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War in the board room - Synopsys
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War in the board room - Synopsys

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Al believes the primary function of a marketing organization is to position the brand. …

Al believes the primary function of a marketing organization is to position the brand.

He also believes that Marketing is 90% strategy and 10% execution unlike Jack Welch who said “You pick a general direction and implement like hell.”

Improving product and cost cutting can not be marketing strategy. They are everyday business practice.

To enter a new category, new brand is a better solution instead of Line extension.

With right product, right name, the right target audience, the right position and right timing, most marketing program bound to work.

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  • 1. War in the Board Room Al & Laura Ries. Synopsys by Michael Hong
  • 2. Left Brain Management vs. Right Brain Marketing Verbal Logical Analytical Visual Intuitive Holistic Management argues for ideas and concepts that are plain “common senses” Marketing argues for ideas and concepts that are “paradigm shifting” “If we can get employees to work one hour more per day, our productivity will increase by 10%” “If employees accept the company’s vision as their personal vision, our productivity will sky rocket.” 0
  • 3. Management deals with reality. Marketing deals in perception Marketing thinks perception is reality but management thinks reality reflects perception. Changing reality does not necessarily change perception. • Why has Walmart failed to sell high fashion clothing? • Why is Volkswagon withdrawing Phaetons from the US market? 1 Pepsi Tastes Better! The “New & Improved” Authentic Taste is Better! Phaetons Starting Price at $64,600
  • 4. Management concentrates on Product. Marketing concentrates on Brand Pepsi tastes better but Coca-Cola is a better brand. Coca-Cola outsells Pepsi in the US by 50% AN ENGINEERING ICON SLIPS Quality ratings for Mercedes drop in several survey -- WSJ Feb 4, 2002 MERCEDES HEAD-ON COLLISION WITH QUALITY SURVEY --Business Week July 21, 2003 MERCEDES HITS A POTHOLE Owners complaints are up. Resale values are down. --Fortune, Oct. 27, 2003 308% 1993-2007 2 Strong brands can withstand negative publicity better than the weaker ones.
  • 5. Understanding Category. 11 TV CRT Projector Flat Panel OLED LCD Plasma LED Size Price 3D Smart Family or Personal? People think of category first before a brand. A category for a customer may be different then a category for management Movie or Sports? Currentoutdated
  • 6. Management wants to own the brand Marketing wants to own the category Strong brand usually dominates the category but when the category melts down so does the brand. Management prefers using the existing brand equity for a new category while marketing wants a new brand for a new category. Local Consumer Telecommunications National Telecommunications 3 If Laptop PC is one-stop-solution, why do we need Tablet PC?
  • 7. Management demands better products Marketing demands different products Becoming a leader by creating a ‘better product” or a “better service” almost never works. • Burger King versus McDonalds • Energizer versus Duracell • Pepsi-Cola versus Coca-Cola • Newsweek versus Time Innovation by being the first in the category is better than innovation to outpace your competitor. 4 VS VS VS VS
  • 8. Management favors a full line Marketing favors a narrow line Full line strategy takes away brand building effort. 5 512,766 VS Jetta Rabbit Passat Phaeton Golf Eos New Beetle 221,760 5.6% MS 6.8% MSVS
  • 9. Management tries to expand the brand Marketing tries to contract the brand Passenger or Cargo? Business or vacation destination? International or Domestic? Business class or Coach class? 6 YES TO ALL! Business destination only Coach class only Domestic only Focus on selected opportunities Most companies went bankrupt except SW Airlines.
  • 10. Management strives to be the “first mover” Marketing strives to be the “first minder” 7 In a new category, the first brand that gets into consumers’ minds is almost always the winner. Panasonic was the first mover to sell Flat Panel TV in 1997 but not in the mind of consumers. “Does the name of Panasonic had a chance to become the generic name for the Flat Panel TV category?” Samsung is #1 with 18.7%. #2 is LG with 13.1%, #3 is Sony with 10.3% and #4 is Panasonic with 7.9%. Lexus was NOT the first Japanese luxury car, Acura was. Acura later introduced cheaper car tarnishing their premium image while Lexus steadfast with premium position.
  • 11. Management expects a “big-bang” launch. Marketing expects a slow takeoff. 8 Trivial products or ideas might take off rapidly, but products that end up changing the way we live or work take longer to gain acceptance. 2002: 345K 2003: 1,306K 2004: 4,540K 2005: 22,497K 2006: 39,409L 2007: 51,630K Lego brick was first introduced in 1958. 140 employees. Lego reached over 9,000 employees worldwide in 2000 In the first two years, Wham-O sold 100 million hula hoops. A few years later, the fad was over.
  • 12. Management targets the center of the market. Marketing targets one of the ends. Taste and Calories. “Ideal” Spot.Real Sweet Spot. Real Sweet Spot. Excellent Taste Zero Calories 9
  • 13. Management would like to own everything. Marketing would like to own a word. 10 Delivering a good brand experience isn’t enough. The end result of marketing articulates brand experience into a single word. • People need help sorting out names and concept. Driving Luxury Prestige Safety Reliability Youth Management Marketing Economic Finance Technology
