Mythology - The Meaning Behind the Marketing

McDonald's Uses Differentiation to Drive Coffee Growth

As a marketing professional, I love to see companies take a bold stand and differentiate themselves clearly from competitors. All too often marketers get cold feet and won't clearly articulate who they are and who they aren't. In the process, they don't stand out from the crowd and don't attract the customers who would most likely find appeal in their brand.

That's why I have been watching the latest round of McDonald's commercials promoting their McCafe line of coffee drinks. Here is an example:

Rather than out-Starbucks Starbucks, which would clearly be a tough sell coming from McDonald's, they have positioned themselves as the anti-Starbucks. "We have great coffee drinks, but without all the smarmy hipper-than-thou trappings of you-know-who." McDonald's is going after a clear market of consumers who enjoy high-end coffee-based drinks, but who may not see themselves as elitist and who may in fact be uncomfortable in the higher-end Euro-cafe environment of a typical Starbucks cafe.

If McDonald's has done their research (and I would be surprised if they hadn't), they are positioning themselves to take a leadership role in a significant regular-guy/girl marketplace. The question is whether there are enough of these consumers to generate significant revenue and market share growth for McDonald's, which needs huge numbers in order to register on their radar.

Whether they are successful or not is yet to be seen, but it's a good example of clear brand positioning.

Ignore the Purpose, Abuse the Medium

I guess it shouldn't be a surprise, but Forrester (registration required) recently reported that only 1 in 6 people trust corporate blogs. But aren't blogs supposed to be how companies put on their human face and show the "real" brand?

Hearken back to the rise of email and database-driven marketing in the Nineties. Remember the big push for customers to sign up for company "newsletters"? It was supposed to be about producing "news" that built a long-term relationship. Instead, most newsletters turned out to be glorified spam with companies training their consumers to ignore a barage of special offers. No news, no real value. Email open rates and click-through rates plummeted over time as consumers learned this medium wasn't that new after all in terms of the value companies sent them.

It's happening again with blogs, at least among the over-managed, stylized corporate blogs that are little more than a thin veneer of "authenticity." By the time the corporate PR and legal team approve the CEO's post, it says next to nothing that a promotional email wouldn't have said.

Why does this happen?

For one reason, marketers focus on the medium as opposed to the purpose and nature of the communication. During the email marketing frenzy, hundreds of database analysis firms were there to help you determine how many emails you need to send in order to achieve a certain return. But who was focused on actually putting value in the email itself so that consumers were trained to look forward to the content?

Why do marketers focus more on spinning up a cool new medium, such as a blog, as opposed to focusing on what matters, which is what consumers need and want in order to build a long-term value-driven relationship with a company? Because it's easier.

Let's be honest. Everyone is busy. Few marketers truly understand their customers or their market as deeply as they should. Few spend enough time listening to customers' needs or desires enough to know what would be considered valuable. Therefore, it's easier to crank out a vanilla blog than it is to produce a meaningful, value-building conversation.

Building Brand by Choosing Sides

It used to be that the vast majority of corporations did everything they could to avoid offending a possible customer by choosing sides. Most major brands played it safe, and if they did publicly support a cause, it was almost always something broadly supported and impossible to be against.

Today, through the explosion of communication, the impossibility of keeping things quiet, and the focused efforts of activists of all stripes, it's nearly impossible for a company to not be forced to take a stand on any number of controversial issues.

A recent example relevant to Mythology's home base state of West Virginia: Recently Bank of America announced that they will no longer lend to companies that practice "mountain top removal", a form of mining that literally lops the tops off of mountains to get to the coal. Environmentalists have been very savvy in targeting the source of funds for this practice, and in the case of B of A, were successful in forcing the country's largest bank to turn off the money spicket.

In doing so, B of A had to make a choice: offend the coal mining companies and the workers who may get laid off, or the growing ranks of environmentalists and average citizens who are becoming more "green" aware? You would like to think these decisions are made based on principle, but it doesn't take much deliberation to determine that B of A probably gained more green-minded fans than lost coal miner business.

The list of issues and causes is endless, and even smaller companies are having to "choose who you lose" in order to position their brand effectively and profitably with the right customer segments. Many of the early adopters of more liberal "domestic partner" benefit policies were companies that made the decision practically in order to retain what they considered talented employees.

The understanding of brands as personal identity markers has fed into this dilemma. The best brands have powerful emotional connections, and the more emotionally connected a consumer is, they more meaning they want to build in the relationship. Brands that are seen as Americana and traditional (e.g., Disney) may have a lot of conservative customers who get deeply hurt when a company policy seems to support a more liberal agenda. Likewise, if a hip, edgy company (e.g., Nike, The Gap) makes a business decision that doesn't seem to support liberal or social justice policies, it can come under attack.

