Archive for the ‘Brands and Branding’ Category

Marriott and RitzCarlton: When Ordinary Tarnishes Luxury

Wednesday, September 3rd, 2014

During my most recent stay at the RitzCarlton in Naples, Florida, it had become obvious what happens when an average brand—Marriott, in this case— takes over and dominates a luxury brand like RitzCarlton. This time, there were no slippers in my suite—offered only by request. Shoes left out for the overnight shoe-polishing service weren’t returned in an elegant, cloth bag, but in a tacky,.plastic one. And even the piano player, who always performed afternoons in the lobby, had disappeared. The piano remained, abandoned. The building also was in need of renovation in some places. Some guests pointed out that they now had to ask that the shampoo, shower gel etc. be refilled or replaced; in the past, these amenities were replenished daily, regardless of how little had been used.

Ordinary does not comport with luxury. Too often, average brands attempt to seek their salvation in lowering prices—which also doesn’t lead to growth in the mainstream, but that’s a story for another time. But luxury is not “common sense.” Luxury lives on excess, on rational extravagance. Luxury yields high revenues, but it also carries costs that would bring tears to the eyes of a comptroller. And exorbitant prices are paid for all of this. When I pay high prices and receive average service, I feel made to look foolish, and I turn elsewhere.

Still, RitzCarlton has a brand bonus. We often give these strong brands, with which we have had good experiences, the benefit of the doubt. Marriott would do well not to let RitzCarlton slide into mediocrity or, more positively stated, to give the brand the latitude it needs in order to develop. Marriott management can play the little game of lowering costs in their own house.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

“Experience” Land Rover: The Impact of Sales on the Impression of a Brand

Wednesday, May 28th, 2014

I am (or was) interested in a new Range Rover. On our quest, my wife and I experienced the following as we, accompanied by our dog, casually dressed in dog-friendly clothes, and me unshaven stopped by two Land Rover dealers that happened to be on one of our routes.

Dealer 1: A prestigious dealership that had the word “premium” worked into its name. There were a few vehicles outside, but no Range Rover. Only a couple of RR Sports and an Evoque. I went into the huge showroom. Empty. Not a single automobile. There was, however, a sales office. Inside was a salesman, who looked up reluctantly as I introduced myself I told him that I wanted to buy a Range Rover and that I was amazed to discover an empty showroom.

  • Salesman (looking me up and down): “Yes, the vehicles are all “over there.” There’s a sale going on.
  • Me: “All of them ‘over there’??”
  • Salesman: “Just so. What are you interested in? An Evoque?”
  • Me: “A classic Range Rover.”
  • Salesman: “A Sport?”
  • Me: “A classic Range Rover!”
  • Salesman (looking me over again, in disbelief): “Our demonstrator is out. I don’t have that model here. Delivery takes nine months.”
  • Me: “Thanks.”

End of conversation.

The next dealer:

  • Me: “Good afternoon, I’m Guido Quelle and I’m interested in a Range Rover.”
  • Salesman: “Hello, my name is . . . and that is most convenient because I sell Range Rovers.
  • Me: “What a coincidence.”

We both laugh. We leave the showroom and head for the lot. The salesman greets my wife with a handshake.

The conversation continues pleasantly. The salesman takes seriously my amazement at the delivery time, but there’s nothing he can do about it. Besides that, the new, extended version currently has delivery time of three years (!), about which he himself is not particularly ecstatic. He would be happy to arrange for a demonstrator, but he couldn’t change the delivery time.

We departed on good terms—a good conversation. Three guesses as to where I’ll shop for a Range Rover next time, when delivery times once again become reasonable.

Lessons:

  1. For a brand, the “front line” is decisive. The first salesman damaged the Landrover brand; the second one made up for it.
  2. Range Rover offers an example of what happens when being unprepared for success damages the brand, in this case because of unreasonable delivery times. In any case, I won’t be ordering an RR.
  3. Never let yourself be controlled by appearances—never. Moreover, instruct your sales department not to make judgments based on appearances. Even people in casual clothing can pay for a car, a watch, a piece of jewelry, or a house.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

“It’s Miller Time, Let’s Have a Bud”—It’s Not Enough to be First.

