Michael Porter: Still got it!

University of North Carolina at Chapel Hill
Image by TimDan2 via Flickr

Recently, I attended a University of North Carolina lecture by Michael Porter, Harvard Business School professor, who has made many foundational contributions to the field of strategy.  You can download the slides from the presentation.

Some thoughts from the lecture that continue to apply in today’s landscape:

  • The worst error in strategy is to compete with rivals on the same dimensions — be unique.
  • The fundamental goal of a company is superior long-term return on investment (ROIC)
  • Setting unrealistic profitability or growth targets can undermine strategy

Five tests of a “real” strategy:

  • A unique value proposition compared to other organizations
  • A different, tailored value chain
  • Clear tradeoffs, and choosing what not to do
  • Activities in the value chain that fit together and reinforce each other
  • Strategic continuity with continual improvement in realization

The Bottom Line:

Porter made great points and for many in the audience it was a refresher on strategy 101. The main message at the very end of the lecture was strategy is very hard to develop, but execution is even harder. In organizations today, there are so many agendas largely driven by the dynamics of humans (a concept I reference as lust, fear and greed). As companies develop strategy to get through this hard time, please keep in mind the realities of execution to have a greater likelihood of success.

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New brand in down market: Hilton launches Denizen Hotels

Hilton Hotels Corporation
Image via Wikipedia

Just received an email from Hilton that states they have launched a new life style brand – Denizen Hotels.

Below is an excerpt from the email announcement:

Born modern, with global appeal and a local accent

Denizen Hotels will become a cultural epicentre at each of its destinations, cultivating community within its walls. Eclectic, social and humbly authentic, each property within the brand will be smart in design, cultural in character and sensitive in service delivery. Developed as an international intersection of business and pleasure, Denizen Hotels will redefine how guests stay and play. With innovative check-in technologies and in-room comfort controlled at the touch of a button, Denizen Hotels destinations will harness the best and brightest design and technology to provide a seamless guest experience for the modern traveler.

Denizen Hotels and resorts will range from unique, select boutique experiences to larger destination resorts, creating a unified yet eclectic brand for the global traveller. Active development negotiations are currently underway for resorts and destinations in key cities throughout the globe; including, but not limited to Abu Dhabi, Austin, Beverly Hills (California), Buenos Aires, Cancun, Hollywood (California), Istanbul, Jerusalem, Las Vegas, London, Los Cabos, Miami, Montreal, Mumbai, New York City, Panama City and Washington D.C.

To become a Denizen, visit denizenhotels.com

[Caution: the Denizen website is painful to navigate and slow]

The Bottom Line:

I am an advocate for new product launches even in a down market, but have a hard time understanding how this is a good idea. The concept on the surface has legs based on my experience working in the travel industry. This is definitely a wait and see…

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CPG vs. Service Marketers: skill-sets and executive hiring decisions

Headgear is mandatory in amateur boxing
Image via Wikipedia

Recently, I posted a question on LinkedIn in a effort to get some outside opinion on marketing skill-sets and how that is driving hiring decisions. While I was underwhelmed by the number of answers I received — three in total — I was intrigued by two responses.

My Question: What are the pros and cons of hiring a traditional CPG marketer vs. a Service Marketer? More specifically, what is the rationale you are using to make this decision.

I further referenced the following examples: CPG – P&G, Unilever, Kraft;  Services – iTunes, Scottrade, Netflix. Primary basis in these examples was a consumer-to-consumer apples to apples comparison.

The Responses:

Tough question – The necessity to qualify past performances and the other integral parts of the hiring process can’t be overlooked, but on a macro level this is [my humble opinion].
The traditional service marketer is able to move left to right brain more fluidly, based on the career choice to associate themselves with something that is fundamentally “untouchable”. The career progression of being successful in any one of your service company examples shows a high level of measurement as well as creativity. In my experience, the ability to think on both sides of the brain has become integral to any top performing marketing exec.
Matt Gill, Senior Vice President, Pile and Company- Executive Recruiter for Marketing Talent

Your service examples are really consumer products in that they are tangible goods. However, to answer your question: a traditional CPG marketer is usually working with a tangible product of defined value and generally a defined brand image. He/she is used to dealing with measureable goals and defining strategies against share of market objectives. Tactical tools are known and also quantifiable, such as promotions, packaging, collateral support. A good CPG marketer knows how to use these tools to best effect. On the other hand, a service marketer is selling something that is usually very intangible and tough to measure in terms of cost and value to its intended users. As Matt says, there is more need for both the left and right side of brain to come up with strategies and programs that will be of relevance to the user. In my experience, successful marketers of intangible services can more easily and effectively cross over to traditional product marketing. It is much harder for a traditional CPG marketer to cross over to selling intangible services. – John Fricks, CEO at Frix Group – Marketing/Strategists

The Bottom Line:

Flexibility, versatility are the highlights in favor of service marketers provided by Matt and John. Matt’s point that top marketing executives need the “ability to think on both sides of the brain” is more associated with service marketers. CPG marketers need to demonstrate they can sell what you can not see — a great analogy to selling the value you can create for an organization.

