The changing idea of marketing as a concept!

If you are one of the marketers who embraces convention, no one will point a finger at you if you were to follow the norm that has been practiced for years. Build/produce/manufacture, brand, market, sell. Justified linear thinking.With strong empirical evidence( I mean brand and business success) to boot.

With so many years of conventional wisdom( that also is the wisdom of the crowds that drive collective bias) in the ring, it would have been a really uphill task for any brand to alter(let alone disrupt) the narrative. But there is something about audacity and moonshots that make them perfect partners in rhyme.

I devote this blog post predominantly to understand marketing from a new lens- the one that brand Tesla is scripting so brilliantly. Directed by Elon Musk(Iron Man). Allow me to go back a few years.

It’s the 4th of April, 2016. The Tesla Model 3 is being launched in the US. It sports a price tag of US$ 35,000 and bookings can be made with a U$1,000 down payment.  Then history unfolds. A whopping 276,000 cars were booked(read pre-sold) on the day, probably a first ever in automotive marketing . And Tesla gathered US$ 276 Million in upfront cash. And here’s where the story gets interesting. There was not even a model car ready. All the sales happened courtesy a few photographs of the Model 3. That’s it. There’s more. There was not even a single car that had gone into production. The first promised schedule for delivery of the Model 3 was late 2017, that was a good 18+ months away. Tesla had disrupted automotive marketing on it’s head and how.

Let’s try to understand more of the phenomena that is brand Tesla.

  • Tesla’s $0 marketing budget is incredibly awesome marketing
  • Tesla Motors has no advertising, no ad agency, no CMO, no dealer network. And that’s no problem. – AdvertisingAge
  • If you drop by the Tesla forums, you’ll see a community of passionate fans discussing how to market Tesla better. There are over 55,000 people subscribed to the /r/teslamotors subreddit. The brand has clearly struck a chord with its fans.
  • Tesla fans are crazy advocates. They attach deep emotional significance to the car. They’re not just paying for a mode of transportation, they’re paying for a slice of the future.
  • Prior to the Model 3 launch, Tesla had introduced the P100D Ludicrous– a luxury model priced over US$ 80,000(base level) with upgraded versions well over US$ 100,000. The marketing masterstroke was in the message conveyed. ” While the PD100 Ludicrous is an expensive vehicle, we want to emphasise that every sale helps pay for the smaller and more affordable Model 3 which is under development. Without customers willing to buy the expensive Model S and X, we would be unable to fund the smaller, more affordable Model 3 “. This is brand positioning at it’s masterful best, making a luxury purchase almost into a charitable act.
  • Every element of the Model S – from the recharging technology to the drag coefficient of the car – is presented as the pinnacle of research and engineering.
  • By eschewing marketing completely, Elon Musk is actually communicating that Tesla is focused on ground breaking technology.
  • Tesla the brand transcended from being just another automotive player in the business to encompass economics, politics, world power to have global energy NOT driven by oil. In the process, creating the marketplace, the eco system where they are the game. As also the game changer.

“ BMW has a marketing department called engineering.” – Seth Godin

These things obviously don’t bother Musk too much. If one were to give him an advertising budget, he is sure to divert that into production. And the final result: an even more incredible car. And inspite of NO Advertising, he gets the world talking about his brand, especially the people who matter.

How does Tesla manage to do all of this free of cost which other brands would spend millions to buy?

First, build something that matters to people. Then, tell a story that resonates with people. Just like iPhones/iPod and Steve Jobs, electric cars are a great story. The greatest stories are aspirational, representing the triumph of passion, conviction, persistence and diligence.

” I know a lot of very wealthy people.  Most of them made their money in technology.  I don’t think Bentley or Rolls-Royce is anywhere near the top of very many of these people’s idea of an impressive car.  A Tesla is more like it “. – Jimmy Wales, on Quora

This sort of advertising is earned, not bought.

You earn this sort of attention by making something truly newsworthy. Or saying something newsworthy.

” The public tends to be, as they should, interested in things that are precedent and superlatives.” – Elon Musk

Musk is all over YouTube. The media is chasing him nine to the dozen. Why? Because he is always working on cool, fascinating, path breaking projects.

Musk is a CEO who understands the power of showmanship(tonnes of interviews, cameo roles in films and media appearances.

Just GoogleElon Musk  says ‘and you will get the most quotable of quotes that media loves to lap up and carry forward.

The Hyperloop is something that Musk is NOT planning to make but delivers great PR for him as a tech visionary.

At most times,Tesla has more orders than they can build – that in itself is great marketing.

