I think we’re all sick and tired of reading about the latest round of retrenchments from around the traps. Give us a break. We’ve had enough. Yes, it’s the recession we had to have etc etc, but let’s put it behind us, learn from it and move on.
But just before we do...
Here’s a final round up of the latest Australian stats, before Obama wins the elections, a miraculous overnight turnaround happens and the conspiracy theory guys start to suggest that the economic slump was perpetrated by the Democrats.
Data from ANZ suggests that the number of job advertisements – newspapers and internet – dropped by 5.9% in October. Compared to October 2007, the total number of advertisements was 9.8% lower.
A special survey by the Australian Industry Group asked 303 companies their views:
The bad:
60% of companies said the crisis had negatively affected their business
55% saying they expected production to fall as a result
53% claim employment prospects have worsened.
60% said sales had fallen as a result of the crisis
64% said new orders had been hit
56% said their capital investment plans have been negatively affected by the crisis
The really bad:
40% are planning to reduce employment
40% are revising their business plans
38% are planning to cut costs
28% are planning to reduce investment
25% are planning to reduce production
10% are cutting back on R&D spending
So that’s enough of that. Things are now getting better. Our troubles are over. Markets are improving. So we can all go out and buy that new car that’s been hanging around on the docks for the past few months and make that cheeky offer on the repossessed holiday home on Avoca Beach.
Oh and more importantly, before you do any of this, of utmost importance is that you call Heywood Innovation and get your brand strengthened and ready for the good times ahead. Will branding be on Obama’s agenda I wonder? Kevin take note.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
At its peak Chrysler was a brand of legendary status. This year the motoring legend is destined to fall from grace and get tossed on the brand scrapheap by private equity.
Herein lies the story of yet another monumental hi-octane blunder fuelled by private equity greed and incompetency. Cerberus – the private equity owner of Chrysler since 2007 looks certain to offload its investment. Described as ‘this terrible mistake’ by a former CEO of American Motors, the purchase from Daimler only last year was widely seen as an ill considered move. Even the transfer of ownership to Daimler in 1998 – an uncomfortable liaison that spawned DaimlerChrysler Motors Company LLC – had many motoring scribes scratching their heads. Auto manufacturer madness.
Here are some interesting facts – Daimler bought Chrysler for US$37 billion, then spent billions more trying to keep it afloat. Cerberus Capital bought Chrysler back from the Germans for US$7.4 billion! Bet the Daimler shareholders were mighty pleased. Perhaps the Daimler brand value took just a slight dip after waving goodbye to US$30+ billion?
So what price will Cerberus now get in this financially battered market? General Motors is seen as the favoured suitor which is presently scavenging in the ruins looking for tasty morsels. Not that General Motors is without its own problems, with estimated debts of US$300 billion – which makes Daimler’s US$30+ billion loss look almost acceptable. All victims of a consumer society once fixated on ‘big is beautiful’ and now too slow to respond to environmental concerns and a global shift to smaller and more economical vehicles – cars that were great for the 1980s but dinosaurs today. Global warming and public sentiment sealed their fate.
So what value is put on the Chrysler brand now? Apparently precious little. Peter DeLorenzo, a former auto ad exec commented “After you get Chrysler, you take Jeep and the minivans, and get rid of the rest”. It seems that in order to restore brand strength and sales of the legendary GM Hummer (down 47.3% this year) all GM needs to do is to align it with Jeep ‘a brand with worldwide appeal’ (sales down 26% this year). What do you end up with? You get two brands with declining sales – one being the most despised and environmentally unfriendly auto brand of them all, sold alongside an honest and reputable ‘fun 4WD lifestyle vehicle’ albeit with a distant military heritage. Guess which brand will tarnish the other? You think Hummer will revitalise, or will Jeep’s brand suffer after the initial showroom frenzy and PR spin die down and everyone checks the sales figures? I’ll leave it up to you to figure that one out. What will all those loyal baby boomer brand diehards, who grew up with the ‘classic’ Chryslers think of these well heeled, smart talking, suntanned, quick buck merchants from Cerberus? Do we need to mention gun laws here? I guess here’s another brand going down the toilet big time, that’s likely to get its ass shot off or run over before it does so.
