market leader jan 2012

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N E W T H I N K I N G , D I F F E R E N T P E R S P E C T I V E S

QUARTER 1 JANUARY 2012

Cultural innovation:triumph of a betterideologyDouglas Holt and Douglas Cameron

NEVER WASTE AGOOD CRISIS

Sir Terry Leahy

ACCOUNTABILITYIS NOT ENOUGH

Rory Sutherland

THROUGH THEGLASS CEILING

Janet Hull


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E d i t o r i a l

Market leaderQuarter 1, 2012 3

i rEcEntly attended a lecture on the applications of neuroscienceto marketing. All the data marketers will ever need, it was claimed,can now be obtained from neurometrics via MRI scanning,EEG measurement and eye-tracking devices. I listened to thelengthening list of uses with mounting disquiet and an article formedin my mind entitled Caution: neuroscience may be dangerous to thehealth of your brand.

The lead article in this issue provides the explanation of why the skillsrequired for brand building live in a parallel universe. Douglas Holtand Douglas Cameron in Cultural innovation: triumph of a betterideology look to anthropology for inspiration. It is commonplace to saythat brands live in the mind (as opposed to the factory). But where theyreally live is in culture, in societys norms, values, codes and practices.

And while yes, neuroscience and anthropology can exist together, thedanger is in what we qualitative researchers call physics envy (the needto elevate market research to the level of the pure sciences). Put accessto the brain the human version of the Rosetta Stone together withlots of gadgetry that measures things and before you know it, the newand intriguing drives out the old but essential.

The key point that Holt and Cameron make is that innovation modelstend to reflect an engineers view: technology is the necessary driver. Yet,cultural innovation, a new and better ideology (think Innocent, Starbucks,Harley Davidson, Dove and many many more) are just as innovative andlikely to be just as profitable. Neuroscience may have a lot to offer but it

will never contribute the insights into brand building to be obtained froma constant monitoring of the cultural environment.

The article forming in my mind could equally have been entitledCaution, data can be dangerous to the health of your brand, and thisis a theme that Mark Earls pursues elsewhere in this issue. The datahosepipe the literally billions, maybe trillions, of pieces of dataflowing over us can lead to paralysis. Advice: look for big patternsor you may lose the will to live. Also in the issue, Rory Sutherlandexplores concepts from Behavioural Economics as well as some otherless familiar sources that have insightful applications in understandingbrand choice.

Finally, from the most successful brand builder of them all, Sir TerryLeahy, comes a checklist of the ways in which CMOs can turn the

whole organisation into marketers. Use the power you have, he advises.After all, he did it.

Keeping brands healthy

Judie Lannon, Editor

[email protected]


4/604 Market leaderQuarter 1, 2012

editorJudie Lannon

editorial BoardPaul Bainsfair, Roger Banks, Hugh Burkitt,Matthew Coombs, Martin Deboo, Paul Feldwick,Anthony Freeling, Roger James, Laurie Young

editorial adVisorY BoardProfessor Paddy BarwiseLONDON BUSINESS SCHOOLStephen A. Carter CBEALCATEL-LUCENT INCSimon CliftCONSULTANTHugh Davidson CRANFIELD SCHOOLOF MANAGEMENTMartin Glenn BIRDS EYE IGLOSir Paul JudgeTHE MARKETINGCOUNCILSir Chris PowellNATIONAL ENDOWMENTFORSCIENCE, TECHNOLOGYANDTHE ARTSRichard ScaseUNIVERSITYOF KENTAT CANTERBURYMark Sherrington QUIRKEMARKETINGAGENCYDianne Thompson CAMELOT GROUP

Production editorHelen Devonshire

PuBlisHerMatthew Coombs

adVertisinGDiana Pounsford

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Market Leaderis published quarterly by Warc in association withThe Marketing Society.

ISSN 1463-0877

The views expressed in contributions toMarket Leaderare notnecessarily those held by the publishers or The MarketingSociety.

Printed by Pensord Press

Copyright Warc and The Marketing Society 2012. All rightsreserved. Reproduction in whole or in part without writtenpermission is strictly prohibited.

QUARTER 1, 2012PUBLISHED IN ASSOCIATION WITHTHE MARKETING SOCIETY BY WARC

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c o n t e n t sIn thIs Issue



i d e a s & i s s u e s

12 Mkg vThe divide has almost disappeared betweenbelow-the-line and above-the-line.

Where to draw the line now?B And Nairn

14 Pb Not so long ago PR executives had to fightfor the chance to play an integral role in theorganisations business. The tables are turningB MarLee Sachs

15 Mkg chAn understanding of what and how Chinese

want to eat is a quick way to know ChinaB Tm Dctrff

17 Mkg When cuts are rife, its time to make thecase to your organisation for marketingexpenditure in austere timesB Vincent-Wane Mitchell

18 G gGenetics influence how we consume; morepeople are now choosing brands thatcelebrate their masculinity or femininity

B Mar Sa and Charlie Skinner

r e G u l a r s

08 BwvA selection of whats going on from aroundthe world of marketing

B Elen Lewis

20 chppg BkA great deal of time and money is spent ontrying to find out what people think of brands,but what do brands think of us? B Jerem Bullmre

22 VwpHow does it feel when youre on the receivingend of healthcare? Insurers could do better B Hugh Burkitt

53 twhThe consumer psyche is complex: attitudesand behaviour refuse to follow logical patterns B Melanie Hward

54 B B Reviews by Michael Bayler, Winston Fletcher,

David Nichols and Hamish Pringle

56 l m tkyReflections on Japanese women, earthquakesand ad agencies

B David Nichls

57 spk cAre you pushing customers around? Byproviding too many channels, you could bediscouraging people from using any of themB Kamil Michlewski

58 th l WThe advertisers generally cheerful demeanourcould be a disadvantage we need to takemore notice of case histories of brand failures

B Rr Sutherland

f e a t u r e s

CoVER SToRy

24 tmph b gyMarket innovation has been dominated bythe world view of engineers and economists,but cultural innovation can be more successfulB Duglas Hlt and Duglas Camern

28 Bzg h Many mould-breaking retail innovators areloved by shoppers and are bucking thedownward trend in the retail environmentB Leslie Cliffrd andLaura Mser

32 dkg m h bg hpp

We have access to more data than ever, but weneed to use that data hydrant in the correctway or marketing benefits are lost in the delugeB Mark Earls

36 c- h: w g

This powerful source of competitive edge isstill one of the most misunderstoodB Drn Meassed, Philip BurgessandPriscilla Daniel

40 aby ghIts time to reject the limitations of regular

business language and devise a vocabularyspecific to marketing needsB Rr Sutherland

44 P pp?Agencies like to think of themselvesas partners, but that is not realistic if they failto understand clients commercial needsB Derek Da

47 nv w g Tescos former CEO urges marketers to takeadvantage of these difficult timesB Sir Terr Leah

50 thgh h g gSeveral recent initiatives should make it easierfor women in the marketing and advertisingcommunity to earn a place in the boardroomB Janet Hull

32

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contributors

in this issue

Market leaderschallenge through onlineco-creation communities.

Derek Day is a foundingpartner of Passionbrand, andco-author ofCreating PassionBrands: how to build emotionalbrand connection with customerspublished by Kogan Page.

tom Doctoroff, North AsiaCEO of JWT, is one of Asiasmost respected marketingprofessionals. He is the authorofBillions: Selling to the NewChinese Consumerand What

Chinese Want, to be publishedin spring 2012.

mark earls is a recoveringaccount planner. Hisaward-winning writing andconsultancy work are based oninsights into human behaviour,gained from behavioural andcognitive science.

Douglas holt is CEO andco-founder of the Cultural

Strategy Group. Holt wasa professor at the HarvardBusiness School, and LOralchair in marketing at Oxford.

melanie howarD is chairof the Future Foundation.She has been successfullyforecasting trends for twodecades and has worked withconsumer, public-sector andthird-sector organisations.

Janet hull is responsible

for strategy, content andpromotion of externalmarketing programmes for theIPA, member association forthe top 250 UK advertisingand marketing agencies.

Jeremy Bullmore is a formerchairman of JWT London andthe Advertising Associationand is currently a member ofthe WPP advisory board.

PhiliP Burgess is a director atPromise Communities, whichhelps solve insight, innovationand brand strategy challenges

via online co-creationcommunities. He has consultedfor brands including Danone,PepsiCo and Starbucks.

hugh Burkitt is chief

executive of the MarketingSociety and has beenresponsible for the launch ofthe societys Manifesto for

Marketing and the MarketingLeaders Programme foraspiring marketing directors.

Douglas cameron isFounder and Chief StrategyOfficer of Amalgamated,a New York brandcommunications firm. He has

developed strategies, createdcommunications campaigns,and conducted workshopsfor a wide range of clients inNorth America and Europe.

leslie clifforD is executivedirector, strategic planning andconsumer insights at G2 USA.She has developed advertisingand promotional campaigns,digital marketing, loyaltyprogrammes, and multichannelshopper initiatives.

