news from the intersection of branding & technology

The good. The bad. The ugly.

In Apple, brand-building on May 12, 2010 at 10:46 pm
Image representing iPhone 3G as depicted in Cr...
Image via CrunchBase

by Bob Liljenwall

Managing brands in these tough, economic times can challenge even the best companies in keeping customers happy and, well, just keeping customers. According to recent surveys, 35% of brand loyal customers are willing to switch to a competing brand for trial – price and incentives being the major motivators.  So if you’re a Brand Manager counting on “all” of your loyal customers, better think again.  It doesn’t take a lot to move the brand needle in the wrong direction if something goes wrong with your brand.

Take for example, the bad – Toyota.  One of the world’s best and strongest brands that treasures its broad, loyal customer base – Toyota has been consistently rated by J.D. Powers as the premier automobile manufacturer. And then, Bam! — the pedal/electronic crisis affected millions of cars in the US, but Toyota buried their head in the sand by denying there was a problem. Day after day, Toyota couldn’t escape the front page and they spent more time denying they had a problem than in fixing the problem.  There are some wonderful lessons here in how not to manage a brand during a crisis.  As a Toyota owner, I never heard a peep from them for four months.  Amazing.

And then there was Tiger.  While he didn’t deny his behavior, he fell off the Planet in seclusion for four months – finally emerging to finish a respectable fourth in The Masters.  He could have left it at that but he just couldn’t help himself and acted like a petulant kid who didn’t get his way.

Again, a lesson in how not to suck up to your brand loyal customers.  But he apologized, missed the cut last week, and is finding humble pie part of his daily diet. We hope so.

On the other hand, there is the good.  Take Apple.  If there is a company on the Planet Earth with a stronger, more respected brand than this Cupertino-based firm, we can’t find it.  Profits were up 90% for the first quarter, and they sold more iPhones in Quarter 1 in 2010 than they did in Quarter 4 in 2009.  That has never happened.  Oh, in case you didn’t notice, their successful launch of the iPad was a smash sell out.  Let me just say this:

When you go into the Apple store, just leave your gold card at the front counter and let them extract every dollar they can from your wallet.  They’re good at that.  You just want to give them all your money.  Every product they create is, well, just so innovative, smartly designed, and oozes with perfection.  And ya think they left that iPhone on the bar on purpose?  I wouldn’t put it past them….didn’t hurt them a bit in terms of their next generation iPhone. I know – I’ve had every one of them and just love them. Apple makes few mistakes these days in managing their brands.

There is another good-guy story, and it has to be Phil Mickelson’s masterful Masters win at Augusta.

Playing against Tiger was not the story we might have hoped it would be – but rather, the way Phil managed his ball around the course, pulling away from the field, and then sinking a birdie on the final hole, and embracing his wife Amy (who came for the final day while recovering from cancer) and their kids after winning his third green jacket. I’m not the Phil fan many are, but I couldn’t help but cry at the incredible, real love story that equaled a great sport story.  TV doesn’t get any better than this.

And finally, the ugly.  Goldman Sachs, the untouchable, was vilified and torn apart on Capitol Hill for their scandalous behavior — not only being indicted for fraud, but handing out more than $5 billion in bonus money and not ashamed about it.  Their brand continues to be strong (they have the gold), but from America’s heartland, they epitomize the worst of Wall Street brands these days.

The good (Apple and Phil), the bad (Tiger and Toyota), and the ugly (Goldman Sachs) are with us every day.  Their brands are not dead, not by a long shot.  One thing about strong brands, if you have built a solid and loyal customer base, they will stick with you through the worst of times.  Johnson & Johnson proved that with the Tylenol episode.  So have many other companies.  I suspect that all of these brands will survive well — they’ve done it before.  Brand equity is everything — and we have learned you have to manage it well every day.  Customers are fickle, especially when they are facing tough economic decisions.  Good brands survive.  Bad brands won’t.

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