deliver on Cadbury's potential. Now we will see. The test of Cadbury's own leadership came earlier - and their share price (before the advance by Kraft) put an absolute measure on their failure to leverage their brand with one of its most important audiences. Cadbury did a lot to revitalise its consumer brand over the last few years, but evidently not enough to revitalise its investor brand. Eleventh hour protestations were much too little, much too late.

People presume that marketing is all about consumers. This should serve as a wake up call. Perceived value applies to every audience. Kraft, it transpires, is the only investor who really perceives value in Cadbury. On that basis it is a worthy winner.

Perception is all

Here's an interesting fact. Between 2001 and 2006 the proportion of new drugs beating placebos in “Phase II” trials (sometimes called the “futility test”) fell by 20%. Only 24 first-of-a-kind drugs were approved by the US FDA in 2008. In 2007, only 19 were approved, the lowest number for 25 years. We might conclude that drug R&D is failing. Yet even some drugs which passed this test previously, are now failing it (Prozac is one example), leading to suggestions that the problem is not the new drugs, but that the placebo effect is getting stronger. The placebo effect bears striking resemblance to the brand effect. Both are the power of perception to influence our actual experience of something. And so the drug companies investigations into placebos reveal some truths for marketers too.

Expectation: The power of the placebo is dependent on the ability to anticipate. Those who expect an effect are far more likely to get it. Alzheimer's sufferers, who can't anticipate the impact of painkillers, need much higher doses.
Competitive set: Different communities react differently to the same placebo, and the impact seems to depend on background culture. For example, in Germany low blood pressure is a widely perceived medical condition (17% of people self report as suffering from it). Brits and Americans, by contrast, are a lot more worried about high blood pressure. In trials of drugs for patients with high blood pressure, Brits and Americans gain far more benefit from the placebo than Germans.
The 4Ps: Packaging and presentation of the placebo play a role too. Studies have shown that antidepressants work better if they're yellow, while red pills are more stimulating and green ones better at reducing anxiety. This hard science is unnervingly similar to the "meanings" of colours ascribed by crystal healers, for whom yellow is optimism/ happiness, red is action/ courage/ vitality and green is life/ well-being. I don't believe in crystals, but I do believe in perception (the fourth law).

Drug companies are desperate to understand this issue so they can design “better” trials (presumably where drugs efficacy will show through). There is also the chance that the trials are right – that many of the drugs on the market are little better than a well presented placebo. The right name, colour, size, shape and packaging in the right environment for the right people may be what is delivering most of the quality of experience. I'm always cautious about the value of consumer research. When we get the results we want, everything is fine (the confirmation bias). When we don't, its tempting to question the methodology. We cannot be sure what hidden factors underlie the results (and most marketing research is a lot less rigorous than drug trials).

But if we view the placebo not as the problem, but part of the solution, things look much more optimistic. From this perspective, brands – even advertising – are integral parts of the product or service itself, helping to reinforce the user experience. And any element that doesn't live up to the core proposition – whether its a tawdry piece of packaging or a mis-aligned piece of creative or PR - doesn't just undermine the ability to charge a premium, it actually diminishes the user benefit.

Next time you're faced with a cynical view about the value (or lack) of marketing, respond with a truly consumer centric justification for brands, rather than the typical brand centric justifications we're so used to. Fact: the brand may, in many instances, be more effective than the product itself.

And in the mean time, now might be a good moment to audit every detail of the brand's user experience, and weed out the bad ones.