Priscilla Daniel is aconsultant at PromiseCommunities, whichhelps brands solve insight,innovation and brand strategy

anDy nairn is chief strategicofficer of Dare, CampaignsDigital Agency of the Decadeand the IPAs Effectiveness

Agency of the Year. He wasnamed the UKs top planner,byCampaign, in 2011.

DaviD nichols is managingpartner of the brandgym wherehe leads brand strategy andinnovation projects acrossthe world. He has publishedthree marketing books, threemusicals and managed animprovisation troupe.

marylee sachs is the formerUS chairman and worldwidehead of consumer marketingof Hill & Knowlton. Shelaunched her book, TheChanging MO of the CMO

How the Convergence of Brandand Reputation Has Affected

Marketers, in June 2011.

mary say is managing directorof Brand Potential, delivering

creative insight, innovation andengagement strategies. She has20 years experience of working

with brands, internationally.

charlie skinner is a brandconsultant who specialisesin using insight to advise onbrand and business strategy.

rory sutherlanD isvice-chairman of OgilvyOneLondon and Ogilvy GroupUK. He was formerly

president of the IPA andcurrently writes a column forThe Spectator.

To submit an article, email theeditor at [email protected]

sir terry leahy is a formerCEO of Tesco and one ofBritains most influentialbusinessmen. As marketingdirector he was responsiblefor the famous Tesco Loyaltyprogramme. He became CEOin 1997 and led the expansioninto Europe and Asia.

Doron meyasseD is anentrepreneur with a passion forcutting-edge technology. Hefounded Promise Communitiesand monitors technologicaltrends. He delivers consumer

closeness, brand strategy andinnovation programmes in thefmcg arena.

kamil michlewski is asenior consultant at The

Value Engineers, a strategicbrand consultancy. He has

worked with global blue-chipclients across industries onissues ranging from brandpositioning to multichannelmarketing strategy.

vince mitchell is Professorof Marketing at Cass BusinessSchool, London, andco-author ofReal People, RealDecisions. He has publishedmore than 250 articles onmarketing and has worked

with such companies as Boots,Coca-Cola and KPMG.

laura moser is executivedirector of retail marketingfor G2 USA. She works on

a variety of brands includingFord, Coca-Cola, Discover,Kraft, Campbells, Heinekenand P&G. She is a frequentcontributor toAd Age andShopper Marketingmagazine.

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Your essential source ofideas and inspiration.Warcs lively monthly magazine written by

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Ideasandevidenceformarketingpeople www.warc.com/admap May2011

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Infuencetheshopperjourney

BestPractice:ShopperMarketingPath ToPurchaseActivationResponseMeasurement

SportsSponsorshipOrganicPlanningandBuyingMcCainseCRMStrategy

10GlobalConsumerTrendsOutdoorAdEffectivenessBestPractice:Co-creation 1 .i 1

/1 / 11 1 : :


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Ou o of d fo oud od of

by winstOn Fletcher

b r a i n w a v e sDiFFerent thinking

The glory, the glamour, the gongs galore

with the endo one year andstart o another, throughoutthe country perhapsthroughout the world everyone spends time tryingto recall who in their sphereso lie deserve to be awardedgongs or their achievementsin 2011. In marketing wetend to think our businessesare unusually keen on suchcommunal backslapping.

Not so. Today, almostevery business and proession

is up to its neck in trophies.Hundreds o thousands opeople, rom all walks o lie,attend awards thrashes each

year, paying handsomely orthe privilege.

The major dinners takeplace in London, mostly onPark Lane. The Great Roomat the Grosvenor House cansqueeze in up to 1,500 people,

while a real biggie at Olympiawill manage 2,500. But similar

dinners, albeit on a smallerscale, take place in everychandelier-spangled hotel inthe country.

The guests will always dressto impress. The sponsors willcharge hety sums to enter thecompetition, inlated pricesor the dinner, ees to thedonors o prizes, ludicrousprogramme advertising ratesand other nice little earners,probably totalling around

50m a year in all. Its a small

but perectly ormed industry.Yet almost nobody attends

an awards bash either to beentertained or or the inediblegrub. Most view it as anunavoidable business chore.

8 Market LeaderQuarter 1, 2012

Brainwaves

Almost everybusiness is upto its neck in

trophies.Hundreds opeople attendawards thrasheseach year

The rest are either hopeulcontenders oh, the glamouro that triumphal walk in thespotlight or chums o thehopeul contenders. And the

organisers are adept at hintingto all and sundry that they arein with an excellent chance.

This delicate process might becalled gong-teasing.

Why have awards andawards shindigs becomesuch an indispensable parto business lie? A visiting

Martian would be bewilderedby our insatiable urge toring each others necks withgarlands. Quite simply,awards make us eel good

about ourselves. They helpus convince ourselves thatthe value o our work tosociety is ar greater than ismeasured by our measly littlemonthly payslips. This is the

just earning loadsamoney.The glittering prizes honourquality, accomplishment,excellence. They arean increasingly alluring

antidote to our increasinglymercenary world.But the truly neat trick is

that while pretending to gloriyhigher values, awards deliverthe shekels too. To the winnersthey generally deliver highersalaries, maybe extra salesand bigger proits too. This is

why, while many people mockawards, and moan about theircost, everyone still enters.

Merit and money indissolublyentwined: in the 21st century,

what could be better? n

Winston Fletcher writesextensively on advertisingand [email protected]

reason or the dressing up,the anares, the glamorous

venues, the amous compres

and the rest.They imbue the awards with

glory, with mystique withalmost religious signiicance.

To win a trophy, it all implies,is much more exalted than


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ThoughT for The dayking charLes is 12 goLden ruLes for deportMent at tabLe

FiOna mcanena

Market LeaderQuarter 1, 2012 9

This much

Ive learned

articulating things clearly andhaving the courage to do so.d m ...

The importance o meetings.Meetings arent work.t x m m ... I joined WPPKantar in a newly created role

with no job description andno plan to ollow, just a clearpurpose given by the CEO,Eric Salama. I learned to workrom irst principles and do

what would make a dierence.t m i ...Playing rock, paper, scissors asan energiser at a meeting o 150people rom all over the world.t mm ... Anew colleague I had not metphoned to complain abouthow one o my team, alsocalled Fiona, had been rudeto her on a conerence call. It

was worse or her though when I revealed it was me onthat call.My x... Is still ahead. I youkeep learning and making a

dierence then every stage isbetter than the one beore.

Fiona McAnena is theglobal brand director, BUPA(membership)[email protected]

t i ...When I was a graduatetrainee, a sales manager whospent every lunchtime in thepub told me: Everyone hassomething to teach you.t i ... When I arrived in a newcompany as CEO, a veryexperienced account man told

me not to bother getting toknow a major client as he hadit under control. O course, welost the business.d m ...How you can help and liberatepeople around you just by

Brainwaves pages are edited by Elen Lewis, editor of

The Marketing [email protected]

b r a i n w a v e s

DiFFerent thinking

10 things we

discovered this autumn1Jimmy Savile andMargaret Thatchercelebrated New Years Evetogether or 11 years in a row.

2Young Chinese girlsin Hunan provinceused Nushu, a languagethat no men could read,to communicate with oneanother.

3

The orces involved when a woodpecker drills at a tree areup to 1,000 times stronger than gravity.

4New homes in Denmark are 80% bigger than new homes inthe UK.5In 1941 the Government in the UK wanted to know howmany bras women owned.6Britain has 800 major sel-storage units, the same as the resto Europe put together.7The average Briton suers 726 hangovers in alietime.8Apples market capitalisation is $340bn more than theeconomy o Singapore, or all the illegal drugs in the world.9Fiteen per cent o European monarchs who lived between600 and 1800 were murdered. Their risk o violent death wasmore than 700 times greater than their subjects and seven times

greater than young black American males today.

10In Britain, growing apart (27%) has replaced inidelity(25%) as the top reason given or marriage breakdown.

From Notes and Queries, 14 March 1863, viautilitycloset.com


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DiFFerent thinkingb r a i n w a v e s


DiFFerent thinking

five ways To

undersTand happiness1 d mmy x; between being happy inyour life and being happy with your life.

2 c l. The experiencing self lives in the present, and

there is the remembering self who maintains the story of our life.

3 t mm l yll. Our memory tells us

stories that is, what we get to keep from our experiences is a story.

What defines a story are changes, significant moments and endings.

4 t x l l l ly. The psychological

present is said to be about three seconds long, which means that, in a

life there are 600m of these moments, and most dont leave a trace.

5 t . Happiness for the

experiencing self is about happiness for moment. For the remembering

self its about how satisfied the person is when they think about their life.

Daniel Kahneman was awarded the Nobel Memorial Prize in 2002 for

his pioneering work in behavioural economics. Watch The riddle of

experience vs. memory on TED.com.

Words worth

the greatest short story everwritten is just six words longby Ernest Hemingway. Babyshoes. For sale. Never worn.

The power o six words.Opening lines are so

important in business writing.Whether its the subject line inan email or the irst sentencein a presentation, these words

will grab or lose your readersattention in a moment.