At CMG Partners, we have been conducting qualitative research with a number of top marketing executives across a number of industries and find that those with a “seat” at the executive table are best at working across the enterprise to drive transformation or change that enables growth.

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Service brands: vision of the future?

As a marketer and consultant, I always find it difficult to explain what a brand is to people that are not familiar with the concept (e.g. my mom). This task of explaining things becomes increasingly difficult when the brand is not something you can touch or feel like a service.

Service Brands are populating the landscape today and I feel a strong desire to learn from them as many other marketers should. Why? Because the idea of customer engagement, loyalty, or the idea of employees living the brand are old news to the service brands that get it right. Sure, the work is never done, but they are light years ahead of the consumer packaged goods companies.

I have put together the below diagram as an example of how the landscape of product-to-service brands is complex:

Examples Service Brand Landscape

The Bottom Line:

Three brands to take a page from are: Scottrade, Netflix, and Red Hat.

  • Scottrade has mastered customer service in my opinion. I must admit that I have a couple of accounts with them and within hours of making a major transaction on-line the local office (1 mile away) calls to make sure everything went as I expected.
  • Netflix mastered a simple concept of adapting to consumers lives and taking away the hassle of the rental store and late fees. Simplicity is their virtue. The next chapter of on-line and downloads for movies will likely test them.
  • Red Hat sells “free software”. In the early days, they boxed free software and made it easy to buy. Now they are leading and prospering in the enterprise business software arena and wining more than their fair share. The company’s culture of transparency and openness that is shared with the open-source community which fuels the software is Red Hat’s greatest asset. How else could you actually sell free stuff?

Links of interest:

Chris Grams Blog – Senior Director of Brand Communications & Design, Red Hat

The Official Netflix Blog

Scottrade YouTube Channel

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Super Bowl Ad Brand Survey – Doritos is the winner

The following excerpt is from Comscore’s 2009 Super Bowl Brand survey:

Doritos Scores Highest Net Improvement in Brand Survey

comScore also asked respondents in the post-Super Bowl survey whether the various Super Bowl ads improved, damaged, or left unchanged their perception of the advertised brands. Doritos scored the highest net improvement score of 42 percentage points, followed by Bud/Bud Light (40 percentage points) and Denny’s (39 percentage points), whose offer of a free Grand Slam breakfast to everyone in America on Tuesday, February 3, apparently resonated with the public.

Q: For each of the following brands, please indicate whether their ad during the Super Bowl improved or damaged your impression of the brand in any way?

February 3-4, 2009; n=1,042

Source: comScore Post-Super Bowl Survey

Brand Advertiser

Improved

Damaged

Net Brand Improvement Score

Doritos

46 %

4 %

42 %

Bud/Bud Light

43 %

3 %

40 %

Denny’s

41 %

2 %

39 %

Coca Cola

40 %

3 %

37 %

Pepsi Co.

37 %

5 %

32 %

GoDaddy.com

28%

15%

13%


Mplanet update: lots of video shared by executives

Today at Mplanet the top billed presenters included:

All were well received. John and Mary shared a number of videos and ads worth sharing in one place:

Members Project – American Express

Membership Moments – American Express

Dad’s night to cook -  McDonald’s

Find the Lost Ring – McDonals’s (Olympic social mystery game)

McNuggets Rap (amateur version) – Worth watching for a laugh!

Now the commercial version of funny – McDonald’s

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Sponsorship done right: Fiat and 9th World Summit of Nobel Peace Prize Laureates

Address by Aung San Suu Kyi at the NGO Forum o...
Image via Wikipedia

With a little help from The Wall Street Journal article, I happened to stumble upon the video below in support of the 9th World Summit of Nobel Peace Prize Laureates in Paris, France. Aung San Suu Kyi, a democracy activist, has spent about over a decade under house arrest in Myanmar. She is now the star of a public-service announcement that doubles as an ad for Fiat‘s Lancia Delta car.

Why is this a good sponsorship?

  • It is organic in its execution of the creative – arriving laureates have to be in cars)
  • It is “good” – who could argue with the position of freedom?
  • Activated in a social way through the interactive website sendyourpeacemessage.org that allows people to send along this message and  build a virtual map of support
  • This message has longevity, unlike sponsorships over other 1 time events, this message and advocacy can continue on long passed the event – until the release of Aung San Suu Kyi

Could they have done more… Yes, but we always can — right!

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Gearing up for AMA’s Mplanet 2009, reach out to me

Mplanet 2009 - Orlando, FL

Mplanet 2009 - Orlando, FL

CMG Partners is proud to be an exhibiting sponsor for the American Marketing Associations (AMA) upcoming Mplanet marketing conference. As the AMA puts it, “Mplanet is a one-of-a-kind forum where B2B and B2C marketing leaders and luminaries will share the latest marketing thinking, ideas, innovations and their visions for tomorrow. Plus they’ll offer field-tested strategies and proven solutions that you can take away and put to use.”

We are looking forward to interacting with marketing leaders from leading companies, academic institutions and service organizations at what will surely be a fun, stimulating conference.

For those attending the conference please stop by and visit us at booth no. 55 or contact me to chat.

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