How Moto Can Recapture Its Mojo

Analysis: Home of Razr Reports $181 Million Loss and 15% Drop in Sales; Ad Age Calls in Experts

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Hello, relaunch.

Once-Razr-sharp Motorola not only reported a $181 million loss in the first quarter, but a 15% drop in cellphone sales, which CEO Ed Zander told analysts is "unacceptable." It's up to Mr. Zander and new Chief Marketing Officer Casey Keller, an H.J. Heinz veteran, to turn that around, and a push is expected in spring.

Ten dropped calls made by Motorola, according to telecom and marketing experts
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So what's ailing Motorola? Ad Age asked telecom and marketing experts where the company was running into static and how to fix the brand.

MR. ZANDER HIMSELF, ON A CONFERENCE CALL WITH ANALYSTS
The static: Too many products in the same price points doing the same things.
The fix: "Streamlining. ... We have great midrange products. The problem, as we said earlier, is they are being squeezed by the high end, which is 3G and multimedia, and, of course, the low end. ... Rokr is our first really, really good music product. ... We have this video product that we introduced in Europe with this kick slider. We need that. That is where you get the incremental profits and margins. We need more rich-experience products. We need more 3G products. And at the low end, when we introduce products like Motofone or the W-series, we've got to make money on them."

ROGER ENTNER, SENIOR VP-COMMUNICATION SECTOR, IAG
The static: "Motorola pulled out of a price war in midstream. In developing markets, it was undercut on price and out-marketed left and right by Nokia, which has the better reputation for reliability. It also has an aging product line."
The fix: "Motorola needs its next home run. I don't think the marketing and advertising is what is driving Motorola down. I don't think a new campaign will lift the brand more than just temporarily. I don't think Motorola as a brand has suffered. In the eye of the consumer, it's still the brand of choice."

CHARLES GOLVIN, PRINCIPAL ANALYST, FORRESTER RESEARCH
The static: "They don't have the right mix of phones for the market at this particular moment. They made poor choices in pricing decisions to gain market share. The Moto brand is strong and goes across many product categories. They got a little too enamored of the branding shorthand used in the Razr, Slvr, Rokr. It created confusion in the marketplace."
The fix: "They need to fix it by creating the right products. The branding is not hard to fix. They should have used the Razr as their primary brand and could have done other treatments instead of introducing a new branding name every time."

RUSS MEYER, CHIEF STRATEGY OFFICER, NORTH AMERICA, LANDOR ASSOCIATES
The static: "The challenge for Motorola is that it is now in the fashion business. They live and die by the next great product. It starts to feel like the Gap. But whereas Zara can take a fashion from the runway to the store in four weeks, phones [take much longer]. That's a real problem. I'm also not sure 'Hello Moto' got back to Motorola [in the mind of consumers]."
The fix: "Once they get one of those big, hot, new products, they have to make sure Motorola is connected to it."

A PROMINENT AD EXEC WHO WORKS ON THE MOTOROLA BRAND
The static: "Their new marketing director is from a package-goods company. Carl Icahn is sitting on Ed Zander's head."
The fix: "They need to reposition the company and take it beyond this Moto thing. [They need to] understand branding."

BEN BAJARIN, CONSUMER-TECHNOLOGY ANALYST, CREATIVE STRATEGIES
The static: "The Razr broke new ground. Now, everything looks the same."
The fix: "It's time for another industrial-design blockbuster. They need to step it up."

ANOTHER ADVERTISING EXECUTIVE WHO WORKS ON THE MOTOROLA BRAND
The static: "The Motorola brand is strong and goes across many product categories. ... But there's no Geoffrey Frost [the former Motorola CMO who died in 2005]. He made it happen. He made decisions."
The fix: "I just don't know."
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