  • 14. Management deals in verbal abstractions. Marketing deals in visual hammers. 11 UPS deliver more parcels to more people in more places Synchronizing the world of commerce Management Talking Visual Talking Boston ChickenBoston Market Marketing- Communications Advertisement Business description leads to complex verbal abstractions. Use the words that are down to earth and visually strong.
  • 15. Management prefers a single brand. Marketing prefers multiple brands. 12 SuperToyota 90% of new products are bound to fail. To reduce the risk, management prefers line extension to enter the market. To enter a new category, a new brand will serve a better opportunity to capture market share. Mainframe computer? Personal Computer? Internet Search? Successful Not so Successful
  • 16. Management values cleverness. Marketing values credentials. Credential reinforces what the brand stand for. Cleverness may attracts attention without brand truth. “Engineered like no other car in the world” – Mercedes “King of the Beer” – Budweiser “Be all you can be” – US Army Credential Which do you think works best for Coca- Cola? “Polar bears” “Always.” “Enjoy.” “Life tastes good.” “All the world loves Coke.” “The Coke side of life” “The Real Thing.” Credential-less “Relax..it’s FedEx” – FedEx “We know why you fly” – American Airlines “Army strong” – US Army Benetton continue to loose business in spite of clever ads.
  • 17. Management believes in double branding. Marketing believes in a single branding.. 11 Double branding means confusion, not a solution. Brand names that don’t serve a real function ultimately obsolete.
  • 18. Management wants to communicate. Marketing wants to position. 11 Advertising is not communications; advertising is positioning. Advertising is to establish and reinforce a position in the prospect’s mind. Driving Luxury Prestige Safety Reliability Chevy is ?
  • 19. Management wants customers for life. Marketing is happy with a short-term fling. 11 Children Teens Young Adult Adult Business opportunity does not improve with chasing after current target. New brand might work better for the new category (Segment) In spite of chasing after teen market for the last 10 years, sales remain relatively flat. 1998 $1.9M to 2007 $2.0M (Adjusted for inflation)
  • 20. Management loves coupons and sales. Marketing loathes them. 11 Coupon is not a marketing strategy. It’s a crutch. Once addicted, reversal is near impossible. Coupon should be treated like a nuclear bomb. Use it with caution. Once coupon become main driver of sales, it’s impossible to count • Customers who would have purchased anyway without a coupon • Customers who didn’t buy because they didn’t have a coupon • Damages to the brand (Macy’s premium brand image has been tarnished) Coupon Driven Coupon-less Leverage Manufacturer’s coupons
  • 21. Management tries copy the competition. Marketing tries to be the opposite. 11 Most management uses the same strategy and they just want to do it better. Best marketing strategy is to be “different” or “opposite” Coke has been around for a long time. Coke is your parents drink. Pepsi is for new generation! McDonald wants to sell Premium coffee. McDonald wants teen market. What will happen to Happy Meals? Ronald McDonald, the sacrificial lamb Germ killing Medicine Fresh Breath
  • 22. Management values equity in name. Marketing values position enhancing name. 11 As clichéd as it may sound, I can’t believe It’s Not Butter is one the best selling margarines in America. “It must taste like butter, ” thinks the consumer, “otherwise they wouldn’t used that name.” Ralph Lauren or Ralph Lifshitz Name changing from NYNEX to Verizon removed bad reputation on customer service by NYEX
  • 23. Management bent on constant innovation. Marketing is happy with just one. 11 Innovation is not necessary a marketing strategy unless innovation itself is the brand position. Innovation does not last forever. Competition will catch up soon or later. OR What consumer will buy comes down to the brand they believe in.
  • 24. Conclusion. 11 Al believes the primary function of a marketing organization is to position the brand. He also believes that Marketing is 90% strategy and 10% execution unlike Jack Welch who said “You pick a general direction and implement like hell.” Improving product and cost cutting can not be marketing strategy. They are everyday business practice. To enter a new category, new brand is a better solution instead of Line extension. With right product, right name, the right target audience, the right position and right timing, most marketing program bound to work.
  • 25. Michael Hong Marketing Consulting Michael is a Senior Marketing Management professional with exceptional skills and experience in e- Commerce Marketing. Michael has 20 years of marketing and marketing communications experience at corporations such as AT&T and LG Electronics. He is a creative marketer and a thought leader in digital marketing and multicultural marketing industry. He spoke at numerous conferences such as Internet Retailer and the eM9-Marketing Conference. Specialties: Advertising Strategy, Planning and Execution, Digital Marketing (SEO, SEM, Social media, Word-of-Mouth), Direct Marketing, Multicultural Marketing, B-B Marketing Education: Cornell University, Ithaca, New York B.A. 1985 School of Art, Architecture and City Planning 2 Brookstone Dr. Boonton Twps., NJ 07005 (C) 201 841 9659 njmikehong@yahoo.com Thank You

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