One o my avouriteexamples o punchy headlinescomes rom Sir HaroldEvans, ormer editor oTheSunday Times. He said: I Ichoose to head an article AnInquiry into the Conditionso Mycean Civilisation in theHeroic Epoch, with SpecialReerence to the Economicand Domestic Functions o

Women Beore and Ater

the Conjectural Date o theArgive Expedition againstTroy I really have noright to complain i (whenI send it to the ChicagoDaily Scoop) they alter itto How Helen Did theHousekeeping.

Consider some o the bestopening lines in novels. FromLP Hartleys The Go-Between:The past is another country:they do things dierentlythere. Or TolstoysAnna

Karenina: All happy amiliesare alike, each unhappy amilyis unhappy in its own way.

So how can we use theselessons in literature or

writing in business?1.Write your headline (youremail subject line) last. Thishelps reduce writers block.2. Spend as much time on thebeginning as you do writingthe rest o your text.3. Start writing whicheverpart you eel most comortable

with. Just get the words down.4. Put the most importantinormation irst and then

provide the context.5.Avoid beginning withclichs like, as you know orI hope you are well. Make itspeciic and relevant, includethe details. n

[email protected]

as a red and blue lycra-cladWonder Woman ker-powedonto our screens, another

wonder woman o sorts wasmaking an impact. Margaret

Thatcher, leader o theopposition party, had engagedSaatchi & Saatchi ad agency tohelp win the General Election.

Although the electiondidnt take place until theollowing year, 1978 saw arat o political advertisingincluding the memorableposter campaign Labour isnt

working. The ad had a hugeimpact, largely because it wasdenounced by Labours Denis

Healey in Parliament.A striking series o

photomontages and cinemailms or B&H Gold, byCollett Dickenson Pearceat the peak o its success,eatured the gold packo cigarettes in varioussurreal juxtapositions andtransormations, devoid o

words and people.1978 was also the year o

electronic games. The Atari2600 with its woodgrainconsole and stubby rubber

joysticks became a livingroomixture in many homes,eaturing games such as Tennisand Space War. Then there

was Simon, a plastic circle withour-coloured quarters thatlashed and beeped.

Across the Atlantic, twomen called Ben and Jerry

opened an icecream parlourin a renovated petrol stationin Vermont. n

Golden brands of 1978i of 50 od d, of

od o, od d a 2600

1961 snapshoTb: John Irving published The World According to Garp;Plentyby

David Hare.

e: First test-tube baby born; Polish bishop, the first non-Italian for

400 years, becomes Pope; Spain set to vote for democracy.

flm:Grease; Superman.

M: The Boomtown Rats knocked Greases Olivia Newton-John and

John Travolta off the top spot of the Top 10 chart .

wt t k cmtt t t? h g

xt cm, t t f dl Ct t

..cm

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b r a i n w a v e s

DiFFerent thinking

Blogbytes: when strategy is execution

in newYork in the early1960s, a truly seminal adcampaign broke. Posters inthe subway, showing dierentethnic types eating sandwiches.Black, Chinese, Italian, Irish,Native American. Above eachone, the headline: You donthave to be jewish to love Levysreal Jewish Rye.

Maybe right now thatdoesnt seem so daring. Butremember this was the Mad

Men era o advertising.The time when everyone,in all the ads, aspired to be a

WASP (White, Anglo-Saxon,Protestant). Men were onlyshown wearing suits and ties,

women wore pinaores and hadponytails, and all the children

were blonde and reckled.So it was actually really

daring to do advertising that

eatured ethnic minorities.Not only that, it was rare

to do advertising that madea big deal about the act thatthe product wasnt made by

WASPs; and that actuallyhad the word JEWISH in theheadline.

These ads celebratedthe act that New York wasmore ethnically diverse thananywhere else. I always knewthey were among the best

advertising Id ever seen,but I only recently heard thewhole story. And it has asmuch to do with the strategyas the creative. It started whenDoyle Dane Bernbach wasstill a tiny agency. One o itsaccounts was Levys Bakery inBrooklyn. Whitney Ruben,the head o Levys, told BillBernbach they had a problem

with rye bread, because it wassold packaged.

Rye bread wasnt so much a

Jewish bread as an immigrantbread. And the immigrantspreerred it resh. So theydgo to the local bakery or it,instead o getting it packaged,rom the supermarket.

Bill Bernbach said: Theproblem is, you need to appealto a wider audience than justimmigrants. Where are yourunning your ads? Ruben toldhim they ran the ads in the

New York Postbecause it hadan 80% Jewish readership.

Bernbach said: But Jewsalready know about rye bread;

we need to get to the peoplewho havent tried it yet.

And he persuaded them toadvertise in the ood sectionso the World-Telegram andtheJournal American. And it

worked: sales took o.Then, in a master stroke,

Bernbach persuaded them tochange the name. We needto make it more ethnic, give

it more credibility. We needto change the name to LevysReal Jewish Rye. WhitneyRuben was horrifed. He wasscared about an anti-Semiticbacklash rom the retailers.Bernbach said For Gods sake,

your name is Levys. Theyrenot going to mistake you orHigh Episcopalian.

And eventually they agreed.And they ran the ads that notonly changed New Yorkerseating habits, they celebrated

New Yorks ethnic and culturaldiversity. And in act they

were the precursor o the I(heart) NY campaign.

Customers at delis nowadaysroutinely speciy particular

by Dave trOtt

bread. People automaticallyadd on white or on rye withtheir pastrami, or tunafsh, orbologna. And, incidentally, atthe same time Bernbach hadrepositioned the competition.He called Levys Real JewishRye, thereby sewing the

doubt that not all rye breadwas Real Jewish Rye. Levysbecame the biggest sellingbrand o rye bread in the city.

Then the biggest in the state,and eventually in the entirecountry. At delis all over

America, sandwiches are nowoered on New York StyleRye Bread.

Bernbach moved rye breadbeyond being merely a type obread, to being a symbol orNew York City.

Dave Trott writes a monthlyarticle on The MarketingSocietys blog. http://[email protected]

Then, in amaster stroke,Bernbachpersuaded

them to changethe name


12/60

From andy nairn

The new line: in-house or outsourced

marketing services

Ideas & issues

12 market LeaderQuarter 1, 2012

not so long ago, agencieswere classified using animaginary line, whose originsstemmed from 19th centuryaccounting terminology1.In recent years, that dividehas almost disappeared, asbelow-the-line operators

have railed against thesnobbery of the terminologyand above-the-line shopshave rushed to proclaimtheir integrated credentials.However, a new line has

emerged and it has bothprofound and practicalimplications for agencymodels going forwards.

The new line describes thedegree to which an agencyoutsources or not. Of coursethis is a question which all

businesses have to wrestlewith these days, typically forcost-related reasons. But formarketing services companies,it has been exacerbated by twoadditional issues.

The caTalysTsOn the one hand, there hasbeen a growing demand fromclients for more joined-upadvice. Marketers haveseen the fragmentation ofmedia and channels, spottedthe danger of inconsistent

brand experiences acrossthe customer journey, andbecome frustrated withagencies traditional silostructures. This has, in turn,prompted many agencies to

bring a much wider range ofskills in-house, so that theycan offer a more holistic view.

On the other hand, therehas also been a growingdemand from clients forspecialist skills and advice.

Marketers have recognised

that the very fragmentationdescribed above makes it verydifficult for any one companyto do everything equally well.

This has, in turn, promptedother agencies to adopt a

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much looser model, wherebyonly a core management

team is retained, and otherspecialists are pulled in, ona freelance or subcontractedbasis, depending on thetask in hand.

The pros aNd coNsThe interesting thing is thateach agency model has astrong rationale, underpinnedby cultural trends and clientdemands.

Advocates of the in-houseapproach argue that they canexert much greater qualitycontrol over the thinking andcreative product, by keepingthem close to home. Theyeven claim that they can offerbetter value, by removingthe need to relearn forevery project, stripping outduplication and third-partyoverheads, and avoiding heftyfreelance fees.

Meanwhile, fans of theoutsourced approach (often

called the Hollywood modelas it mirrors the way in whichstudios assemble teams) replythat it is actually they whocan provide better quality, bypicking from a wider pool oftalent. Similarly, they claimthat it is they who can achievekeener value, by paying forpeople only as and when theyneed them.

So which side is right?Well, both and neither. And

thats where the line comesin. Where do you drawthe line? The truth is thatthe polarisation which Ivedescribed above doesnt reallyexist. No agency in the worldseriously claims to offer everysingle marketing service,equally well, under one roof:there will always be somediscipline which they lack forone reason or another (be itdata, media planning, webbuild, search, PR or whatever).

Likewise, no seriousplayer advocates theoutsourcing of everything:

while a handful of virtualcreative agencies have sprungup, they do not look like

achieving mass any time soon,and in any case tend to retainsome form of central editorialcontrol, at the very least.

Instead of two opposingcamps then, there is reallya much subtler spectrum ofapproaches. Nobody operatesa purist model. Everybodyis somewhere in the middle,trying to figure out exactly

where to draw the line. Thereis no wrong or right answer,but there are some keyconsiderations which agenciesshould mull over beforeadopting a stance.

some oThercoNsideraTioNs

The first factor to take intoaccount is perhaps agencysize and life cycle. Unlessthey are blessed with wealthybackers, start-ups willnaturally gravitate towardsa more outsourced modelbecause they have neitherthe workload nor incometo justify a host of in-house

specialists. More establishedagencies may well incline tothe opposite point of view,in an attempt to generateeconomies of scale from theirexisting workforce.