Tesla has demonstrated that brands and organisations can move on from a Build/produce/manufacture, brand, market, sell model to that of a brand, market, sell, build one. Welcome to the next normal.

As William Gibson would say, “The future is already here – it’s just not very evenly distributed.”-  which will be nothing like what we have experienced before, we’re all going to be completely re-evaluating so many aspects of our lives: education, medicine, work, social responsibility, inner calling, the list goes on. And under the aegis of the Covid 19, all of this is happening remotely right now. And the question for a lot of companies and brands is going to be: Now that this shift has happened, am I still relevant? Does what I do still make sense? Am I serving an essential function, especially in a time when everyone is being careful about their finances?

Answering in the affirmative will separate the men from the boys. Wanted. More Musketeers!

ENDS

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Look OUT: Avoiding the ‘legacy trap’ in inspiration

The 19th century French physiologist Claude Bernard said that “It is what we think we know already that often prevents us from learning” . So true, isn’t it. Being comfortable in our existing biases and prejudices.

It’s the swanky decked to the hilt conference room of a major healthcare brand. Huddled are some really bright minds including the hospital  CEO, medical experts, Architects, Project Consultants etc. The matter on the table is the design of the ICCU(Intensive Cardiac Care Unit) at their upcoming new hospital. Inevitably, the design blueprint presented did not depart too much from what has already been executed in multiple ICCUs across thousands of hospitals worldwide. Been there, done that. Enter the intrepid Customer Experience Manager, newly appointed at the hospital and what she suggested immediately managed to raise many eyebrows. ” How about borrowing some design thinking from the Formula 1 Pit stop ‘ as we look at building the new ICCU ? she suggested. One could hear a pin drop. In that room, was more than 200 years of insights and experience and all that was being the cold shoulder. The young lady went onto elaborate what her thoughts were. The Formula 1 Pit Stop is where critical decisions involving millions are taken in micro milli seconds that will affect many stakeholders, almost a life and death scenario. All she was suggesting was to borrow thinking from a completely heterogeneous industry that had nothing to do with healthcare. And to her credit, she won the day. The legacy thinking was punctured to arrive at a smarter solution that was equally if not more relevant to the cause at hand.

Similarly an airline check in counter can actually gain inspiration from observing a hotel front desk check in process. Or a bike supplies store seeking inspiration from beauty retail brand like Sephora to get more customers comfortable with buying and using bikes.

We define such thinking as ‘ analogous inspiration ‘ wherein you remain and in fact seek thinking and ideas from an industry completely unrelated to your own. Only to realise the unlocked value hidden therein.

Till about some years back, we connected ‘ subscriptions ‘ as something that the media industry especially newspapers and magazines used to ensure they have a loyal customer base. In the current context, we have vast tranche of products and services including cars(yes Volvo already implemented it in Sweden), Fashion, Airline tickets, OTT(Netflix, HBO, Amazon), Fintech, Furniture etc using that route to grow and more importantly retain customers.

It’s not that such ‘ break the mold ‘ thinking be restricted to organisations and brands alone. Shalane Flanagan is an American long-distance runner. She holds the American record times in the 3000 meters (indoor), 5000 m (indoor) and 15K road race. She won the bronze medal at the 2008 Olympics in the 10,000 m (since upgraded to silver). She also won the 2017 New York City Marathon. What is interesting to understand in her case is that by design she would train with her rivals– yes you read it right- her rivals. To her it was an opportunity to go beyond her own arc of biases and understanding and soaking in new approaches that otherwise she would not have been privy to.

The whole thought is to replace the context you are in and seek newer, untapped contexts as sources of inspiration. This is something that we try to practice regularly within ISD Global where I work. There are better stories outside the book you are reading. So, go ahead, turn the page!

ENDS

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DREAMKETING

DREAMKETING
We are under prepared. The rant is, that we are still mired in Old Economy, Old Product Thinking. But, we must, in fact all of us, take a cue from the likes of the Virgin Group or Tesla and the likes- and come to grips, strategically, with the fact that Winners in the New Age Economy will be …Masters of the Dream Business.
What would that entail; Totally ‘ insane ‘ schools, hospitals, enterprises, retail..going way way beyond the normal suite of services to be in the realm of impossible made possible dreams.
The stakes are high. In fact billions and billions of dollars. So, lets stretch the narrative here.
Digging back on a presentation that Ferrari North America CEO Gian Luigi Longinotti-Buitoni some years ago in Mexico City. Dreams are his mojo. To quote him from the presentation ” A dream is a complete moment in the life of a client. Important experiences that tempt the client to commit substantial resources. The essence of the desires of the customer. The opportunity to help clients become what they want to be. “
Longinotti-Buitoni preaches the  ” marketing of dreams ” – an idea that he compressed into a word of his own coinage: Dreamketing

To guarantee anything in a world gone nuts is well..nuts. So, suggest we take the leap.

