Tuesday, December 30, 2008

The Road to Perdition.

What’s lost if a brand dies?

I’ve been asking myself this question as I watch the North American auto industry mismanage itself this time not just into dire straits, but perhaps into oblivion. From the moment those dimbulbs stepped off their private jets with their hands out last month, I have had a terrible feeling this wasn’t going to end well.

So hot is this issue, and so high-stakes, that I feel like I need to stipulate a couple of things before I launch this polemic: First, as a former card-carrying member of the UAW in my student days, and later as a marketing partner to two big Japanese auto makers, let me assure you that I understand this situation is not simple. And there is plenty of blame to go around, from head offices to the shop floors to the showrooms to the consumer’s driveways. Second, I am not unaware that the consequences of this industry failing are inestimable. In this sense, the car companies really do have a lot in common with the financial institutions that got us into this mess: they brought it on themselves and the rest of us, but we probably can’t afford to punish them.

But this is a blog about brands, and of all the casualties that might pile up in the months ahead, I’m not sure anybody else is going to shout this one out. So let me add a couple of things to the list of what’s at risk, here.

Consider the Ford Motor Company. At its birth, this enterprise was practically the Apple Computer of its time. Henry Ford saw a business in the idea of mobility as a universal entitlement. “I will build a car for the great multitude,” he proclaimed. His vision of a car in every driveway was linked to a technological breakthrough for making it possible (that would be the assembly line) and a simplified product offering (one model, one colour), and to the notion that the workers themselves should be able to share in both the fact and the fruit of that vision. Brilliant. Inspiring. Gone. Today, Ford has some nice products, I guess, but no real sense of why it should exist. Or for whom.

Or General Motors. Under Alfred Sloan, the concept of positioning was essentially invented there, decades before Trout and Ries coined the term. He built GM as a portfolio of brands that were not meant to compete with each other at all. Instead, they broadened GM’s market coverage, while giving the consumer a lingua franca with which to express himself through his choice of cars. And a social ladder to climb while doing it. Like it or not, it was brilliant. Inspiring. And now, though the husk of the company remains, gone. Today, GM is a big, fat, inefficient pile of marketing redundancies, built by cynical badge engineering and dealer pandering.

These, it seems to me, were two very good ideas: The democratization of personal transportation, a portfolio of microbrands aimed at affinities rather than functional needs. Maybe even better ideas now than they were then. The problem, it seems to me, is that the people who now run the companies that had those ideas aren’t believers. They’re just managers.

(As for Chrysler? Well, Chrysler never really had a vision, did it. No sense of purpose. It’s been in the fashion business since the 1920s, a market opportunist chasing the zeitgeist with engineering and design, but no mission. A car company shouldn’t be more famous for a building than it is for its products. And so it’s somehow not surprising that this isn’t Chrysler’s first time at the public trough. Or second. Or third.)

It’s hard not to notice that the same short-sighted marketing that destroyed these brands, destroyed these businesses. Coincidence? Maybe. But I’ll tell you this much: If a company stops believing in its brand, it cannot expect its customers to continue to do so for long.

And that’s what’s really going to be lost, here. After we’ve absorbed the initial economic consequences of whatever happens to these guys, we’re going to ask ourselves why we needed them at all. Sure, we all know why we need the factories and the dealerships and the jobs and the credit facilities. But do we know why we needed the cars? The answers to that question were encoded in the brands those cars wore. If the brands meant nothing, then neither did the cars (you can get cars anywhere, if that’s all you want). And if the cars meant nothing, then neither did the industry that built them.

Legitimate profit, my jet-setting Detroit friends, is the consumer’s way of telling you how much he cares.

A lesson we all might want to pay close attention to on the road ahead.

PS You've got to read the consumer comments about a bailout 'thank you' ad from Chrysler, featured in their corporate blog. In case you've ever wondered just how far a corporation can have it's head up its, um, self-interest.


Emma said...

I feel the same way - why are we paying billions to bail out an industry that's not exactly essential here. Banks sure, but cars? cars ARE everywhere. And until you described them, I did not know the difference between the GM brand, or the Ford brand. Sad stuff.

BrandCowboy said...

Indeed. And as a sidebar to that, further evidence of what terrible custodians of history marketers are. Day to day, having a past to live up to seems to be just an inconvenience to a lot of them. Who then go on to prove that old saying about being doomed to repeat it...

Carla said...

I have a semi-relevant story to share about the car industry.
I had the opportunity to visit the BMW studio in Munich last fall.
The most impressive part of the studio is the advanced lab, which consist conceptual experimentations of future automotive engineering and design. In this department, the engineers and designers work together to come up with concepts of what BMW could be in the future. They would never see their design ever realized in their lifetime (what an ego-crusher), but it creates ambition for the studio to create the most advanced cars that marry best engineering and design. Every concept I've seen is out there (some are fantastical, unconceivable and useless) but the exercise serves themselves being brand stewards. There's one design of a motorcycle that folds and parks in a cocoon, floating in air with adjustable height to reserve space in this shrinking and overly-populated world. It's cuckoo, but it makes you imagine.
My point is, a company like that, keeps everyone inspired to think and find new solutions for what's next, through engineering and design. Pro-Chris Bangle or not, BMW is a company that believes in being a leader brand that produces the ultimate driving machine (though the marketing might preach differently). They continue the pursuit to be ahead of everyone else and they are proud of it.

BrandCowboy said...

BMW is a really interesting case. They were the most independent car company in the world for most of their history, and that made them free to stick to their vision. Amazingly, it got them to 1.5 million units a year (still 10% of Toyota, but a serious number compared to other prestige brands).

Which brings up Bangle. To me, the issue with him was that he was/is about style, whereas the BMW aesthetic was at least nominally in the service of its vision of what a car should be. It's been fascinating to watch them work it out, and my own vote would be that things are better now. The cars are still fresh and brave, but much more true to the quiet self confidence the brand has always had.

I think your assessment is dead right. Thanks for sharing the story!

miro said...

Hi Bruce
best of the New Year to you and the readership.

You've stated the problem very well. I am a little confused at to why you blame consumers?
"...And there is plenty of blame to go around, from head offices to the shop floors to the showrooms to the consumer’s driveways "

The key question is who owns the brand and the customer relationship. If that had been identified and a modicum of leadership prevailed (Wagoner had oodles of time at the helm) - this would have been a different story.

For all the category and early brand innovation the Detroit 3 brought to the table, it was their cumbersome matrix structure aligned to meet (internal) stakeholder and not consumer needs that was their ultimate downfall.

D3 simply did only what they had to in order to satisfy shareholders for the quarter - while the rest sought to satisfy customers as part of a journey of continuous improvement. And unfortunately their cost of failure is too high at at this juncture - otherwise ...

The bigger question is what happens going forward.
Can they re-invent themselves...not just the product but the service and the dealership network as well? Will consumers buy into the new promise? Is it even possible for the D3 (or D2/D1) to deliver what is needed when their bar has been raised higher than the rest of the sector as a result of the bailout?

Like the fortune cookie says
"May you live in interesting times"

Emma said...

Sorry, back to BMW quickly: not only are their aesthetics amazing, but their technology is too. My bike is from there and I'm always amazed at how brilliantly it works. Plus the longevity of their products, the cars seem to have no problem lasting decade after decade....hmm...perhaps I should just become a spokesman for BMW...

Either way, the great product/brand relationship has lead to great success for them. One of the few luxury class brands with a young image. trés refreshing.