Related to this is thequestion of cost. Certaindisciplines need heavierinvestment to set up thanothers media buying beingthe classic example becauseof the systems required, dataanalysis being another. Even

established agencies maybaulk at these costs and preferto outsource instead.

In contrast, other servicesmay command relativelyhigh fees and margins

market LeaderQuarter 1, 2012 13

>

over to you


(brand consultancy, forinstance), making them moredesirable to bring in-housefor financial reasons.

Another key factor is, ofcourse, client needs. Whetheragencies like it or not, thepeople who pay the bills willalso have a major say in whereto draw the line.

Smart shops will havea constant eye on theever-changing needs of theirclients, anticipating the needfor new marketing servicesbut also crucially deciding

whether these needs would

be best served in-house orexternally.

Honesty is the bestpolicy here. History islittered with agencies whohave overclaimed abouttheir internal capabilitiesor, at the other extreme,outsourced too carelessly.Either way, the truth willout, so its better to take anobjective stance in the firstplace, based on the clients

best interests.Last but by no means least,theres the agencys vision.For instance, a start-upsfounders may simply believethat a particular disciplinemust be kept at the heart ofthe agency, regardless of size,cost or current client needs.

Alternatively, a moreestablished company mayresist the temptation to take aservice in-house, despite thefinancial possibilities and

client demands, because itmight change the culturefor the worse.

These are principledpositions which are oftensubsumed by the first three,

more pragmatic, factors.However, this is exactly

where they derive theirpower: by taking a visionarystance, in spite of morepractical pressures, an agencycan differentiate itself andprosper in the long term.

KeepiNg aN opeN miNdIt should be obvious fromthe above that each agencymust decide for itself

where to draw the line, ona discipline-by-disciplinebasis. But just as importantly,it must continuallyreview this position ascircumstances change.

A new hiring maybring specialist skillsin-house (or a departeemight take such expertiseaway, and not be worthreplacing). A client win orloss could be equally telling.Relationships withexternal partnersmight improve or deteriorate.

Technological advancesmight change the relativecosts of in-house andoutsourced options.

As with most things inbusiness nowadays, the

winners will be those whoare flexible enough to adapt.But the challenges outlinedabove are not going to goaway, and they will impacton everything from hiringpolicy to remuneration,

creative approach tooffice design.So even if your line is

drawn in the sand, ratherthan carved in stone, you

will still need to draw itsomewhere. n

Andy Nairn is chie strategicofcer at Dare, and head [email protected]

1. The precise origins of the

phrase are lost in the mists oftime. Most writers trace it back

to the different sections of a

balance sheet, although others

claim the phrase had its roots in

film-making.

As with most things in business, thewinners will be those who areflexible enough to adapt. But thechallenges are not going away, andthey will impact on everything


14/60


over to you


Should public relations be part o marketing?

not so long ago publicrelations executives had tofight for a seat at the tableto be heard, to plan, toplay an integral role in theorganisations business thetable being the board ofan organisation or a seniordecision-making group.

Now, public relations (PR)has risen in such importancethat a debate has emergedover where it should sit withinan organisation. CMOs andthe senior-most marketingleaders are fairly unanimousthat at least part of the PRfunction should reside withinmarketing departments, andin many cases, CMOs alreadyhave laid claim to PR withintheir own organisations.

What has prompted thequestion and sparked sucha healthy debate over theownership of PR? Certainlythe growth of social media andthe necessary skills to navigatetwo-way communication havegiven PR an edge over moretraditional push, one-waymarketing approaches. Andas reputation, credibility,authenticity and transparencyhave become more important

to consumers, PR hasemerged as a key element ofthe marketing mix.

But while all indicatorsare pointing to increasedeffectiveness when the twodisciplines are combined, thebattle continues to brew over

who reports to whom and howthe disciplines work together.

BalaNce of powerMany PR professionalsconsider the statement PR is

part of the marketing mix asblasphemous because, in their

view, PR is a much broadermanagement discipline thatshould report directly to theCEO in all cases.

From maryLee SachS

pubLic reLations

At the same time, somemarketing executives areprofessionally jaundicedtowards PR, considering itonly tactical at worst, and animprecise practice that is toodifficult to measure at best.

Many organisationsare struggling with theoptimum mix of disciplinesto best harness influenceand advocacy, particularly

with the increasinglyempowered consumer madepossible by social media.

The shift in power for PR isnew, and only just startingto take hold within someorganisations, while othersare only just beginning toconsider the options.

Marketers are embracingPR and agree that integratedcommunications increaseoverall effectiveness, but

while marketing and PR

have formalised workingrelationships in some cases,data suggests that formaldoesnt necessarily meanfunctional, accordingto a study undertaken by

aligNed oBjecTives

In many cases, structures arenot even formalised. A 2009study of 114 CMOs byForbesreported that advertising(92%), research (85%) andPR (73%) are top functionsfalling under the purview ofmarketing, followed distantlyby internal communications(58%) and corporate socialresponsibility (51%).

But according to a 2010survey of CMOs by TheCMO Club, while thesynchronisation of brandreputation and brand imageis more critical than ever,more than half (52%) ofcompanies are not fullyaligned between marketingand communications.

CMOs who report thehighest levels of alignmentbetween marketing and PRestablish objective-setting

with blended and collectiverewards. Firms where jointmetrics and joint rewardssystems have been created(66%) or joint objectives

without joint reward systems(71%) report much higherlevels of being fully alignedcompared with firms where

objectives are not shared(31%) or where objectives areshared only for informationpurposes.

The growth of digitaland social media hascontributed to a newlandscape where marketerslack control over howtheir brands are perceived.Credibility, trust andrelevance are becomingincreasingly importantto consumers who view

traditional marketing andadvertising as irrelevantand suspect. The conceptof truthiness, a wordcoined by Americantelevision comedian Stephen

The growth ofsocial media andthe skills tonavigate two-waycommunicationhave given PR an

edge over moretraditional pushapproaches

Vocus surveying 966 PRprofessionals about theirperceptions of integratedcommunications.

Despite formalisedprocesses or structures,34% cited organisational

structures, functional silos,or turf battles as the singlelargest barrier to integration.

The next largest barrier isbudget shortcomings notedby 20%.


15/60market LeaderQuarter 1, 2012 15

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>

Colbert, has underlined the

importance of transparencyand has popularised it withinurban culture.

PR can step in and addresscredibility issues by providingauthenticity and relevance dueto its conversational natureas well as the element ofthird-party endorsement andadvocacy.

pracTical helpPR can also provide the glueacross paid, owned and earnedmedia channels. Accordingto a Nielsen report onadvertising effectiveness, thekey to success for marketersis creating a mix of socialimpressions that incorporateboth paid and earned media.

Social advocacy and earnedimpressions can impactconsumers in three important

ways: by making themmore likely to notice an ad(ad recall), to take away its

message (awareness), andto increase their interest inmaking a purchase (purchaseintent). The next step is toexpand this understanding tooffline sales and long-termbrand value.

Even Forrester suggeststhat owned and earned mediabecome as important, if notmore important, than paid(bought) media.

Although there will always

be a role for paid media, itdoes face several challengesincluding an increasing levelof clutter, falling responserates, and less credibility thanowned and earned media.People simply dont trustpaid media as much as othersources of information.

More than 40% of USadults online agree with thestatement: The experience Ihave with most products doesnot equal the promises made

by their advertisements. Itis certainly in CMOs bestinterests to expand theirpower base and own thefunction that can addresssome of these issues.

crisis maNagemeNT

And lets not forget the wholearea of crisis management andcommunications. In what washailed mid-2010 as the yearof the recall byAdvertising

Age, PR professionals haveenjoyed new-found respectas able navigators of anuncontrollable environment in

which negative word of mouthcan be exponentially painful tobrand health.

Undoubtedly, the myriad ofaspects and issues connectedto social media have providedthe practice of PR with theopportunity to take a morecentral role in marketing, andthere even appears to be atrend for senior executives withPR backgrounds to take thehelm of marketing departments

within organisations.

plaNNiNg aheadWith CMOs roles expanding,how best can they prepare

for their new responsibilities?Who should be in theirkitchen cabinet? Where canthey get the best advice?

PR grounding can bethe polar opposite of theother marketing disciplines.If PR is a less-understoodand sometimes maligneddiscipline, how can CMOsfully utilise and leverage it?

In The Changing MO of theCMO we explore how some

organisations are making themost of a blended approachthrough a series of interviews

with CMOs who, in their ownright, are change agents intheir organisations.

All of these CMOs havebeen in the communications/PR business at some pointin their career so they havea different perspectiveon the roles and how thedisciplines are best combinedto greatest effect. n

Edited extract rom TheChanging MO o the CMO byMaryLee Sachs, published byGower Publishing [email protected]

From tom doctoroFFAccounting or tastes

chinas reLationship withfood is a window into basicinstincts. The countryscuisine is a manifestation ofa civilisation that has nevertaken survival for granted. Anunderstanding of what andhow Chinese want to eat isa quick way to know China.

