29 April 2005

The importance of research and branding

Lightspeed Research carried out the global business traveller survey for American Express recently. Lightspeed surveyed 1,040 business travelers from ten countries on behalf of the Business Travel unit of the financial services company during March 2005.

Business travelers were surveyed in each of the following countries: Australia, Canada, China, France, Germany, Japan, Mexico, Norway, the United Kingdom and the United States. Each respondent was required to have taken at least two business trips in the past 12 months with one trip including an air component and overnight stay.

The results are interesting. 65 percent of business travelers around the world identified baggage loss insurance as the most valuable type of business travel insurance, followed by trip delay (61%) and trip cancellation/interruption insurances (61%), emergency medical evacuation/repatriation (57%), baggage delay (55%), air flight coverage for accidental death/injuries (52%) and emergency medical and dental expenses (48%).

Security was a major concern, with 74 percent of global business travelers surveyed finding it important that their company know where they are at all times in case of emergency.

Furthermore, with growth in international travel comes an increase in the need for visa/passport support and traveler insurance. Forty-five percent of travelers said that they felt that online visa and passport support is very valuable. Both Chinese (65%) and French (63%) travelers rated visa/passport support as a priority.

The survey also revealed that 86 percent of business travelers around the world expect to increase or maintain their number of business trips over the next year, led by nearly 69 percent of Chinese business travelers who expect to take more business trips next year.

Moreover, 41 percent of Americans, 34 percent of Japanese and 33 percent of Australian business travelers are expecting increases in travel.

Although I've not seen the full report, there appears to be no mention of the sensuality of curves, the arch of a back, the way fingers curl in a caress, the sway or swish of a dress or ripples in soft cotton sheets, fluffy pillows and creative advertising as being important to business travellers.

I understand that Leo Burnett has 'declined' the chance to participate in a pitch for Malaysia Airlines business in Australia. Rumours abound that Leo Burnett may soon lose the whole Malaysia Airlines account. I wonder why?

28 April 2005

Is this the end of another brand?

Who is to blame for Rovers current predicament is difficult to determine at this point in time. Certainly it is too early to blame the Phoenix Corporation or BMW, both of whom made good and bad decisions.

What is a surprise is the reluctance of Shanghai Automotive Industry Corp's (SAIC) not to acquire MG Rover. It was assumed by many, including this individual that the fast track route to global brand, as practiced by the likes of Haier and Lenovo, would spill over into the automotive industry. What it needed was a western manufacturer in need of a bit of cash. Certainly Rover appeared to fit the bill. And my guess is that a number of loyal Brits would have stuck by one the UK's few remaining brands.

The problem may well be the asking price. A million quid is a lot of money, even to a cash rich Politburo purchasing manager. But what is the alternative? After all, whilst there is a ready market for SAIC cars in China, it is unlikely significant inroads would have been made into western markets with the SAIC badge on the grill. And even if it were an option, it would have taken at least 10 - 20 years to build the brand.

Locally, MG Rover returned to Malaysia less than a year ago. With much fanfare, sole importer, Brooklands Motors launched the marque and claimed to sell more cars in the last 3 months of 2004 than it forecast, despite the lukewarm comments from reviewers. Rod Ramsay, MG Rovers Sales Operations Director, was impressed and said that MG Rover would make sure Malaysia got allocated more cars to meet the demand.

My guess is that recent events will put an end to any resurgence.

19 April 2005

The Value of Data - Part I

There are occassions, after we have completed a brand audit, that the client looks up from the report and says, "but we already knew this." We then go into a lengthy explanation centred around the knowing-doing-gap.
Data is critical. But how you use it is even more critical. Las Vegas Convention and Visitors Authority, knew that the demographic breakdown of its visitors was changing. But it didn't know to what extent. So the LVCVA commissioned a study. The results confirmed what they already knew. Demographic trends pointed to a younger, and more importantly, more wealthy and educated visitor. The traditional image of senior citizens wandering around playing one armed bandits with a tub of coins was misleading. The study showed a 400 basis point increase in the percentage of visitors with an annual income of over US$40,000. More telling, the fastest growing segment was in the 21-39 age group.
The study also showed that the average visitor was spending US$544.93 on gambling, an increase of 11% over the previous year. More interestingly, the amount spent on shopping went up 27.9%. Even the amount spent on shows went up 11.7%, important statistics when planning future developments based on proposals that look to draw more than gamblers.
The study also reported on the ethnic breakdown of visitors. This showed a significant increase in Asian visitors to that of the same level as Hispanic visitors.
Further data included reports on users of the monorail, (up to 8% from 4%), fewer people walking (40% compared to 56% in 2003. Interestingly from a branding point of view, 97% said they decided where they were going to stay BEFORE they left home. Moreover, 39% used the internet to plan their trip, up from 32% in 2003.
The information gleaned from the report, helped shape the designs of the next generation of casino developments that include mixed-use developments with lifestyle branding but no Egyptian or other type themes. LVCVA had a rough idea what to expect from the report. What it gave them was the data required to make decisions to influence the future developments in the city. In other words, LVCVA looked to the customer to see what they were doing and then built their brand around the requirements of their customers.

11 April 2005

Customers build brands not advertising

Two Phuket airlines planes grounded – after major faults were discovered by safety inspectors.

