Nortel CMO begins global brand audit

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Lauren Flaherty, who took over as Nortel Networks' CMO May 1, is undertaking a global brand audit this month to understand exactly how Nortel is perceived by its constituents and what the company needs to do to reshape its brand.

Flaherty, a 26-year IBM Corp. veteran, succeeded Clent Richardson, who left the company in March.

She steps into a challenging position. Over the past six years, the telecommunications equipment-maker has struggled through the dot-com crash, an industry downturn and an accounting scandal that resulted in a $2.5 billion settlement with shareholders earlier this year.

During this time, it has had to compete with rival Cisco Systems, which had an advertising budget of $64.3 million in 2005, compared with Nortel's $8.1 million, according to TNS. Flaherty said her immediate priority is to get a reading on how Nortel is doing with its core audiences.

"The key thing I need to zoom in on is where is Nortel in the eyes of our customers, our employees and our shareholders," Flaherty said in an interview with BtoB her first day on the job. "When we tackle what we need to do to position Nortel for future growth, we will go about it in a systematic and targeted manner," she said.

Assessing capabilities

The first step in this process is a global brand audit, Flaherty said. She spent last week huddled with marketing executives across the organization to assess the company's marketing communications capabilities, as well as the capabilities of its various agencies. The Richards Group, Dallas, is Nortel's ad agency; its PR agency of record is Lois Paul & Partners, Woburn, Mass. It also uses Pleon, part of Brodeur/ Pleon Worldwide, in Europe, the Middle East and Africa; Porter Novelli in Latin America; and various agencies in Asia.

"The first priority is to understand, by target audience, what is the communications challenge with each constituency," Flaherty said.

Marketing challenges

Robert Whiteley, senior analyst at Forrester Research, said Nortel faces different marketing challenges with its two core audiences, enterprise customers and telecom service providers.

"Most people perceive Nortel as being a really good engineering company," Whiteley said. "On the enterprise side, a lot of folks are looking to move beyond a really well-engineered product and are trying to get a product that offers a lot of features and functionality, and is oriented at solving specific problems. It requires the vendor to know the customer really well."

He said Nortel has done a good job developing products to solve specific problems, such as security and mobility, but needs to do a better job communicating its vertical solutions to customers.

"In the carrier space the perception is better than in the enterprise space," he said, adding, "a lot of the carriers and service providers are interested in some of the sexier, new applications, such as IMS [IP multimedia subsystem]. Nortel was a little late in marketing that relative to Lucent or Cisco."

Determining audit partners

After assessing the company's capabilities, Flaherty will determine which partners to use in conducting the global brand audit, which could include ad agency partners, market research partners and internal resources.

"It will be a fairly classic brand audit by segment to get a read on the perceived strengths and liabilities of the company in key markets worldwide," she said. Flaherty will use results of the audit to develop a roadmap for Nortel's marketing strategy.

"We will create a very systematic blueprint for who we communicate with, how we communicate and the whole marketing mix. It is the way we execute that will help us strengthen and fortify the Nortel brand and help drive growth from a revenue standpoint," she said.

Flaherty said it was too early to comment on specific marketing strategies, including new advertising campaigns.

After being absent from television advertising for four years following the dot-com crash, Nortel launched a repositioning campaign in 2004, with the tagline "This is the way. This is Nortel," created by the Richards Group.

The campaign was designed to reintroduce Nortel to C-level executives and, since then, Nortel has extended the campaign through new executions. This year it launched a TV and print campaign with the tagline "Business made simple," also created by the Richards Group.

"We need to make sure we have a value proposition that really articulates our capabilities well," Flaherty said. To do this, she will work with Nortel's product groups, marketing teams, geographic teams and agency partners to develop a marketing communications platform designed around core benefits that differentiate Nortel from its competitors, she said.

She brings years of marketing experience to the job. Flaherty was most recently VP-worldwide marketing, small and medium business at IBM. She also played a key marketing role at IBM in the early '90s, when it reinvented itself as services driven, rather than a hardware company. During this time, Flaherty led worldwide advertising and spearheaded development of IBM's "Solutions for a Small Planet" brand campaign.

Flaherty said another priority is developing a measurement culture at Nortel. "The increased level of accountability is a huge issue for marketers, particularly in the last five years," she said.

"There has been an enormous push across Fortune 500 companies to make sure there is a marketing operations capability or function in place to rationalize the marketing investment. You have to have the metrics to show you're on the right track."

She said Nortel does have a marketing operations function in place, and looking at that will be part of the capabilities study she will conduct over the next month.

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