With the ever-popular dimsum of Guangdong provinceliterally meaning touch theheart, its fair to say that foodis a window into the Han soul.

In most categories, localbrands including Mengniu,

Yili (both dairy companies)and COFCO (everythingfrom chocolate to pork) rulethe roost. Although Chinesecravings differ from those of

Westerners noodles, notburgers, are comfort food it

is a myth that people rejectforeign food brands simplybecause they are foreign.

Western marketers wereslow to enter China andmade huge mistakes. Kellogg,for example, launched coldcereal, an alien category, atprohibitively high prices.Since then, many others havemade significant progress.

local KNowledge

From Kraft to Nestl andDove to Coca-Cola, brandshave tailored productsto suit Chinese tastes.Recent successes Liptonmilk tea, Danone fortifiedcalcium biscuits, Pizza Hutsseafood lovers pizza aretestaments to the powerof empathetic insight.

Yum! Brands KFC menulocalisation has beenparticularly impressive.

Hot wings and chicken

burgers are the biggestsellers, but the menu alsoincludes products suchas Beijing Chicken Roll,Golden Butterfly Shrimp,Four Seasons Fresh Vegetable

Salads, Fragrant MushroomRice and Tomato EggDrop Soup.

The following are a few

basic principles of marketingfood in China.Delicious balance. Chinesecuisine is tremendously varied Shanghai food is sweet andoily, while Sichuan dishesare hot and spicy but thebalance of yin (cooling) and

yang (heating) is importanteverywhere. From stir-friedbeef with broccoli to sweet-and-sour pork, dishes shouldbe harmonious.

Yin foods, not necessarilylow in temperature, includetoast, bean sprouts, cabbage,carrots, cucumber, duck,tofu, watercress and water.

Yang foods include bamboo,beef, chicken, eggs, ginger,glutinous rice, mushroomsand sesame oil. China willnever be a coffee culturebecause beverages should becooling, but Nestl three-in-one coffee is a hit becausesweetness balances bitterness.

Illness is perceived to springfrom yin and yang imbalance.Heat patterns (eg headaches,bleeding) are remedied withcooling foods while excessive

yin (eg runny noses, night

marketing food in china

Chinese cravingsdiffer from thoseof Westerners,but it is a myth

that peoplereject foreignfood brandssimply becausethey are foreign


16/60


over to you


sweats) are cured with heating

foods. Chinese arent lactoseintolerant, but dairy products,including ice cream, areperceived to be damp. Eventoday, milk sales increase ifaccompanied by somethingdry like bits of wheat.Saety: never assumed.Counterintuitively,international brands arepreferred to local brands,assuming compatibility withlocal taste and acceptableprice. This is because Chinesenever take safety for granted.

Prior to the 2009 tainted-milk scandal, local dairy brands

were known for purity. Butdairy manufacturers, in cahoots

with local officials, abused thistrust by adulterating products

with illegal ingredients. Thatswhy all leading brands of infantformula are foreign, despiteprice premiums of up to 400%.

Thats also why endorsementfrom central government

organisations such asnational dental and medicalassociations are highlysought after for any item thatgoes inside the body, fromtoothpaste to orange juice.Protection is king. Chinesefear invasive elements, hencethe appeal of germ-killproducts in many categoriesincluding soap (Safeguard),toothpaste (Colgate, Crest,Zhonghua), mouthwash

(Listerine), air conditioners(Midea) and even dishwashers(Little Swan).

It is, therefore, notsurprising that foodsthat promote immunityare embraced. Infantformula, again, is a case inpoint. Every brand mustdemonstrate resistance todisease before moving on toperformance benefits. Physicaltransformation, on the otherhand, has less appeal. Bigger,

stronger, taller babies are notobjects of admiration; everymother wants her child to beperfectly normal.

Emotion protection isimportant too. Breakfasts are

warm and soft, nourishinghugs that moms give familiesbefore they dive into a cold

world the Chinese dontcrunch before noon, so coldcereal will always be niche.Special K would be mosteffectively positioned as a

womans energy bar.Advancement always. Oncephysical safety is a given,food becomes a weapon inthe game of life. First, mostnutritional benefits ladderup to academic excellence.Energy is closely linked

to intelligence or, morespecifically, concentration andquick-witted resourcefulness.

Calcium strengthensboth bones and brains. In adog-eat-dog society, a sharpmind, not a buff physique,is the difference betweensuccess and failure. Second,convenient foods are a meansto an end. They provide thefuel needed to start every day

with a kick, so every indulgentfood must also be good for

you, a sugar-coated pill.Third, transformation

benefits have growing appealfor the mature market.Dietary supplements,particularly in first-tier cities,

help the older man perform

on the basketball court andat the office. Osteoporosisscaremongering is old school.

In the hyper-competitivebusiness world, the comfortof food lubricates trustand transactional gain.Partnerships are tested inChinese restaurants at roundtables in private rooms.Dishes are meticulouslychoreographed. Properseating must be respected,

with the guest of honourplaced directly opposite thedoor, flanked by his hosts.Serving oneself prematurely isafaux pas. Leaving before thefruit comes is bad.Familiarity at home. Aglance through any citys expatguide gives an impressionthat Chinese people areculinary adventurers.Shanghais restaurant scenerivals any American orEuropean city. Mexican, tapas,

Japanese, Western brunches,AsianFrench fusion, JohnnyWalker parties, glamour clubs,wine bars... the list is endless.But, deep down, the Chineseare restrained about foreignfood or new tastes.

Inside the home, a refugefrom the outside kaleidoscope,they are loath to experiment.Pizza Hut will receive deliveryorders for office parties, butrarely for consumption at

home. Despite Starbuckshaving outlets, roast andground coffee is not purchasedin supermarkets. Italianrestaurants are ubiquitous in allmajor cities, but few Chineseenjoy pasta with the family.

In public, anything goes.People pay a premium toproject internationalism,hence Hagen-Dazs successas an icecream parlour butfailure as an overpriced in-home treat. With professional

acquaintances, the world isa stage. n

Tom Doctoro is CEO,Greater China, o [email protected]

Western

marketers wereslow to enterChina and madehuge mistakes

cn n bt t bn n (n) n n

(tn) tnt b n


17/60

Deending the budget in difcult timesmarketers need to defendagainst potential cuts inmarketing budgets and mustbetter explain the case formarketing expenditure inaustere times.

Most studies confirm thatadvertising and promotionalexpenditures in recessionsproduce ROI, contributingmost to earnings in the yearof expenditure, but alsobeyond up to three yearsfor consumer goods and two

years for industrial products.(Interestingly, this effect doesnot happen with services.)

When we do get anincreased ROI for B2Cor B2B, there are severalreasons:l firms can achieve agreater share of voice as

most companies cut backmarketing spend during arecession;l advertising increases boththe salience of the product toconsumers and the perceivedbrand quality;l counter-cyclical promotionboosts consumer confidence,helps overcome inertia andsends reassuring signals toconcerned consumers;l it reinforces the reasons for

brand choices in uncertaineconomic times and helpsjustify premium prices;l it attracts the increasednumbers of brand switchers

who are less loyal and moreopportunistic in a recession,if more promotional spendis put into call-to-actionand point-of-sale-orientedactivities; and finallyl market share is easier toget as competitors are toohard pressed to defend their

position vigorously.Firms that manage to

increase marketing spendand do proactive marketingduring a recession, leadingto increased business

From vincent-Wayne mitcheLL

marketing in recession

performance, share a numberof characteristics.

They have a strategicemphasis on marketing, an

entrepreneurial culture,slack resources (ie resourcesthat are in excess of theminimum necessary toproduce a given level ofoutput, such as underutilisedhuman resources, unusedproduction capacity, excesscash resources), and strategicflexibility, which is the abilityto rapidly redeploy resourcesto adapt to changingcircumstances.

There are some brand-

specific factors that couldhelp marketers persuadetheir CFO to release moremoney. For example, if thebrand enjoys money-savingpoints of superiority, or

if it has a balance-sheetadvantage over rivals andthus competition is unableto respond to aggressive

marketing increases, or if thebrand can demonstrate thevalue of quality and has a largemarket share.

CFOs unfortunately havetheir own arguments forreducing marketing spend.Here are the key objectionsand arguments to refute them.l Consumers have lessdisposable income and willnot be spending anyway. Torebut this, research showsthat for a 1% change in GDP

there is a 1.4% change inadvertising expenditure, sooften the marketing spend iscut disproportionally.l We need to appeaseshareholders through

over to you


market LeaderQuarter 1, 2012 17

>

Market share iseasier to get ascompetitors aretoo hard pressedto defend theirposition

vigorously

ln t t n nt tn ntn


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From mary Say and charLie SkinnerIs unisex option over?men andwomen may besocial and legal equals, but

we are wired differently byour genes. These differencesinfluence how we consume.

After years of unisexpositioning aiming to pleaseboth men and women at thesame time, consumers arestarting to choose brandsthat give them the chance tocelebrate their masculinity andfemininity.

