About Branding Iron: Branding Lessons from the Meltdown of the U.S. Auto Industry Toyota will soon displace General Motors as the world’s largest automaker. Since 2000, GM’s market cap fell from $66 billion to $15 billion. In 1980 GM sold 45 of every 100 cars that rolled out of showrooms in the U.S. It now sells 26. By any yardstick, that is a crisis. The root cause of this financial cataclysm mystifies many of the players in the industry. But the numbers tell a clear story. The headlines offer a simplistic interpretation. They say that legacy costs, poor cost control, ill-advised investments in other automakers and in undistinguished products—all of which are serious issues—caused the trouble.
That’s wrong. Or, worse, incomplete and myopic—the same kind of myopia that created the problem in the first place. Like many a crisis, this one has been brewing for decades. And the cost-cutting quick fixes proposed by many industry “experts” won’t solve it. Why not? Because it’s not the root cause. What is killing US automakers is their inability to attract growing numbers of customers to its numerous brands, many of which seem almost irrelevant today. In a few words: bad brand management. (“Iron,” if you’re wondering, is what the auto industry calls its products.) What makes a world-class brand? The authors describe great brands as “a promise wrapped in an experience.” The best brands make a strong, clear commitment to stand for something, to do it better than anyone else, and orchestrate the entire ownership experience. This requires a level of courage beyond most executives. With wit and humor, Branding Iron uses lessons from the car business to guide readers in every business on a quest to build a world-beating brand that leaves a real mark, one made the old-fashioned way—burned in with a red hot iron. The authors do the tough analysis and ask tough questions that most Boards of Directors should be asking, and they give even tougher answers.
My Notes from Branding Iron
Consumers admire and gravitate to companies that display a compelling vision—a vision executed in a way that differentiates them in the marketplace. Companies without vision fade into the clutter of the marketplace.
By establishing who you are and defining what you stand for and whom you serve, you implicitly—or explicitly—say who you aren’t, what you don’t stand for, and whom you won’t serve.
Corporate Me-Tooism. Monkey see, monkey do. Copycatting will get you exactly what you’ve earned: a cloak of invisibility.
What drives the rush to mediocrity? Is it that everyone want to desperately be loved by everyone? To be popular? Exactly.
Defining one’s market area is difficult because it is the first step in paring down your potential market. You must decide your place in the market, select your target customer, and be willing to forego all the others. Give yourself permission to exclude whole segments of the market and concentrate on where you want to be strong.
How will you deliver on your brand promise? How will your customers experience your difference? Through your product? Through your culture? Through your retail channel? Through your brand? Which characteristics of those segments need to be superior in order to support your main focus?
One of the strengths of your culture must be unwavering support for your brand’s differentiation. Does the vision of the brand permeate all the thinking done by the people who work in the organization? Do they get it? Do they dream it? Do they taste it? Do they hold each other accountable for making the brand live up to the vision? More important, do they evangelistically sell it?
Brand Definition: A brand is a promise wrapped in an experience—a consistent promise wrapped in a consistent experience.
It is imperative that you understand how your message is heard. A great way to bring clarity to your communication is to start with a promise that permeates everything you do.
So how do you speed up the brand-building effort? Simple, you must be ruthlessly consistent. Why? For two reasons. First, to stand out, you must carve out a place in the market, and you won’t do that if you’re spewing inconsistent, every changing, all-over-the-lot messages. You will just get lost in the clutter.
Second, after you carve out your space, you must prove—prove—to your customers that you deliver what you promise.
Confusion is not a sound marketing platform. Complexity in all forms slows down communication. Your goal is to sell your products’ intrinsic value. If it takes more than a few words and phrases to describe your [offerings], you have made it unnecessarily complicated. Make it easy and simple for the customer to say yes.
The clarity of your promise can produce great strength and separation in the marketplace, but only if you communicate consistently.
In our choice-filled world of noise and nonsense, the best way to make yourself important is to say something important and say it well. Reduce what you want to say to its essence. Let that essence shine throughout all your work. Simplify everything that gets in the way of clarity.
Consistency tests your resolve to be who you say you want to be in everything you do.
About the Authors
Charlie Hughes, co-author of BRANDING IRON, is one of the few men alive who has created a car company that's still in business. The New York native has worked for six automakers on eleven different brands that include Cadillac, AMC, Jeep, Fiat, Lancia, Ferrari, Porsche, Audi, Volkswagen, Range Rover, Land Rover, and Mazda. He headed three different automotive marketing groups and was CEO of two auto companies. As founder and CEO of Range Rover of North America, which became Land Rover North America, he built a car company from scratch, beginning in 1986 with an investment of $7.5 million. Eight years later, this had grown to a market value of $200,000,000. "In the car business, being head of Land Rover was like being the owner of a four acre ranch in Texas," Charlie told an interviewer, "But we built one of the strongest brands in the industry and had fun doing it. We were mavericks all the way." In 2000, Ford Motor Company hired Charlie as president and CEO of Mazda North American Operations. There, he revitalized the Mazda image and repositioned the brand in the crowded US market. When he arrived at Mazda, Charlie found a company with over $5 billion in sales but no profit. It was also lost in the marketplace. Mazda made a profit in his first year and a larger profit in his second—during the most cut-throat-discount market in modern memory. Today, Charlie heads a marketing consulting consortium, Brand Rules. As its founding president, he describes the firm's mission simply: "In an over-branded marketplace, we help you learn what sets you and your company apart…and how to cut yourself out of the herd."
Mississippi native William
Jeanes, co-author of BRANDING IRON, has spent the last three decades
closely associated with the auto industry. A graduate of Millsaps
College and a former Lieutenant in the US Navy, his first writing job
was as feature editor at Car and Driver. After three years at C/D, he
left to become a copywriter at Campbell-Ewald (Chevrolet's ad agency).
He became an associate creative director and after two years moved to
SSC&B:Lintas in New York (now Lowe & Partners). He remained
there for five years, becoming a senior vice president and gained
experience in packaged goods advertising and marketing. In 1982, he
moved to J. Walter Thompson/Detroit as a senior vice president and
director of the Ford Division account. There, he learned first-hand the
research, marketing, and advertising decision-making processes at a
major auto company. He quit JWT in 1985 and returned to writing. His
writing has appeared in a score of the world's automotive publications
and in Sports Illustrated, American Heritage, Smithsonian Air &
Space, Playboy, Parade, and The New York Times. In 1987, he became
editor-in-chief of Car and Driver. He led C/D to a million-plus
circulation and made it the envy of the industry. During his six years
as editor, he appeared regularly on “CBS This Morning” as its automotive
expert, and his radio commentary on Detroit’s WJR reached 19 states
each week. In 1993, he became a senior vice president and group
publisher at Hachette Filipacchi Magazines. Despite rising revenues,
William forsook publishing to become the founding editor of Classic
Automobile Register. Later, at American Media, he founded Auto World
Weekly, the first US automotive magazine aimed directly at new-vehicle
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