Dear Mr CMO, Dear Finance Head, Dear Ms Retail Store Owner. Get an extended lease on your professional life. I will tell you how. Expunge, excise, remove​​ the terms ‘ product ‘ and ‘ service ‘ from your vocabulary. When either of these two words come to your lips, substitute them with ‘ experience ‘ or ‘ dream ‘. That’s all.

This is not a pie in the sky spiel.​ This is a strong business message being sent out by someone, a very practical businessman who has created and enhanced some extraordinary franchises. So, its worth listening to his argument if you are in sync with the fundamental argument that the call of the hour is Totally New Sources of Value Added..in a Totally New Economy.

To ratify, lets put out a grid of ‘ Common Product V/s Dream Product ‘

Common Product     V/s          Dream Product

​Maxwell House                            Starbucks​

Hyundai                                         Ferrari

Suzuki                                            Harley Davidson

Carter                                             Kennedy

​Connors                                        Pele

New Jersey                                  California​

CNN                                               Game of Thrones

​Nothing wrong with the brands on the left of the grid. Each offers regular, solid, every day​ response to some need or another. On the right though are brands with a dreamlike power that go beyond the realm of mere ‘ need fulfillment ‘.

So, dramatically alter perspective. Do not rest until that project passes the test of imagination(or Dreamketing). Raise the bar. WAY, WAY UP! To become what you or your client wants.

ENDS

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Your brand’s worth is in your own hands!

Your brand’s worth is in your own hands!
You do not have to look far ahead into the horizon to read that businesses are facing an uncertain economic landscape across multiple markets around the globe. We are amidst a landscape in which brand worth has never faced fiercer scrutiny.
 
Moreover, in this environment, a power shift has taken place as price-conscious shoppers have seized control. Price loyalty or brand loyalty?
 
The done to death strategy(dare we call it that?) that brands have been resorting to, to drive volumes has been, no prizes for guessing, discounting. Not only is it a short term strategy but it also does both the brand and the business serious damage in the longer term. Turning the model upside down, research has shown that a 1% price increase can drive a 12-15% increase in profit. That is three times the profit increase seen by boosting sales the same amount. Which shows that the commercial impact of protecting prices can outweigh cutting them to drive volume.
 
Just like most buying decisions are not rational, so is consumers perception of price, which too leans towards the irrational. Behavioural economics studies show that when you flip the context, re bundle your output and shift the focus from price to value through added layers of experience, consumers are willing to pay disproportionately more for it. This, in some way, also endorses the oft used observation that price is the yardstick of quality.
 
By combining data-led pricing strategies with the creativity and behavioural science of a modern agency(be it ISD Global or any other), brands can dramatically outperform the competition in a commoditised market. 
 
Brands can increase their price perception in the eyes of the customer through a 3C Model of Create(through rituals, theatre, value added services)-Connect(establish a culture where customers are happy to pay more like Frappuccino from Starbucks)-Convert( Optimum sales balancing value and volumes, omni channel, something like what hotel chain IHG does).
 
For the community of marketers everywhere, it is time to seize back control of the most ignored, most impactful lever in the marketing mixPricing.
 
 
ENDS
 
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Is brand Apple no longer the apple of everyone’s I ?

‘I’ don’t know-hence I have some some questions about the most valuable brand in the world..

a) Is the Apple era over? Have they moved on from ‘ ground breaking and game changing ‘ to ‘ incremental fixes ‘ ? Sounds audacious but it does beg the question.

b) Have they missed the bus virtually in the Smart Speaker space in reference to Amazon & Google? With their Alexa and Assistant respectively. Though they were the true blue innovator with Siri ages ago and had a great shot at dominating the ‘ living room & kitchens ‘, they seem to be caught in no man’s land as of now. Should they have considered this space more Siriously? (Pardon the pun). As one of the most valuable brands in the world, don’t they want their ‘ share of voice ‘?

c) Should they be getting into Content Creation? They have the cash to do it but do they have the culture and the will still? Should they look at acquiring someone like an HBO or other smart acquisitions to hit the ground running? Where does Apple TV fit into all of this?

d) Have they moved on from a culture of Innovation and R&D being their biggest asset a decade ago to a huge pile of cash being their biggest asset today?

In a world of FAANG, is it still A for Apple? A for Answer is what I am looking for! What will the Doctor order to not keep the Apple away?

Ends

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