Recently there has beena revival of old-fashionedfemale pursuits such asmaking cupcakes andknitting; while men areindulging in pick-up trucksand gaming. Are we goingbackwards and turning backthe clock on feminism andfemale empowerment? Will

our daughters turn theirback on careers to focuson homemaking, and willour sons avoid cooking andcleaning at all costs?

Not as far as we can see.Real progress has been madein the past 20 years; men and

women are moving towardssocial equality, and there hasbeen a merging of mens and

womens roles.

chaNgiNg placesWomen have moved intothe workplace, and menhave moved into the kitchen,though apparently they alwaysleave the cupboard doorsopen. As mens and womensroles merged, role modelsemerged to match. DavidBeckham represented thefeminised, metrosexual malein his sarong, while predatory

Jordan took ladette culture tonew levels.

Yet the desire to go backto traditional roles has acompelling rationale behind it.

We may be social equalsbut that doesnt mean weare the same men are still

from Mars, and womenfrom Venus. Role modelsseem to be changing: CherylCole is a traditionallyfeminine role model, whileBeckham is looking distinctlymanlier and Bear Grylls isemerging as a tough malerole model.

The verb to man up hasentered the dictionary andmen and women want tocelebrate and indulge theirseparate identities.

So theres no need to worry were not turning back theclock on feminism. Its justthat after years of advertisingeither ignoring the issue withunisex positioning or tryingto follow the new manand new woman, it looksas though men and women

want to be treated in moretraditional ways.

In a world where male andfemale roles have merged,every now and then men and

women want to escape backto a world where roles aremore separate and to brandsoffering an engaging way ofdoing this.

New sTraTegiesGender provides a compelling

source of stories. Brands canuse gender in their strategiesin various ways. Gender-isea unisex category: samebrand, different story. Safehaven: an enclave in the othergenders territory.

1Gender-ise a unisexcategory. Strategy: Takea category where

brands are unisex and createa gender-ised personality.

There was a gap in themarket for free magazines for

commuters in London, whichspoke directly to men or to

women. Stylistmagazine hasenjoyed huge success, and wasrecently voted Britains BestNew Magazine.

gender agenda

continued dividendsdisbursements. Again,the evidence shows thatinvestor confidence declinesfor firms that discontinuecorporate advertisingcampaigns and that annualgrowth in shareholder valuefor companies that do nottie their ad spends to thebusiness cycle is 1.3% higher.l Resources could bebetter allocated to product

development or R&D.The rebuttal to this is thatincreases in R&D have beenshown to lower profits forB2B and B2C firms, but havehad no effect on service firms,

while increased advertisingimproved profits for B2B andB2C, but not for service firms.l If everyone is cuttingback, we wont be hurt. Thisis only if the assumption istrue and even so, firms could

capitalise on the opportunityto seize market share ascompetitors cut back.

use a scalpelTwo arguments are difficult torefute, namely: media costsreduce in a recession; and we

just dont have the money.However, if you lose the

argument and have to cutyour budget, take a scalpelrather than a meat cleaverby: shifting from 30- to

15-second ads and usingcheaper radio rather than

TV, especially for reminderadvertising; advertising jointly

with a brand in a differentproduct category but same

target segment; adapting or

extending existing campaignsrather than commissioningnew ones; and trying toconsolidate advertising at asingle agency to maximisemedia buying discounts.

Whatever the outcome ofthe budget battle, steps can betaken to improve the efficiencyof a given budget in difficulttimes. For example, mostconsumers become more pricesensitive during a recession,but this can vary by a factorof 13 by market and marketsegment. So, check before youstart engaging in more anddeeper price promotion. Also,think about using websitessuch as Voucher Cloud whichcan be highly targeted, flexibleand time limited.

The product strategychallenge is to innovate atthe right price. Breakthroughinnovations can build firm

value significantly, while small

innovations preserve firmvalue. For example, Purexdetergent brand is succeedingin getting core customers tospend more on their laundryeven in thrifty times by addingan anti-static fabric sheet.

Finally, have the courage tobe bolder and more creative.For example, Universalsuse of the most influentialbloggers to promote theirnew Harry Potter ride, or

caring for homeless peopleon the iHobo app, orSmirnoff Vodka Experiencereplacing conventionalcampaigns with acombination of brandevents and parties andsocial networking sites tobuild a movement aroundthe brand. n

Full reerences o all thestudies are available rom theauthor on request.

Vincent-Wayne Mitchellis Proessor o ConsumerMarketing, Cass BusinessSchool, [email protected]

If you lose theargument andhave to cut

your budget,take a scalpelrather than ameat cleaver


19/60market LeaderQuarter 1, 2012 19

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The magazine

connects with women byacknowledging the manyfacets of their feminineidentity. It addressesthem at several levels: asprofessionals, as mothers,

wives and girlfriends andas simply women. Itscontent explores thetensions involved in

juggling roles andtime to achievea worklifebalance, alongsideunashamedlygirly momentsof indulgence(beauty, nails,hair).

For Stylist,the underlyingstory is of womenrediscovering andcelebrating theirfemininity. One ofthe challenges of thisapproach is to accept

that by focusing on onebrand and one gender youare subsequently writingoff half of the potential targetmarket. The benefit is that bydoing so, you create higherlevels of brand engagementand identification than

would be the case with aunisex brand.

2Same brand, dierentstory or men andwomen. Strategy: Target

both genders with the sameproduct/brand, but tell each adifferent brand story.

Bugaboo baby buggiespresents itself to men as acleverly engineered ruggedall-rounder, and to women asa must-have baby accessory.Bugaboos brand proposition isbased around progress. It getsthis across to men and womenin different ways.

The male story: Thebrand tells an engineering

story, Dyson-style, completewith pictures of the malefounder of the companyand his mission to solve acomplex problem, choose anew path.

3Sae haven: an enclave

in the other gendersterritory. Strategy: In

a market dominated by onegender, create a niche within

it exclusively for the other,minority gender. Just

over half of gin drinkersare women, yet the

feel of the categoryis overwhelminglymasculine.

Greenalls, thegin manufacturer,saw this as anopportunity, anddeveloped BloomPremium Gin the first premiumgin specificallyaimed at women.

The teambehind Bloom

wanted to createa brand that would

connect withwomen, be aligned

with their aspirations

and speak to themon their terms. The

brands backstory confirmsthis; created by the worldsfirst female master distiller,

Joanne Moore, it has a strongproposition (Steal a Bloommoment) that helps establishit in a male-dominatedcategory. Bloom is enjoyingstrong growth in the UK andSpain, and is about to launchin the US.

The social tensionssurrounding gender canprovide a potent energy,

which brands can use as aplatform to tell stories toengage consumers. Genderis a simple though oftenoverlooked way of gettingconsumers to identify closely

with your brand. n

Mary Say is managingdirector o Brand Potential.mary.say@brand-potential.

co.ukCharlie Skinner is clientservices director o [email protected]

In a world where male and femaleroles have merged, every now andthen men and women want to escapeto a world where roles are moreseparate, and to brands offering this

The female story: Thebrand tells an aspirationallifestyle story, placing theBugaboo as an essential allyin modern-day parenting.Grounded, practical,progressive and chic.

The two storiescomplement one another.

They are two different takeson the progress theme, as iftalking to men and women ina different language.


20/60

A seasonal guide toinsulting people

W knw what

w think abt

bands. Bt what

d bands think

f s?Jmy

Bullm

spcats

Ive wrItten about this before and it continues tointrigue. We spend a great deal of time and moneytrying to find out what people think about brands.But at least as fascinating is trying to deduce, froma careful study of their Special Offers and theirCreative Approaches, what brands clearly thinkabout us.

They think Ill buy a PC that Ive never wantedbecause it now costs less. So they think Im stupid.

They think Ill pay for a Titanium Credit Cardbecause it will impress head waiters and upsetmy golfing partner. So they think Im petty andsocially insecure.

They think Ill be tempted to spend anexpensive weekend in a remote and draughtymansion because it has real log fires and oncebelonged to a person with a title. So they thinkIm a snob.

But what, I asked myself recently, do thepurveyors of Christmas Premiums think of theirprospective recipients? Or to make it even more

deliciously complicated: what do the purveyorsof Christmas Premiums think that those who buytheir Christmas Premiums think of the peoplethey plan to give them to?

Having spent far too long looking though acatalogue of branded seasonal gifts and gewgaws,the answers obvious. The entire collectionis designed to appeal to David Brent; eitherto appeal to him personally or as a means ofhumiliating others.

His interests include eating, drinking, bullyingand showing off. How many people do you know

who use swizzle sticks? Fifty years ago I knew

someone who kept a gold swizzle stick in a weskitpocket, moored by a slim gold chain. Today, youcan buy David a packet of ten branded swizzlesticks for as little as 10p.

Or you could send him a Christmas card (bit ofa snorter, this) that triples in size when releasedfrom its envelope. Hell really enjoy putting itback in its envelope and then pulling it out againin Jessicas face: just look at her expression!

Mugs are always welcome but heres a twist:The AntiBug mug. Its a small but mighty mugthat kills on contact as many as 50 different bugsincluding MRSA and E.coli. On reflection, David

would probably prefer to give one rather than get

one: preferably to his rival down the road with awitty note attached.

