Category Archives: Market Research

Ouch! Banks Get Skewered In Latest Edelman Trust Barometer

Went to a breakfast presentation this morning, held by the FCS.  The subject was “The State of Trust in Financial Services 2010”.  Let’s face it, I didn’t expect that the content would be upbeat. It was not. But the subject is interesting and provocative and the speakers were very good.

The core of the presentation was the Edelman 2010 Trust Barometer survey. This past year, the survey, for the first time, did a deep dive on the financial services industry. The findings show that when all categories (NGOs, Business, Government, Media) are combined, the level of trust in institutions tends to track with the S&P. Trust levels overall have bounced back from the 2009 lows by an average of 18%. Not so for banks–trust in banks continues to decline.

What does “trust” mean in the context of the survey? It means the ability and willingness of a company or institution to “do the right thing”.

Tech companies are the most trusted, according to Edelman. The worst? Financial Services.

The drill down allowed for segmentation within the Financial Services industry by type of company. Community and regional banks rank highest, and private equity firms are lowest, even worse than investment bankers.

So what’s the industry supposed to do?

1. Stop fighting with regulators, and work with them for a change

2. Be honest and transparent

3. Focus on quality not quantity of communications

4. Spend less time pushing product and more time providing service

5. Engage employees and customers alike

I will provide my point of view on these in my next post.

Advertisements

1 Comment

Filed under Brand strategy, Market Research

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.

Leave a comment

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.


Leave a comment

Filed under Brand strategy, Market Research

Oh Brave New World (of neurological focus groups)!

I like Martin Lindstrom. He’s an out there kind of guy, which is clearly demonstrated in his newish book, Buy.ology: Truth and Lies About Why We Buy. Maybe it’s because he shares my skepticism about traditional market research techniques, especially focus groups. Maybe because he understands how to build a good case for what is essentially scientific mind-reading. ( Lindstrom is a pioneer in the development of a technique that measures electrical activity in the brain in reaction to a stimulus, gathered through means of a sensory transmitter that looks like a swimming cap. It’s not what you SAY, he believes, but WHAT YOUR NEURONS DO that matters. 

In brief, Lindstrom’s thesis is that when it comes to brands and marketing:

  1. Emotion is stronger than logic. Yup, proven time and again
  2. Consumers, consciously or un-consciously, mis-state their opinions in market research studies. Uh huh. 8 out of 10 new products fail. See my post on Tropicana. 
  3. The way forward is to focus on what does or does not light up consumers’ prefrontal cortex.  Hmmmm.

Although he fears that the reader might connect all this to an Orwellian world of mind control, my fertile brain went straight to Aldous Huxley, specifically Brave New World. Follow me on this one. In Brave New World, humans spend a lot of time blissed out on a legal substance known as soma. Lindstrom paves a logical and thought-provoking path to the importance of somatic markers. Somatic markers are “a…bookmark or shortcut in our brain [that] shepherd us toward a decision that we know will yield the best, least painful outcome.”

If you follow Lindstrom’s thesis, then branding and related marketing activities are about triggering the most “blissful” response (or at least not a negative one) in the mind of the consumer, thus leading to purchase and preference. I personally buy into this. How many of us, through endless focus groups or one on one interviews or blindness inducing quantitative data analysis, are trying to find the holy grail of the ultimate brand “delighter” or “preference driver”? 

There is much, much more in buy.ology that I don’t have time or patience to cover in this post. Lindstrom can be a little grandiose, and in a few instances seemingly self-contradictory, but mostly he had me in general agreement with his concepts.   And lest you think this neurology stuff is all theory, apparently Frito-Lay is a believer–they have developed an ad campaign and snack food repackaging based on validation from neurological testing.

I question, though, whether brain scans will become so very commonplace. It’s great if you are a mass marketer with the budget and patience to develop prototype ads as stimuli. It’s a lot harder at the brand strategy or product innovation level when you are dealing in abstract concepts or the unknown. 

For someone like me, who is so lopsidedly right brained, it’s always sweet to see proof of the power of emotion and intuition over formula and algorithm. And until there is a real-world soma, then I’m happy to be blissed out by brands.

2 Comments

Filed under Brand strategy, Market Research