Letters, April 13, 2009

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Ries is right on recession thinking

RE: Al Ries' "Don't Damage Your Brand for Short-Term Gains in a Recession" (AA, April 6). As the company slides toward oblivion, GM risks destroying its premier brand, as it has its others.

It's a shame, because the overall Cadillac product line has improved in recent years (its rebadged and leather-smothered trucks not withstanding). The only way a four-cylinder Caddy would work is as a deliberate green machine, made of recycled but sumptuous materials, with ultra-low emissions but good acceleration due to light weight. Then you'd have to charge no less than $45,000, defeating the perceived purpose of a cheaper Caddy.

The Packard analogy is dead on. Packard was the first luxury carmaker to blink and offer an "entry-level" model. Fast-forward to today: Jaguar released the X series, based on the plebian, front-wheel-drive Mondeo. Given Jag's already shaky rep, the X sent the brand tumbling straight into the arms of Tata Motors.

Jason Karpf
Thousand Oaks, Calif.


While you are 100% right, I'm just not sure that the free-market mentality of the average American shareholder allows him to care whether his demands for short-term gains kills the brands of the firms he "invest" in.

In a recent CNN panel discussion, the guy who advocated buying gold to protect your savings from vanishing in the crapshoot that stock and real-estate investments have always been immediately got shot down by an analyst who pointed out that anyone who bought gold in the past 40 years hasn't made decent profits. The only reaction to this astoundingly stupid retort was mild nodding from the panel.

You see, owning gold would have made every person in the world immune to this downturn, as they would not have lost any equity. Yet most people nod along with to the notion that we must always be looking for profit at all costs -- after all, that's the tenet at the root of capitalism.

With this mind-set, shareholders are going to push for the firing of any C-suite employee who does not deliver short-term profits, so luxury brands are doomed -- unless they employ very clever, strategically creative thinkers to develop solid marketing tactics to avoid undermining their brands.

As IQ is a relatively rare commodity and the only reliable indicator of executive performance, most firms will very likely need to look outside their organizations for the type of thinker they'll need to avoid making grave short-term mistakes.

Just listen to Starbucks' CEO a few weeks ago: "We've become the poster child for excess. ... We are going to dispel this myth about a $4 cup of coffee," Howard Schultz said in his presentation to shareholders. Out the other side of this "economic re-boot" we're going through, he's going to rue the day he decided to steer his brand away from an enviable, hard-won luxury positioning. But his shareholders want double-digit growth, globalization and marketing to the masses, not retention of brand equity, sadly. Most marketing folks are just going to hunker down and follow the prevailing wind, not innovate or strategize for the long term.

We need CEOs who get that sometimes you need to listen to really insightful, smart people, even if this thinking has to be outsourced in, horror of horrors, a period when shareholders are demanding they "do more with less."

Kevin Lenard
Toronto


Fear won't lead to brand recall

I wanted to comment on the New York City Department of Health's use of that anti-smoking "lost-boy" ad, which utilizes fear appeal ("Donny Deutsch: It's OK to Make a Kid Cry if It Stops People from Smoking," AdAge.com, April 2).

As CEO of a full-service, ad/web agency in Toronto, I was outraged a few years back by the blatant use of fear appeal in a safety commercial running in Canada. Several vignettes in this flight left the general public, well, terrified -- so much so that the brand-name recall was lost.

I set out to determine if fear appeal in advertising actually works. I undertook my master's studies and researched and wrote my thesis on "the role of emotion in communications aimed at modifying risk-taking behavior." Smoking fits the definition of risk-taking.

The answer is: If fear appeal alone is utilized, the ads will not work. They will just end up leaving our target audience frightened. No recall of the ad -- just a feeling of fear and extreme discomfort.

Gavan Howe
President-CEO
Ebranders.com
Toronto

CORRECTIONS

RE: "Five Brands Doing It Right, Doing It Wrong" (AA, April 6). LVMH is in a joint retail venture with De Beers Group.

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