But theres a pair of printing stamps hed reallyappreciate (at only 9.99). They save time andpainful thought when responding to writtensuggestions from apprehensive juniors. One has

a thumbs-up sign and says LIKE! And the otherhas a thumbs-down sign and says DISLIKE!

Thats the one that David prefers. He can dismissten conscientiously considered ideas in as manyseconds; and thumping the stamp with his fist givehim an adrenaline charge of naked power. Hesalways admired Lord Sugar.

Only 14.95 buys you three Personalised GolfBalls. You can have your clients face printed onthem in full colour and hell be thrilled. And Davidcan hug himself and go on about it in the pub at thethought of his client doing to himself exactly whatDavid had always wanted to do to him: and thatshit him viciously out of sight. Oh my.

Wi-fi Bathroom Scales cost 149.99 but forthe right senior colleague, theyre well worthit. If hes podgy, hell get your point right away.(Even wittier for women!) Wi-fi BathroomScales monitor just about everything about you,including Fat Mass and transfers it wirelesslyto an iPad or computer! Enlist the help of your

IT department: and your bosss Body Mass Index,and how far it departs from the recommendednorm, could be displayed on every desktop onthe management floor. Better than karaoke forthe office party! (And dont forget the Bacon and

Absinthe Range of Christmas Smellies; the girlswill really appreciate the Bacon Lip Balm.)

Heres one that David would love. Davepretends to despise celebrities or Slebs, ashe wittily calls them. Secretly, of course, Daveloves Slebs and could win any pub quiz on thesubject comfortably. So why not give Dave A VIPNight Out?

Give them enough money, and make-believebodyguards and make-believe paparazzi willpretend that Dave is a VIP; snapping away withelevated cameras and manhandling him and hisgang though the make-believe surging crowdand round the end of the velvet rope into someunappealing basement. And with pictures later toprove it all happened.

But if you can afford it, give Dave a VillainChair. As its caption tells us: Recipients of thisimposing chair can act out their Sir Alan fantasies.

At 4,500, its not a snip. Its worth giving only ifits recipient will be reasonably certain that youremocking him rotten but not so certain that hell

feel able to challenge you. Instead and oh, thejoy of it hell have to say thank you. And you,demurely, will be able to say truthfully: Themoment I saw it, Brendan, I thought of you. n

[email protected]


jeremy Bullmore

c h o p p I n g B L o c k


21/60

One day, this ad will saveyou time and moneyA strong, lastingrelationshipbetween client andagency is essentialin providing thefoundation on

which to creategreat advertisingand marketingcommunications.

Thats why, when thetime comes to choose anew agency, its vital tofind the right one for you.

ChoiceHowever, the search and selectionprocess can be both costly andtime-consuming. With anestimated 3,000 agencies in theUK to choose from, theoverwhelming choice alonebecomes a stumbling block.

Agency ListThats why the Institute ofPractitioners in Advertising (IPA)created Agency List, a dedicatedweb resource allowing clients tocompare all of its memberagencies. Arguably the bestagencies in Britain are featuredhere, each represented by its ownweb page listing the key

information required to help youmake your choice. The consistentpage design allows for ease ofcomparison between agencies and,best of all, the service is free.

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with over 4,000 now holding theFoundation Certificate and over1,200 our LegRegs qualification.

CriteriaThe strict criteria for IPA

membership may mean that werepresent only about 10% of all UKagencies, but those agenciesaccount for an estimated 85% of alladvertising spend in the UK.

ResourcesEvery IPA member agency hasdirect access to a wide range ofservices, including: the IPA Legal

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EndorsementIts therefore no coincidence thatthe lions share of creative andmedia agencies on the Governmentroster are IPA members and thatISBA, representing the UKslargest advertisers, recommendsits members use IPA agencies.

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viewpointhugh burkitt


it is a clich in marketing that we must put thecustomer at the heart of the business, but I recentlyfound that my heart was at the centre of someoneelses business. I needed an operation to repair aleaking aortic heart valve. Two organisations havehelped put me back at my desk the NHS and

Aviva Healthcare and I am profoundly grateful tothem both.

The cusTomer needIt all began back in May, when I decided afterseveral weeks of coughing that I should get alongto my doctor for a check-up. The cardiologist

was brisk to the point of being brusque. He hadno bedside manner but he was logical, clearand direct. Having identified the problem herecommended I go and see a surgeon. I asked:What will happen if I dont have an operation?Your heart will fail, he said.

Finding The righT service

So I went to see his recommended surgeon andfortunately immediately liked him. He describedthe problem and his proposed solution with greatclarity. The aorta needed to be brought back intoshape and this should cure the leak in my valve, butif it didnt he could put in an artificial one. I neededto have the operation done in the next four weeks.

The risk of an event rose exponentially withthe extent of the dilation of the aorta and mine wasalready at a dangerous level. Oh, and the mortalityrate for the operation was less than 4%. Themortality rate was mentioned on at least two otheroccasions before the operation and it weighed

heavily on my mind.Is 4% low or not? Well if you say to yourselfthere are 50 people on this rush-hour bus, and twoof us are going to die before the final stop, then itstarts to seem quite high.

The stricken faces of ones nearest and dearestalso tell you a lot. We all need a heart that worksand it has been possible only in my lifetime tooperate on it. Messing with the heart soundsalarming, though more than 300,000 people in theUK have now had heart surgery, and the outcomefor most people is excellent. But going into theoperation, while outwardly calm, I was franklyscared.

Would AvivA pAy For iT?During this period there had been a series oftelephone conversations with Aviva Healthcare,

which had established that my policy did coverthis operation and that my preferred surgeon was

acceptable but his recommended hospital TheHarley Street Clinic was not covered. Aviva

would pay the average cost of five NHS trusthospitals for this operation which was a cool

22,500 but they warned me that The HarleyStreet Clinic could cost twice this amount and Idbe on my own for the extra money.

Each call to Aviva was dealt with efficiently, butevery single call was with a different person, and it

was quite clear that they were in much more of apanic about what my policy covered than the factthat I had a serious health problem.

I never established any one person at Avivawho recognised me, and I never had a writtencommunication from Aviva to me that addressedme by name. The only paperwork I received camefrom a computer in the accounts department notfrom anyone interested in health care.

So I decided to settle for my preferred surgeonoperating at his NHS base in two weeks time,

which was a specialist unit run by UCLH called

The Heart Hospital. As one visitor later said: Thename is reassuring. It sounds as though they know

what they are doing.

delivering The serviceThe surgeon was no doubt happy to have me asa private client, and the fact that I was privatemay have helped move me up the queue, but onthe planned day of admission I still had to call at11.30am to check that there was a bed available,and when I did I was told that I would have to waituntil 1pm to hear for sure after the doctors havedone their rounds. As I got a call back my pulse

rate leaped something it was to do a lot of in thenext few days but I was in.The first three of my six nights in hospital were

all grim. I shared a room on the night before myoperation with a charming man, but his appallingcough kept both of us awake. At 1am, I considereddischarging myself and coming back again inthe morning. The next day, as the hour of myoperation approached, my rising tension causedmy backache (a relic of sporting activity earlier inthe summer) to grow worse and worse. When theanaesthetist came round he offered me painkillersand a sedative. Ill take anything youve got, I saidand as soon as I took them I passed out and didnt

wake up again till I was in the intensive therapyunit after the operation.

Here they were talking to me to wake me up andtaking a breathing tube out of my mouth. I staredat the neon lighting and felt cheered that I was notin the next world after all. My partner, Antonia, and

Operating on thecustomers heart

how does feel o

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wen yo ea

s en opeaed

on? Hugh Burk

desces s

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end of ealcae


23/60Market LeaderQuarter 1, 2012 23

I had attended a pre-operation orientation day twodays earlier which had wisely included a trip to the

intensive therapy unit. There we saw what peoplelooked like when they came straight out of theoperating theatre. In a word, ghastly. They looked aterrible colour with tubes everywhere.

Once I was conscious I became acutely aware ofthe state of my neighbours in the beds on eitherside of me. On my left was a Polish granny who

was said to speak not a word of English, and on myright was a Mr Ahmed who was said to speak onlyUrdu. The blue curtain blocked out vision, butevery sound from the beds next to me was audible,and I found myself being drawn into each patientspersonal drama.

I settled uneasily down for my third night inhospital which I can confidently say was the worstnight of my life. Mr Ahmeds alarm kept goingbeep beep and every time it did my pulse rate leaptand my alarm beeped once in response. After somehours of not sleeping I heard a highly cultivatedEnglish voice from Mr Ahmeds bed repeating overand over again: Hello Im Barney Ward. Who

was this? Clearly a posh new patient had arrivedstraight from the operating theatre. What hadhappened to Mr Ahmed? Had he become one ofthe lost 4%?

But when light finally dawned, Mr Ahmed hadreappeared, and Barney Ward was nowhere to be

seen. Mr Ahmed did speak English, and now hewas protesting that he didnt want to sit up, as twowonderful male nurses Matthew and Alfredo setabout waking up the entire ward and throwing offour post-operative stupor.