Chrysler brand RIP. 1925-2008
STOP PRESS 27 October
Chrysler has announced it is to cut 25% of its white collar workforce.
Daimler has announced it is to suspend production for one month after unveiling a big fall in profits.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
If you're responsible for the ownership or management of your organisation's brand I wouldn't blame you if you admitted to having a few sleepless nights worrying about what might go wrong next. Let's admit it, there is plenty that can go wrong.
> Trying to make communications read and look as though they come from the same company
> Imminent merger discussions no-one bothered to tell you about
> Getting every department to use the same font on correspondence
> Having a website that looks as though it belongs to someone else
> Employee induction packs that aren't painting the same picture as the interviewers
> Internal sign system that isn't pointing visitors in the right direction
> Corporate profile that's five years out of date
> Powerpoint presentation that the student on work experience put together
> Company mission and vision that no-one can remember
> Advertising agency that charges like a wounded bull
> Staff who look as though they need a good dose of motivation
> Company procedures that don't exist
> Designer who is claiming copyright ownership of the company logo
> The discovery of five different sets of stationery templates circulating internally
> New product launch that marketing wasn't advised of
> Awkward questions on future vision from the media that the Chairman couldn't answer
> Launch of the new product name overseas that didn't translate too well
> The sales team's business cards with the company URL missing
> The three senior executives who resigned all in the same week
> Customer complaints that just increased 200% in one month
> Newspaper ads that use exactly the same headline as a competitor's ad last month
> The pirated software your in-house designer has been using
> New receptionist with tattoos and body piercing that someone hired...
Many of the brand assignments my own company is commissioned for are ones where an existing brand needs rectifying, needs updating or is subject to internal or external change. Companies are getting particularly wise to the fact that, in addition to customers, an underperforming brand can impact considerably on employees and the potential to attract and retain top talent.
I thought it would be useful to touch on a few things that warrant consideration.
1/. Future vision. Does the leader have a vision for the future which everyone within the organisation is inspired by… or is the ship rudderless, off course and without GPS to guide it?
2/. Who owns your brand? Have you negotiated with your designer to hand over copyright, and have you trademarked it?
3/. Do you have control of your organisation's communications? Do they look the same? Do they speak with the same voice? Does anyone check spelling and grammar? Are templates and guidelines available?
4/. Are written HR procedures available for interviewing job candidates? Is there an induction pack explaining the organisation's brand, what it means and the role employees play in its success? Are training and company procedures included in it?
5/. When was the present corporate identity introduced? Does it build an accurate and positive perception of what the organisation is, does and believes in?
6/. Likewise, do communications in print, online, DVD and video build an accurate perception of the organisation's brand? Do they include strong messages to influence your audiences?
7/. Does your organisation have sub brands? If so, do they competently support the main brand? Are they consistent with the parent brand if that is the intention?
8/. Has the organisation's brand been audited within the last 12 months? Are you aware of all applications that are visually branded eg stationery, brochures, Powerpoint presentations etc? How consistent and relevant are they?
9/. When was the last time the organisation's website was updated? Does it contain out-of-date information that may render the organisation legally liable?
These are just a few considerations. Our experience is that there are many more. If you need advice to overcome your branding challenges check us out at www.heywood.com.au
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
Ofcom, the independent regulator and competition authority for the UK communications industries, has announced in its annual report that mainstream TV advertising is no longer the medium of choice in the UK. Spending on online advertising has overtaken TV. Online grew 40% last year to A$6 billion, accounting for 19 percent of all advertising, in an industry that is worth A$109 billion. The report also states that in a comparison of the period from 2002 to 2007 the time spent on computers by the British public increased 400%, representing 24 minutes a day per person. Mobile phone time increased 200%. By comparison, Australia’s online advertising market grew 61.5 per cent in 2006 with the full year spend just topping the $1 billion milestone. Way to go.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
Brands can evoke strong rational and emotional responses in those who come into contact with them. This translates as ‘a powerfully held set of brand beliefs’. To be successful brands must create a relationship with key audiences by meeting both functional and emotional expectations at all points of interaction. The brands consumers choose can reinforce their self-image and generate social acceptance... think iPhone, Absolut, Prius. A consumer will pay a premium for a brand that can help them make a social statement. Brands can also put people in touch with likeminded individuals... think Harley Davidson.