Even the social media activities of your employees can influence how your brand is perceived as more people speak their mind on blogs and sites such as Facebook.

CEO's and senior marketers may not have planned to get their brand directions enmeshed in politics, but increasingly they may not have a choice. Some soul (and brand) searching questions you may want to ask about your company:

• What does our company culture and mission give us as guidance on how to make tough decisions?
• What categories of decisions should be based on the moral and ethical merits, and which ones based on practical business?
• How will executives and employees collaborate on these decisions?
• What are the implications of NOT taking a stand on something vs. taking a stand, not just in terms of short-term revenue and good/bad PR, but on attracting the employees/partners that we need?

Has your company had to make a tough public choice on a moral or political issue that affected your business? We'd love to hear how you handled it and what the outcome was.

Balancing Pre-Testing With Execution

In the old days, market research and pre-launch ad testing was incredibly time consuming and expensive. Only the largest advertisers could spend enough time and money fine-tuning their message with a pilot group before launching to the rest of the world.

Even then, few of them did it enough, or did it effectively. From the Edsel to New Coke, the business world is littered with failures that should have been caught before millions were spent on their launch.

Today, the Internet has made the testing of marketing messages and creative much more affordable. It has also enabled testing to occur with much quicker turnaround, speeding a company's ability to get campaigns and products to market.

The New York Times reports on a new breed of online advertising service providers who enable marketers to test everything about their online ads - font types, color types, messages, etc. - to optimize which variation generates the most click through and  conversion. This is significantly affecting the role of creative agencies. Often what the creative "gut feel" might indicate is the best design does not test as well as a more bland or sterile design.

The question is, “how do we combine creative energy, which is a manual and sort of qualitative exercise, with the raw processing power of computing, which is all about quantitative data?” said Tim Hanlon, executive vice president of VivaKi Ventures, the investment unit of Publicis Groupe.“I think it’s clear that the traditional process of agencies is clearly not going to survive the digital era without significant changes to our approaches,” Mr. Hanlon said.

The left brain is horning in on the right brain in this case. You can foresee a scenario where an agency doesn't make its money on creative services, but on the reporting of which variation worked.

So how should a small or mid-sized organization balance the availability of testing vs. execution? Is it possible to test too much and slow down your speed to market? How much does an advertiser gain by slowing down and learning which creative is most effective before launching?

Here are a few recommendations:

• Err on the side of testing - In my experience, the vast majority of advertisers and marketers do not value pre-testing (or even ongoing measurement) nearly enough. It is doubtful that, given the pressures of "getting something out there" that you will ever test too much.

• Set a performance bar before you have to launch - The majority of marketers don't do enough testing because they are in a rush. Set aside time to plan the level of testing you will require for every campaign, then build it into the process before the next campaign needs launched. Choose your vendors, your process, your "go" levels of performance beforehand.

• Educate your executives - From the CEO to the CFO, your executive team needs to know that you recommend this higher level of discipline from marketing. This may take some executives aback who still see marketing more as a whim than a strategic investment. But long term, you will establish more business credibility and more than likely build up your reputation as an accountable, responsible leader. It also helps during budget crunches when you will need to justify your marketing budget and avoid slashes. Data-driven recommendations can help avoid a lot of dumb budget cuts.

• Take time to learn - Measurement, either pre or post, is meaningless unless you take time to digest what worked and what didn't and apply the learnings to the next campaign.

Marketing is still creative. But the more science and discipline are combined with creativity, the more fruit your marketing investments will yield.

Leaping Ahead of Competitors in Tough Economic Times

Knowledge@Wharton re-affirms the notion that taking a bold, aggressive approach during an economic downturn could pay off big time for companies who continue aggressively marketing while their competitors cut their advertising budgets:

Research shows that companies that consistently advertise even during recessions perform better in the long run. A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.

Everyone from Gold's Gym to financial services marketers have had to revise their message a bit. It is more difficult to appeal to vanity or ego during times such as these. Instead, messages centered on value and practicality seem to ring true and connect with consumers.

However, for premium or luxury brands, there is still an opportunity to market the emotional benefit of escapism. After all, who doesn't need a respite from the constant stream of bad news?

Here at Mythology, we continue to tinker with our own messaging about "building belief in your business." One of our key value propositions is to get more out of your marketing and to focus on marketing ROI. This has certainly helped us connect with new clients as senior executives question what they've been getting from their marketing efforts.

As with all difficult circumstances, it's an opportunity for brands to sharpen themselves and get to the core of their value proposition. It's also an opportunity to devise more clever, low-cost, high-yield customer engagement strategies that will pay off as the economy starts growing again.