Even now, months later, I feel quite emotionalwhen I think of the wonderful care I receivedin that ward from so many different staff, who

were all working over the weekend. Matthewand Alfredo stick in my mind because they hadsuch a wonderful effect on the whole ward on asunny Sunday morning after a very dark Saturdaynight. After what had seemed like a very long

period in captivity in fact only three nights Icould look out through an attic window at thepeaceful roofs of Marylebone and look forward tothe rest of my life.

reFlecTing on my TreATmenTMy message to readers is this: do get your healthchecked regularly. My condition might have beenfatal if I had left it too much longer.

My message to Aviva (as to all healthcareproviders) is simple: as with all goodcommunication you need to put yourself in theplace of the recipient. People facing a heartoperation dont feel great about it, and would like

to be treated sympathetically as individuals. It mustbe possible to be clear and businesslike about themoney involved, while at the same time appearingto be interested in the patients health.

My message to the NHS is more complex:well done on listening to a lot of feedback and

introducing such customer-friendly measures such

as an individual patient manager in my case itwas a nice lady whom you felt might otherwisehave been running a National Trust Teashop whopopped in each day to listen to any concerns overmy stay in hospital. She had no medical role anddidnt have the power to change anything, but she

was there to listen and pass messages on.So she couldnt do anything about the truly

disgusting food. Even the tea tasted terrible. I thinkthat if a tea manufacturer could be persuaded tosponsor the tea bags in a major London hospitalfor a trial period of a year they would be ableto demonstrate a speedier recovery rate among

patients. And surely the alarms in intensive carecould be visual rather than aural, in a way thatwould alarm the staff but not the patients.

Finally, I do wonder why we dont all come outof an NHS hospital knowing what our treatmentcost. On my last day I encountered another patientleaving who was complaining to anyone who

would listen about the poor treatment he hadreceived. This included an emergency ambulanceinto hospital, a new heart valve, a triple bypass anda pacemaker. He was, he told me, aged seventy,overweight, a lifelong smoker and had diabetes. Hisfree treatment must have cost the NHS at least

50,000. He may not have valued the professional

expertise he had received but surely he would havebeen quite impressed by its cost. n

Hugh Burkitt is chief executive ofThe Marketing [email protected]

viewpointhugh burkitt

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at t fat abt t, aw k t b tatatta aa


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Triumph of abetter ideologyMarket innvatin has ln been

minate by the wrl view f

enineers an ecnmists bil

a better msetrap an the wrl

will take ntice. Bt Dgl

Hlan Dgl Cme

are the merits f cltral

innvatin instea

24 Market LeaderQuarter1,2012

Existing markets are characterised bydog-eat-dog fights to outdo competitorson a conventional set of benefits.Incumbents rely on incremental changesin product and tactical marketing tofight over thin margins. This, accordingto Kim and Mauborgne, is a red ocean.In order to develop future-leadingbusinesses, companies must reject theconventions of the category to craftvalue innovations that have no direct

competition blue oceans.These marching orders have inspiredmany managers and entrepreneurs.But what kinds of future opportunitiesshould we be looking for? And how doesone actually go about spotting theseopportunities and designing new conceptsthat will take advantage of the blueoceans? Innovation experts have offeredus two paths.

Tcnlgical innvaTinFor most innovation experts, futureopportunities mean one thing the

commercialisation of new technologies.Technology-driven innovations arethe stars of business. From historicinnovations such as the light bulb, thetelephone, the television, the Model T,and the personal computer to recentstars like the iPod, Amazon.com,BlackBerry, Viagra, and Facebook, thecommercialisation of breakthroughtechnologies has clearly had a huge impacton business and society.

In TheInnovatorsDilemma andsubsequent books, Clayton Christensenargues that new technologies allow

companies to design disruptiveinnovations that transform theircategories. Disruptive innovations areproducts and services that trump thevalue delivered by existing category

THis funCtionaL point ofview certainly has merit. But,because it is the only way thatwe approach innovation, the

better mousetraps approach has hadthe effect of eclipsing a very differentinnovation world view champion abetter ideology and the world will takenotice as well.

This phenomenon is found everywherein consumer markets. For example,farmer-cookbook-author-television

host Hugh Fearnley-Whittingstall,author Michael Pollan, the internationalSlow-Food movement, and the Americangrocery retailer Whole Foods Market,among others, have transformed foodconsumption for the middle and upper-middle class. These cultural innovatorshave championed an alternative approachto agriculture and food as an ideologicalchallenge to the dominant scientific-industrial food ideology.

They have brought to life the value,even necessity, of winding the clockback to some sort of pre-industrial food

culture in such a way that it is irresistiblefor the upper middle class in the UnitedStates, the United Kingdom, and othercountries. Relying upon what we termmyth and cultural codes, these cultural

CuLturaL in n ovation

doug o d doug Mo

innovators have massively transformedfood preferences.

We call this phenomenon culturalinnovation. Cultural innovation hasbeen ignored by management strategists,despite its pivotal role in launchingand reinvigorating any number ofbillion-dollar businesses. The BodyShop, Ben & Jerrys, Marlboro,Method, Whole Foods, Dove, Red Bull,Harley-Davidson, the Mini, Starbucks,

Coca-Cola, Levis, and Snapple, toname a few, have all profited fromcultural innovations. When theseenterprises advanced a more compellingideology leapfrogging the staidcultural orthodoxies of their categories consumers beat a path to their doors.

T ac f TTTapLaunching the next big thing theinnovative idea that resonates powerfullywith consumers and takes off to establisha profitable new business is the holy

grail of managers and entrepreneursalike. Strategy experts have been offeringadvice on how to identify and exploit suchopportunities for decades.

Fifteen years ago, Gary Hamel andCK Prahalad offered a pioneering call toarms. To create the markets of tomorrowthey urged managers to focus on industryforesight and strategic intent. To avoidgetting bogged down in an establishedmarkets internecine tactical battles, theyencouraged managers to stake out newmarket space what they famously termedwhite space in order to create and

dominate emerging opportunities.More than a decade later, W Chan Kim

and Rene Mauborgne introduced a newmetaphor blue ocean to dramatise avery similar idea.


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Market LeaderQuarter1,2012 25

>

offerings because they are cheaper,more useful, more reliable, or moreconvenient.

ix-and-aTc innvaTinIn recent years, a mix-and-matchapproach to innovation has becomeinfluential. According to Kim andMauborgne, in order for companies tooffer customers a significantly bettervalue proposition, they must methodicallybreak the rules of their existing category:subtracting and enhancing conventionalbenefits, as well as importing new onesfrom other categories.

For instance, in BlueOceanStrategyslead example, the authors describe how

Cirque du Soleil created a blue ocean byborrowing from theatre and Broadwaymusicals to reinvent the circus.

These better-mousetraps innovationmodels are based on the world view

These better-mousetrs otomoes re bse o the wor ew o

the eoomst the eeer, butthere s more to the wor o oto

th ew rout es oe

CuLturaL in n ovation

doug o d doug Mo

of the economist and the engineer aworld in which it is only the materialproperties of what we buy that are

important.

cn innvaTindiffnTlyConsumers the ultimate arbiters ofmarket innovation efforts often findofferings to be innovative even thoughthey seem quite pedestrian from aproduct-design standpoint. It turnsout that blockbuster new businesses donot necessarily require radically newfeatures that fundamentally alter the valueproposition.

Consider beer. From a better-

mousetraps perspective, the Americanbeer market has long been a maturecategory a notoriously red oceanthat resists innovation. Many productinnovation efforts have been tried, and

the vast majority have failed despite theirseeming combinatorial creativity.

Brewers have tried to follow blue-ocean

strategy for many years. Combiningconcepts across categories, they havelaunched beer+energy drinks (Sparks,Be), beer+tequila (Tequiza), beer+softdrinks (Zima), and so on. All thesesupposed innovations were failures in themass market.

Now let us look at the beer categoryfrom an ideological viewpoint. Whilethe product the beer itself has seenonly minor changes over the past 30years, the category has been very dynamicin terms of the cultural expressions thatconsumers value. Incumbents have been

pushed aside by new entrants with abetter ideology.

In the popular-price tier, Budweisertook off in the 1980s with branding thatshowcased men working cheerfully and


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26 Market LeaderQuarter1,2012

industriously in artisanal trades, menwhom Budweiser beer saluted with a

baritone-voiced announcer proclaiming:This Buds for you! The results werestartling. The beer brand quickly becamethe go-to choice for working-classAmerican men. By the middle of thedecade, Budweiser was unchallenged asthe most desirable beer in the country.

By the early 1990s, Buds ideology hadlost resonance and the business sank,to be replaced by its stable mate. BudLight took off in the 1990s to becomeby far the dominant American beerbrand, speeding past the brand thathad pioneered light beer as a productinnovation, Miller Lite. Bud Lighttastes little different from Miller Lite.Rather what was different was a decadesworth of silly Peter Pan stories of menwho engage in all sorts of juvenile highjinks, which conjured up a new kind ofrebellious masculinity for adult men.

Consider soft drinks a categorythat would seem to be one of the mostmasochisti

market leader jan 2012

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