Car manufacturers are experts at combining the rational and emotional. BMW and Mercedes for example, are all about build quality and engineering excellence. BMW however focuses on performance while Mercedes focuses on reliability. They have built brand strength by leveraging their functional excellence into an emotional resonance in the minds of consumers. How do they do this? BMW transforms performance into a form of emotional aggression. Mercedes translates reliability into a form of emotional reassurance.
These functional and emotional associations which are assigned to a brand by its customers and prospects are known as brand attributes. Brand attributes can be either negative or positive, and can have different degrees of relevance and importance to different customer segments, markets and cultures.
Identifiable product features are referred to as ‘functional benefits’. Some brands are easily differentiated by their functional benefits. Where functional benefits aren’t easily identifiable or differentiated, marketers often rely on ‘emotional benefits’. Let’s look at an example.
You’re a middle manager and you need a new car. Your first considerations are likely to be based upon functional benefits: reasonable performance, 2.0 litre engine, fuel economy, reliability, four doors, golf clubs must fit in the boot, must have an iPod connector, must fit in your garage etc. You have a choice of around 12 Japanese, French, German, English and Italian cars. All look much the same, have near identical specifications and capabilities and will meet your requirements admirably. Six of these cars are priced below $40,000, five are priced below $50,000 and the BMW is $65,000.
How can the BMW brand command a premium price level when on paper it has almost identical specifications and performance as the other less expensive cars? The difference lies not in superior functional benefits but in the emotional and self-expressive benefit of having a clearly identifiable high performance luxury brand that will sit in your driveway and be the envy of neighbours and friends.
When owners drive their BMW, they are rewarding themselves with an emotionally engaging experience that satisfies their desire to be part of an elite group of drivers and owners that seek something different and better.
Emotional benefits are often closely linked with self-expressive benefits. For example, does it feel better to buy a recognised and proven brand of baked beans or the No Frills generic brand? It feels better to buy the proven brand even if it has been proven that the contents of both are identical. Doesn’t it?
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
Four recent safety incidents within 10 days have tested the strength of the Qantas brand, an airline that for many years has maintained a peerless safety record. The integrity of its brand has suffered by reports that essential servicing has been transferred overseas as part of a company-wide cost cutting exercise. The airline is now subject to a Civil Aviation Safety Authority investigation. This comes at a trying time for Qantas as it waves farewell to long standing chief Geoff Dixon, who tried to assure shareholders and passengers that there are no ‘systemic problems’ and reinforced that the vast majority of servicing is completed in Australia. Passengers belief systems need more than this from the lips of an outgoing chief, who was once heralded as the vision and voice of Qantas. Statements by engineering boss David Cox reported in the media that ‘some such incidents are just part of running a major airline’ have served to cast further doubt on the strength of the brand and the competency of its guardians. Sadly the damage seems to be done and Qantas must now try very hard to repair the damage and wait for a new chief with a new strategy to rescue the brand. This comes at a time when media articles question the brand’s ‘Australianism’ and diminishing emotional connection with Australians and particularly Australian travellers. For here is a brand that based its values on ‘safe flying’. Sadly its bottom line obsession at a time of high fuel costs has eroded employee commitment, damaged belief in the brand and diminished customer loyalty. The ‘perception of ‘high value service delivery’ has been lost to competitors such as Singapore Airlines who have seized the baton and are way ahead. Qantas now needs a lot more than the recently redrawn kangaroo and italicised lettering in its logo to regain brand altitude, recover its bottom line and respect for its brand. I strongly recommend that now is the time for Qantas to go back to its roots, redefine its Australian values, identify real differentiators, analyse its competitors’ brands and create a strategy that will win back the hearts and minds of its customers.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
A brand’s ‘country of origin’ can have a profound effect on the perception of a brand, particularly in the case of consumer products.
