Most of the participants were back from their break, and in campus by Tuesday night; the weather gods have not been smiling and it has been cloudy and raining almost all of Tuesday; and Wednesday morning was not different - makes me wonder whether this is the beginning of the end of good weather in Cambridge ! I hope not.
Since most participants would not have had the time to read the cases, today was a light days - though there was three classes. One each on Marketing, Organizational power play and Financials.
Prof. Quelch, did a brief summary of what we have discussed in class till date on Marketing. We have discussed different cases on three aspects of branding:
- Brand positioning : here we discussed the case of Volkswagen
- Brand building : here we discussed the case of Lenovo
- Brand stretching and managing brand portfolios : here we discussed Colgate
When we think of our brand, we should also spend some time understanding from the customers' viewpoint. She will be thinking the following:
What has the brand done for me ?
Plus
What the brand thinks of me ?
Plus
What the brand promises to do for me ?
In most market research analysis, the second question above is rarely asked. This is one reason, why even in any internal discussions, we should not be giving any customer segments in a derogatory manner. If you are a customer of a brand, just imagine how you will feel, if you come to know that the brand manager has segmented you as "bottom feeders" !
We also briefly talked about brand stretching, which can be done either horizontally (related categories) or vertically (price points, channels). Brand architecture needs to be clearly thought through and it can be : House of brands (P&G, GM), Mixed Branding ( VW, RBS) or Corporate Branding (Microsoft, HSBC). The brand architecture must be consistent world wide
The CEO's role in branding is very crucial. His/her vision and the brand meaning must converge. Brand is a precious asset, it forms the majority of the non-tangible asset value of the organization and any damage to the brand is a high risk - all this means that the CMO and CEO should work very closely together - and the CEO must not delegate the brand.
The case today was the Spanish Football team - Real Madrid. Which transformed itself from a conservative local club to a big global brand - where football is only one part, with others being merchandising, club membership, sponsorships, real estate, stadiums, TV rights, etc. In effect, they were changing and trying to serve two customer segments - the fans and the casual spenders. These two segments can be characterised as follows:
- Fans : Football focus, family/team, The Club, Core values
- Casual spenders : Entertainment focus, Individual, The celebrity player, Merchandise
Whenever we talk of change of strategy or positioning, the dilemma is this: "holding on blindly to the past" versus "change or die". The more successful the previous strategy is, the difficult this decision to change will be. Jack Welch made this famous statement, which I think is very profound: " Any one can manage for the long term and any one can manage for the short term; but very few can manage for the short term and long term".
The second case was on the ugly side of organization culture - the case of British Steel. Where power, politics and manipulative people were in action. Incidentally, this was a video case - and the video was shot by a TV producers and shown on TV in UK. Basically, there are three ways to get things done:
- By giving an order - because you are the boss
- By the organization culture and vision
- By raw power and influence
This example was the third category - where a passionate engineering manager, manipulates people and through his power get things done. No analysis, no data - just "fact free" decision making. Remember that the setting in this case in 1975. Today, probably we have moved to a more data driven approach - though some would argue that such people in todays' organization will still drive towards a decision and then look for supporting data !
We again spent some time discussing culture, the role it plays in shaping organizations and the role of leadership in building a strong culture organization. The following picture nicely captures the essence - notice the role of senior leadership in all aspects except "selection". And that itself poses a challenge as many people could be involved in the selection process and you have to ensure that they understand the importance of culture match.
Sometimes it may be good to do a culture diagnosis within organizations. The three things to look for will be:
- What are the values that are critical in order to execute the strategy ?
- For each value, what are the norms (expectations about specific attitudes and behaviors) that are important for people to share ?
- For each norm, what are the levers that you can use to reinforce these specific attitudes and behaviors ?
The last session was a lecture by Prof. Fruhan on linking together profitability, cash flows, capital cost, growth and stock value !
The pace picks up again from tomorrow, as we go back to discussing three cases every day. Hopefully, the weather clears up by tomorrow . More later ...
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