Stuck in the middle

In 1982, I participated in my first new car launch, creating advertising for the Pontiac Fiero (an auspicious beginning, no?)

The Fiero was conceived in GM as a noble idea: a two-seat sports car with a space frame, composite body panels, a well balanced mid-engine design and styling that, if dated, didn't suck as bad as many of the other cars GM was producing at the time. By the time it reached the market, however, the scheduled V6 was replaced with the old Iron Duke 4-cylinder engine as GM's marketing geniuses thought it would be best to position the Fiero as an efficient commuter car.

The initial product was so bad, that by the time they gave it enough power and improved the styling, it was dead in the water. A good car killed in its infancy by bad positioning.

I tell this story because I'm afraid Honda is making the same mistake with the CRZ. There's a lot of buzz around the car and it looks great. But what is it really?

Anyone looking for a small sports car will be disappointed with the mediocre performance.

Anyone looking for a highly efficient hybrid will be disappointed with the mediocre mileage.

It's a classic case of trying to please everyone and ending up with a product no one will be happy with.

Smart phone. Dumb Ad.

Microsoft just launched the new Windows 7 OS for smartphones with this ad.

It has some funny scenes, is incredibly well produced, and is based on a very relevant universal insight: people are obsessed with their smartphones. 

But what is the spot really saying about Windows 7?

My take is the product benefit they're trying to communicate is "Windows 7 is a faster OS so you can get to the stuff you want and then get back to your life." Fine. There's just one problem.

People spend all that time with their iPhone, Droid or Blackberry not because they're slow and can't deliver the content they want. People are mesmerized by them because the content delivery system is so good, that in some cases it's better than real life.

What I really take away from this spot is that Windows OS is so ordinary that there's nothing worth obsessing over, which isn't surprising. 

After all, it is from Microsoft.

Is big bad?

Over the past year, I've written a few posts railing against the stupidity of big companies like Miller/Coors, Walmart, General Motors, Kraft, Apple and Toyota (some of which I've done work for). So you might think I have a thing against big companies. Actually I don't. I have a thing against bad companies, or at least poorly run ones.

I have a thing against companies that don't have a purpose other than to make money.

I have a thing against companies that don't care about the communities that support them.

I have a thing against companies that treat their machines better than their people.

I have a thing against companies that think innovation is adding a new flavor or widget to their line.

I have a thing against companies whose leaders spend more time with bankers than customers.

I have a thing against companies that cover up and blame rather than apologize and fix.

I have a thing against companies that think better advertising will fix everything and you can only get that by changing agencies.

I have a thing against companies that think they can always get it cheaper someplace else.

I have a thing against companies that act like bullies.

It's hard for a company to have these traits when it's smaller and there are few layers separating its leaders from customers, channel partners and suppliers. If small companies act like this, they won't be around very long.

It's only when companies get big do they feel entitled and entitlement leads to arrogance, which in the long run is a lousy business strategy.

Walmart Rules

I heard about this about six months ago from a friend who works for a company that supplies a lot of paper to Walmart and I was shocked then. But here it is in black and white pixels on Businessweek.com.

Walmart is asking its suppliers to provide them with the names of their raw materials suppliers so they can consolidate buying, increase their clout and reduce the cost of raw materials going into the products they sell.

Now, since Walmart's sworn mission is to offer the lowest prices always, this seems logical. Help our "partners" lower their costs so we can offer lower prices to our customers. Great.

Actually, maybe not. Lets use their potato scenario as an example. Lays (Pepsico) decides to go in with them and negotiate with a single supplier for cheaper potatoes. That leaves two options for the potato grower that Lays was using:

1. Cut their operating expenses by reducing their workforce, reducing wages, reducing benefits, cutting corners or all of the above, while somehow increasing output.
2. Don't cut expenses and go out of business because they lose their largest customer.

In addition to that, Lays loses some control of the quality of the raw materials they buy, so customers see less difference between their product and the Walmart store brand. Lays' sales suffer, not just in Walmart, but in every grocery store and mass retailer. 

Now if that happens with all Pepsico products sold at Walmart (Doritos, Pepsi, Mt. Dew, etc) pretty soon, analysts are issuing warnings about Pepsico, their stock falls, production facilities close, there are layoffs at headquarters and we're all eating Walmart brand potato chips.

Frankly, that's not a future I'm looking forward to.

Why branding is hard

Great brands know what they stand for and they grow by being the best at who they are.

They don't chase every fad.

They don't kowtow to every customer's whim.

They don't care what the market thinks.

They don't copy their competitors.

They don't enter categories where they don't belong.

They don't forget their past.

They don't lose sight of the future.

They don't wait for research to tell them what to do.

They aren't perfect, but they admit when they make mistakes.

They aren't greedy.

Great brands know that values are more important than margins.

Great brands take the long view.

Great brands never compromise.

That's why there are so few great brands.