It can differentiate a brand and create strong and enduring relationships. ‘Made in Japan’ remains a strong guarantee of quality and innovation, harking back to the huge inroads made by the likes of Sony in the 1960s which helped put post-war Japan firmly on the map as a world leader in electronics, and Honda as it started to cripple the innovation-shy British motorcycle industry. It represented a firm stab in the back for the traditional qualities associated with ‘Made in England’ from the 1960s to the 1990s - the heyday of brands like Robertson, the epitome of British transistor radios, and so many British auto brands - Alvis, Austin, Hillman, Lagonda, Morris, Riley, Sunbeam, Wolseley and so many more.
Sadly like most product offerings ‘Made in Japan’ seems to now be increasingly replaced by ‘Made in China’, with automobile brands like Toyota, Honda and Mazda perhaps the only unbreakable aspect of Japanese automobile design, technology and manufacturing superiority... but for how long?
The ‘Made in Japan’ brand has very definite and very positive associations. ‘Made in England' (or is it 'Made in the United Kingdom'?) has no definite associations any more – perhaps it all got lost somewhere ‘midst the EEC confusion. Some brands however will always be strongly associated with England - Purdey shotguns, Barbour outdoor clothing, and Dunhill. They maintain an unbreakable and exclusive perception of tradition and quality, in the same way that Glenffidich will never be matched by any Japanese or Chinese whisky brand. I was going to include Jaguar but that now resides in Indian hands at Tata after a period of ownership with those gents at Ford in good old US of A, now in deep financial distress. So who knows what that has done for buyers’ perception of the once quintessentially English Jaguar brand!
‘Made in Germany’ symbolises precision and reliability. Products from German auto manufacturers Mercedes Benz, Audi, BMW and Porsche benefit from these positive perceptions. They seem unbreakable and have withstood the onslaught of the Japanese engineers, designers and technologists.
Having been born in England where the majority of the nation still seems to harbour some mistrust, bordering on dislike, for the French (something to do with Napoleon, Trafalgar and France’s inability to play decent football) I recollect no strong perceptions of ‘Made in France’. Brilliant Citroens DS19s and rubbish Renaults were the only products I remember from the 1960s until the introduction of fashionable and filthy smelling cigarettes and the bizarre suggestion that the French are good lovers! Not exactly cut through stuff. Even the wines are not that great (thank you Australian wine industry).
Brand Italy seems to score better. Luxury goods brands like Armani and Prada, sublime supercars like Ferrari and Maserati, ace soccer teams, designers and the beauty of Italian architecture and countryside conjure up very positive impressions of Italy, the Italian people and their enviable lifestyle. So, here’s a question. Does the country brand influence its product brands or vice versa? Was Italy such a great place until Enzo Ferrari and Giorgio Armani came along?
With the advent of global media, it can take only one incident to capture the minds of global audiences and reduce centuries of brand goodwill to nought. China’s recent exploits in Tibet are a PR nightmare. The lead paint on Chinese toys succeeded in crashing their exports and instilled a hard-to-shift perception of ‘cheap, nasty and dangerous’. The US interference in Iraq, aggravated by the global economic downturn, has severely dented perceptions of its standing as an economic power house and global peace keeper. Zimbabwe is no longer perceived as a viable holiday destination.
As ambassadors of their ‘country of origin’, airlines can gain very definite benefits by aligning their brand strategy with that of the nation. Good examples of this are Alitalia which just flew in the Pope to Australia, British Airways, Swiss Airlines etc. Airlines do not have to have the country of origin’s name present, as in Qantas which is undeniably the airline of Australia.
‘Country of origin’ can have a very definite impact on consumer perceptions and buying decisions. It should be considered however as only one component of a brand’s ability to achieve and sustain long term success.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
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