Friday, May 23rd, 2014

As our Canadian colleague and friend told me, the Miller brewery created “Miller time” in an ad campaign much noticed at the time—a Miller beer as reward after a stressful day. “If you’ve got the time, we’ve got the beer.” A grandiose concept for the industry. “Miller time” was born. Unfortunately, Anheuser-Busch (A-B) wasn’t exactly asleep, because then came: “For all you do, this Bud’s for You.” A-B’s strength in the beer market gained its slogan gained even wider prominence at the time. Analysts quipped that it actually had to mean: “It’s Miller Time, let’s have a Bud.” A branding disaster.

It’s just not enough to be first. It is more important—and more difficult—to remain first. People sometimes ask market leaders how they have succeeded in remaining the market leader over the years. We get no answers such as these:

  • “We did the same thing, only more often and more quickly.”
  • “We started a large-scale sales offensive.”
  • “We simply always copied others.”

Market leaders with a long-term view of themselves reinvent themselves, dismantle things that aren’t working before others do so, and they are definitely not the cuddly sort. They never rest. Never. The not only dominate the market, they define it. Someone to whom that doesn’t appeal would be better off not trying to be a market leader at all.

Postcript: There is an outstanding article about Miller and A-B (“Busch Family Builds a Name”) in the Milwaukee Journal of 10/30/1988. You can find it on the Web.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

The Power of a Brand

Wednesday, April 9th, 2014

Temple-Market Hong Kong: A crowded place, noise, people, almost chaotic, see pictures below. I needed tissues and went to a—well, let’s call it “drugstore.”

What did I get? Almost 7,000 miles, 7 time zones, 107 degrees of longitude and 30 degrees of latitude away from home I don’t get a no name product from Hongkong, I didn’t even get “Kleenex,” what wouldn’t have been a surprise for me. No, what I get is something I didn’t expect: “Tempo Petit Icy Menthol”. Tempo, a brand that is a synonym for tissues in Germany like Kleenex is a one in the US.

Do we really need to talk about the power of brands again? I don’t think so.

Temple Market Hong Kong
Temple Market Hong Kong

TempoTempo

Entrance Temple Street
Entrance Temple Street

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

 

What Miles & More and Portfolio Management Have to Do With Each Other

Thursday, March 6th, 2014

A few days ago, my assistant handed me a letter from Miles & More, Lufthansa’s frequent-flier program, that said the following: If you were to participate in a consultation with a Commerzbank “individual portfolio-management” adviser – and you have liquid assets of 250,000 euros or more (see the fine print) – and if you were to display your Lufthansa “Senator” MasterCard, afterward you would receive 15,000 bonus miles.

Excuse me! What’s that all about?

If Miles & More were our client, we would have strongly advised our client against a link, even conceptually, between Lufthansa and portfolio management, never mind the associated offer of 15,000 bonus miles. That’s not where growth comes from. This is how brands create confusion. Does anyone really think that someone seriously considering the option of portfolio management – or even more unlikely, someone considering a change of portfolio managers – would be tempted by 15,000 bonus miles? Does anyone really think that the Lufthansa or Miles & More brands are suitable for portfolio management?

Portfolio management has something to do with personal trust. A trustworthy airline is of no help here, and bonus miles are even less helpful. Even the suggestion that “Commerzbank investment specialists always act for your benefit” isn’t really all that helpful. Bad enough that someone has to bring that up. What else, may I ask, should an “investment specialist” possibly do?

One thing is for sure. The letter made its way into the trash can next to me. But what bothered me even more is how misguided it is to embrace every business opportunity that presents itself – as we have seen here. I was annoyed, and I’ll bet any money that I’m not alone.

Back to the headline of this blog post: “What Miles & More and Portfolio Management Have to Do With Each Other”: Nothing. Bottom line: Let it go.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

The Escalation of “SALE”

Wednesday, February 26th, 2014

“SALE” seems to be becoming a brand in itself. Not only do German shopping-centers and -districts teem with shrieking red signs that vie for (my) attention, but “SALE” rarely offers an opportunity to obtain something of value at a lower price. Beyond that, retailers are looking for ways to top “SALE” – according to the principle: “If everyone is shouting, then I simply have to shout louder.”

One result is shown here, seen in a Dortmund display window of a chain store that sells clothing – I’d just as soon not speak of “fashion” in this context. I hope that something a little better than this escalation of “SALE” occurs to the people in charge who want to create profitable growth. “Final SALE” won’t be sufficient.

Final Sale
 
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.