I recently went to Korea on vacation, attempting to disconnect from marketing for just a bit. Little did I know, it would turn into a mini-site inspection directly related to our latest CMO Council report, Protection From Brand Infection. As any good tour operator would do, our guide would drop us off at various stores and sites. On one of these stops, I had the opportunity to view a lovely selection of jewelry. There were butterfly pendants, pearl flowers, even a bumble bee pin. And then, there in the $25 dollar rack, was a pair of Dior logo ear rings. (see the photo of these classy gems!)

Now, I SERIOUSLY doubt that the esteemed house of Dior selected the roadside tourist trap as their latest retail outlet. I doubt even more that designer John Galliano envisioned the Dior moniker to be housed side by side with a kitty swatting at a jewel encrusted mouse. Yet there they were, in close proximity to bootleg copies of the movie “Bride Wars” complete with bad Korean voice-overs.

By now, you’ve probably had the chance to download the Brand Protection report, and if you haven’t I strongly urge you to now. While the hallmark of any CMO Council report is the peer-led insights provided by both detailed data findings and in-depth interviews, this report contains an overwhelming number of first-hand peer best practice dialogs that you are sure to find useful.

And if you haven’t hit the point of information saturation, you should know about all of the ways to stay up-to-date on any number of marketing issues. We Twitter. We bit the Web 2.0 bullet and took to the twitterverse! From consumer insights on Loyalty (www.twitter.com/loyaltyleaders) to your favorite CMO Council staffer (www.twitter.com/lizmiller) to the CMO Council official twitter (www.twitter.com/cmocouncil), we are all online, chatting away.

We are also launching a new initiative focused on the marketing supply chain, the Marketing Supply Chain Institute. Our first area of focus is that vast overhead line item, marketing consumables. From how you manage vendors to how you warehouse and store sales documents and promotional items, Define Where You Streamline will serve as the benchmark for marketing consumables supply chain management. Visit www.marketingsupplychain.org for more.

As we head into summer, mark your calendars for three events that take the CMO Council on the road: June 17 (Los Angeles) and June 28 (Chicago) are the dates for our latest dinner dialog series focused on retention and customer engagement. We will be delving into the challenges and rewards from master data management programs and hear best practices and lessons learned from peers. On July 8 we will be in London talking about the power of personalization within the telecommunications industry, as we host a dinner gathering of the Customer Experience Board with our partners, AMDOCS. If you are interested in attending these vents, please contact us immediately as space is limited.

Until next month,

Liz Miller
VP, Programs & Operations
CMO Council

In the Age of Conversational Marketing and Multi-Channel Interaction, How Influential are Ad Agencies?

By Donovan Neale-May, Executive Director, CMO Council

Relevant and dynamic content creation, personalized multi-channel delivery and new levels of market engagement have become critical to creating lasting, profitable and loyal customer relationships. What are the major shifts and trends?

1. Agencies are struggling to evolve as marketing and traditional media go digital in all areas of operation, campaign execution and audience activation.
2. There is a power shift from master agency control of accounts to a more digitally empowered client with new partner and provider connections and resources.
3. The advent of informal, viral and mobile device-driven developing nation markets is straining and testing traditional agency capabilities and client relationships.

Why are clients embracing technology solutions and new digital marketing platforms?

• Management mandates for greater performance, accountability, visibility and yield in marketing organizations
• Demand for deeper analytics and predictive modeling to improve customer economics and lifetime value
• Greater access to customer data, insight and intelligence allowing better segmentation, targeting, personalization and efficiency of spend
• Higher response and recall rates from customized communications improving ROI and driving customer loyalty and advocacy
• End-to-end measurement and tracking of campaign effectiveness requires robust, agile, real-time, on-demand marketing automation infrastructures
• New channels and avenues of market access and engagement are digitally driven including mobile, Internet, social media, online communities, search portals, digital signage networks, point-of-sale output and display systems, etc.

What’s influencing the power shift in agency-client relationships?

• New hybrid demand generation service providers and consumer-powered, experiential marketing models are taking greater share of marketing spend.
• It’s a web-centric world, which allows marketers to build their own channels of insight, access and influence, rather than paying to reach third-party, controlled audiences.
• Continuous production, packaging, delivery and tracking of fresh, relevant multimedia Web content requires new skills, technologies and management systems not provided by traditional agencies.
• Customer data integration (CDI) is the new marketing mantra as marketers strive to own the customer experience, improve listening and feedback, retain and grow relationships, and deliver more market-ready products and services.