Following a number of safety scares in the last week, the Department for Transport ordered emergency inspections of the carrier’s aircraft and, according to The Times, found that the collision avoidance system on one jumbo jet was broken, while another did not have operational evacuation safety lights.

The newspaper reports that thousands of people are booked to travel with the airline in the near future however Phuket Air will struggle to fly them all with its small fleet of ageing craft.

With the attitude to safety of crews and management still questionable, a Department for Transport spokesperson reportedly confirmed that the carrier had allowed one plane to take off last Friday, even though it was aware that the collision avoidance system was not working.

Marie Prince, UK spokeswoman for the carrier, told one UK newspaper that she has been unable to gather any information from the airline's UK management.

She is quoted as saying: “I have no idea what it going on because they are not returning my calls. I haven’t had any information since 3pm yesterday, yet I have had 85 calls from journalists.”

Just to recap, this chronic example of poor attention to operational branding began last week in the UAE as a Phuket Air 747 was forced to abort a take off after passengers practically mutineed after one saw fuel leaking from a fuel tank onto an engine as the plane took off.

Phuket Air has been providing cheap package flights between Europe and Thailand. Despite the visually appealing advertising campaigns and other communications, we believe that this is the end of the carriers international routes.

05 April 2005

Consumers determine brand success

Sharjah, United Arab Emirates. The 400 passengers on the Phuket Air flight from Bangkok to Gatwick settled back in their seats, relaxed, tanned and contented after a holiday on the tropical beaches of Thailand. Without warning, as the aircraft accelerated along the runway, a man next to a window started yelling that fuel was pouring from the wing and over a rapidly warming engine. Passengers screamed, refused to sit down and demanded that the pilot stop the flight as fuel leaked from the aircraft and onto the runway.

Despite the reportedly lame attempts by the cabin crew, the Captain aborted take off and the aircraft was checked and 'repaired' by ground crew.

Astonishingly, three hours later, when the pilot attempted a second take-off after, passengers again spotted fuel leaking and the plane aborted take off once again.

The aircraft had landed for routine refuelling but many of the 400 passengers said they would not go back on board, even if the fault was fixed.

The airline has since stated that the passengers panicked and were never in danger. I'm not convinced because in my book 747-200 + leaking fuel over engine = danger, but hey, I'm only a brand consultant.

A cursury visit to www.airlinequality.com finds no mention of the disaster but the complaints far out number the complements. The latest news is that Phuket Air will no longer fly to London. Certainly the online booking service does not work for flights to/from UK in May 2005.

Budget airlines like to save money and buying ex-KLM 747-300's is one way to do so. Furthermore, these ancient relics are probably acceptable when it comes to flying residents of Buriram in Northern Thailand to Bangkok, especailly when the alternative is a 26 hour journey in an even older bus with cockroaches nibbling your toe nails but is it suitable for international brand building?

At the heart of any brand must be operational excellence, especially in the customer economy of today where consumers have the power to determine brand success. Phuket Air has learnt some very painful and expensive lessons.

With the likes of Air Asia, Tiger Airways and regional upstarts eager to take on new routes, Phuket Air needs to make some major operational improvements to ensure the survival of its brand.

04 April 2005

Are we witnessing the end of traditional marketing techniques?

The ad agency responsible for launching Malaysia Airlines new first and business class sleeeper beds was seen patting itself on the back recently after recommending the client book at least 36 pages of the two major newspapers in Malaysia. This grand display of profligacy was, according to the article about the 4 young things, called a roadblock and was a new concept that blocks other firms from booking space and allows the ads to 'flow' through the publication. Well done to the young team and their groundbreaking techniques.

Meanwhile, in the US, a recent survey of business travellers found that 71% book their business travel online. In contrast, only 22% stated that their preferred method of booking is by telephone with a 'live' agent, down from 36% in 2003. Although it has been obvious for some time that traditional marketing techniques are no longer suitable for launching products, this information will certainly ensure many companies re-visit their marketing strategies.

This has got to be true of airlines attempting to differentiate themselves with sleeper beds, already in use by competitors, in a crowded market. Especially if that airline is one of the last to improve the service. So rather than attempt to sell the service in the way that products were sold in the post second world war mass economy that no longer exists, if it were my account, I'd recommend using the extensive data they already have on prospects and clients.

I'd be talking to existing customers, asking for their input, encouraging them to try the new service, get their feedback, encourage them to talk to their friends and so on.

01 April 2005

Building brands

Not long ago, leisure time distractions were limited, media choices were few and reaching consumers was relatively easy. It didn't take much for marketers to use the mass media to create brands. Marketers knew that an advertisement in a daily newspaper, a billboard on a well travelled highway or a radio ad during prime time would reach enough of the right consumers. In other words, and because of limited competition, Marketers could cost-effectively reach a significant portion of the population and allow customers to self-select at the point of sale, when they were ready to buy.

Trying to build a brand this way today is exactly the wrong way to build a brand. Competition is immense, consumers lives are highly complex and full of distractions, obligations and multiple options. Furthermore, consumers are more knowledgeable and cynical. Consumers have been let down too often to believe that a camera really can work on Mars or a car can play football.

Successful customer-centric marketing understands this and as a result, successful marketers in the customer economy of today and the demand economy of tomorrow, will focus on building strong, mutually-beneficial relationships between consumers and brands over an extended time period using all touch points. The retention of profitable customers is key to brand building.

Although advertising is still an important component of brand building, if your agency suggests building your brand only with advertising, fire them.