Monthly Archives: April 2009

The End of Pontiac: A Cautionary Tale Of Brands That Were Loved Too Much

CNN just reported that Pontiac will end. This is further evidence of the frequently reported fact that that GM has”too many brands”. Which leads me to wonder how and why that could happen.

GM is a classic house of brands:

The GM brand portfolio

The GM brand portfolio

Today (prior to the demise of Pontiac), GM offers a total of 101 vehicles across a collection of 8 brands. Toyota, the world’s biggest car company, has 3 brands (Toyota, Lexus, Scion) and 75 vehicles, 59 of which are under the Toyota brand. Lexus is a fairly limited luxury brand, and Scion is a tiny niche brand, so the Toyota name stands out loud and clear. Is that a factor? Was it  sibling rivalry run amok, with no real parental control? 

I recently had the very good fortune to speak to a former GM senior marketing executive, and he provided support for my hypotheses and gave me additional background on how and why GM brands became a problem rather than an advantage.

GM was essentially formed as a holding company, which is the way that a house of brands is built. Historically, the individual car companies had a great deal of autonomy, which was balanced by strong central planning from the finance perspective. This worked quite well while the US was dominant in the auto industry. Over time, as the business became more competitive, GM adopted professional product management practices.

Branding at this point was at the the product line level (e.g., Camaro, LeSabre), not the general car company. With 50 or 60 different product brands clamoring for attention, it was confusing for the consumer and the sales people. Enter Toyota, and its simple message of quality.

Needless to say, the center could not hold, and the fragmented system of product managers ended. Focus then returned to the general car brands. And each car brand, of course, had its own advertising agency, which was fully invested in protecting its client no matter what the brand perceptions or sales data might suggest. Plus, each car company had its own system of brand tracking and success factors that probably obscured looming problems. That’s what I meant about sibling rivalry.

Like any parent, it was virtually impossible for GM to tell one of its offspring that it was loved less than the others, so despite increasing evidence that there were too many brands, senior management held on. Yes, I know that it was much more complex than this–dealership pressure, union issues, manufacturing and R&D commitments, etc. And from what I hear, the shut down of the Oldsmobile brand was painful in the extreme.

Is there a moral to this story? Let me suggest the following:

  • Companies with different brands that compete against each other owe it to themselves to establish a single, consistent approach to brand metrics. Diageo, for example, is famed for this.
  • Don’t let tradition and emotion and years of promises to sell more product get in the way of business decisions. Just like in certain families, an intervention is sometimes called for.
  • An architecture built on a master brand can offer real power and efficiency, despite the protestations of your ad agency or brand identity firm. And you can have a house of brands that breaks into master branded product portfolios.

I’m sad about the end of Pontiac. I was sad about the end of Oldsmobile. As an American of a certain age, I still had a sense of these brands standing for different things. It would be good to see GM move through this painful process as quickly as possible. Let’s get past it, and then find a way to celebrate and share the word about the resurgence of value and quality from GM and all the Detroit automakers.

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Filed under Brand architecture, Brand strategy, General Marketing, Market Research

Dear Kellogg’s, Please Apologize!

What on earth? I was jolted this morning when I read that the venerable Kellogg’s has blundered badly with a false nutritional claim for its Frosted Mini-Wheats cereal. This story has the potential to generate the same firestorm as the recent Twitter moms’ protest against Motrin, but instead of just an insulting ad concept, Kellogg’s has launched a multimedia marketing push that is based on bad data.

Apparently, Kellogg’s marketing? public relations? advertising? people identified that mothers today are concerned about attention issues affecting their childrens’ performance at school. Check. (I still believe that my 17 year-old has some undiagnosed ADD thingy…I will research the subject until the day I die.) Where it seems to have gone horribly wrong is that they conducted some sort of quasi-scientific research and “proved” that a breakfast including Frosted Mini-Wheats would improve a child’s attention in school by some 20%. 

In fact, this “improvement”, when checked by the FTC, was only 11%. AND THE BASIS OF COMPARISON WAS WITH CHILDREN THAT ATE NO BREAKFAST! Well, duh! Virtually any other cereal could make the same claim versus an empty stomach.

Kellogg’s has a whole website for Frosted Mini-Wheats, with a “View” type set-up with streaming video of sincere, coffee-drinking women just bursting to discuss children’s attention problems, and lots of links for more information.

I actually thought that when I went to the website, there would be some mention about the issue–or that it would have been taken down. But no. Why wasn’t Kellogg’s more prepared for this? Surely they knew that the ad was being reviewed by the FTC. The company has been “unavailable for comment”. Kellogg’s is a major, reputable brand that has spent decades building trust. They need to get in front of this as quickly as possible, and also investigate why and how a major marketing effort was built on a specious claim.


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Tropicana Redux: 20% Sales Drop Gives New Meaning to Negative ROI

Well, it’s one thing to go out in the blogosphere and sound off on my personal opinion, even if it’s shared by so many. It’s quite another to see the actual impact on sales that Tropicana experienced after Arnell redesigned the pack. According to Ad Age, Tropicana’s sales dropped 20% in a 7 week period, when the category was essentially flat.

Anyone who questions the agony involved in tweaking a package design should take note.

A lot of people are comparing this to New Coke and I think that’s rubbish. New Coke was a new product introduction, not a package redesign. It involved a new formulation, a new name and a new package. Tropicana was ostensibly doing what CPG marketers do every day, namely, updating the pack.

I have also read comments that question whether market research was done at all or if it was badly flawed. My sources tell me that the research was done, it was done thoroughly, the design tested dismally, and the recommendation was not to adopt the new design. Whose ego overpowered the voice of the customer? Or were the research results “reinterpreted” in a different way prior to being presented to the client?

Some graphic designers consider package design to be a lesser art form. It may not be as glamorous as corporate identity, but it’s far more complex, much less theoretical and, in terms of generating true consumer response, it is where the rubber meets the road.

Tropicana will recover from this. It will be interesting to see if there are any consequences for those who recommended the wrong path.

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