Are global agencies the right partners for highly localized marketing in unstructured, emerging growth economies?

• Emerging markets have a vast range of religious, cultural, tribal, ethnic and socioeconomic variations that don’t fit with the mass media-driven agency model. They also lack formal market structures, pricing policies, service standards, media channels and distribution practices, making each country unique and different.
• Localization (products, documentation, marketing consumables, campaign creative, communications, etc.) is challenging, fraught with problems and nuances, as well as tough to do centrally. Knowledgeable, connected, on-the-ground resources are critical to localization effectiveness. Unfortunately, uniform marketing talent and resources are hard to find in large agency networks.
• Uniform branding and consistent messaging have many obstacles and barriers considering the viral nature of community markets, fragmented state of media channels, and informal nature of township/village markets and merchant channels.
• Mobile messaging and communications are often critical to market notification, conversation, conversion, transaction and adoption. Not an area of specialty for most ad agencies.
• Targeted and tailored grassroots marketing programs that leverage the universal appeal and resonance of sports, music, fashion and entertainment tend to be powerful ways to connect with under-developed markets. A far cry from the cost-effectiveness, efficiency and control of print and electronic media campaigns.

Innovation, but What Kind of Innovation?

By Ted Mininni

Innovation is generally a good thing. Hundreds of books, magazine articles and web pages have been dedicated to the topic. Without innovation, new products and services would not be possible. Innovation has pushed design to higher levels and resulted in making life better, more convenient, safer. It continually adds value to products.

Innovation and new products are the lifeblood of consumer product companies. Without it, brands max out the sales potential of existing products, and risk becoming stale and passé over time. Unless new products are constantly in the pipeline and existing products innovated, brands run the risk of being upstaged by competitors, as well.

However, there are times when the push for constant innovation can lead consumer product companies astray. Some well-planned, well-executed ideas have been a bust in spite of or rather because of the fact they represented some kind of “innovation”.

Companies always seem to be tweaking even great-selling products. How many packages have consumers seen touting that the products within are “new and improved”? How many times have consumers purchased a favorite commodity and found no appreciable difference from what they’d grown accustomed to and like? They continue buying the product perplexed at how the company can claim innovation has taken place. Conversely, how many times do consumers encounter such a drastically different product, they became disappointed and vow never to purchase it again?

Sometimes the best thing companies can do is leave their flagship products alone. That is, resist the very human inclination to tinker. Remember when Coca Cola launched its “New Coke”, thinking it would retire its original formula? That mistake cost the company dearly. Coke saved face by reintroducing its signature product as “Classic Coke”, but the company learned a valuable lesson after consumer approval and sales plummeted.

When Apple decided to capitalize on the popularity of the Mac by introducing the Macintosh Portable Computer, the company that “could” came up with a bona fide failure. It was cumbersome, weighing over 15 pounds, slow and came with a $6500 price tag. Consumers voted “no” with their wallets, as they always do.

But in this case, the debacle led Apple to design its PowerBook laptop, which is still a consumer favorite; setting an industry standard for product excellence in the bargain. It takes guts for a company to admit a mistake and turn failure into success. That’s why brand Apple is associated with “success”, even though some of its initial product launches have been failures.

Starbucks staggering expansion over the past few years led to some management decisions that have come back to haunt the company. The decision to cut down on the preparation time—and romance--involved in creating its divine caffeinated concoctions led to a sharp decline in volume. Consumers responded in a loud, clear manner: they didn’t mind paying more as long as the baristas’ careful custom crafting added to their experience. This was the most important value component of the Starbucks brand and diluting it led to a precipitous decline.

Even leaving iconic products alone but revitalizing packaging can create consumer disconnects. When Tropicana recently contemporized its OJ packaging, consumer outcry was loud and immediate. The redesign disregarded Tropicana’s heritage brand assets. The “straw punctured orange” mnemonic device conveying “100 % real orange juice” disappeared and along with it, the wholesome, nurturing, approachable persona conveyed by the previous design. From a functional standpoint, it became very difficult for consumers to find their favorite Tropicana variety.

After spending millions of dollars to repackage, Tropicana announced it would reinstate its heritage packaging—scrapping its new packaging that had been in distribution for a scant month or two. Rather than a total package innovation, Tropicana would have been wise to contemporize slightly, making sure its “ownable” brand assets were left intact.

There are heritage products that consumers have always liked just as they are. No innovation required. Smart companies ought to consider that, especially if their product has become a basic commodity to legions of consumers.

Rather than tinkering with success, and trying to innovate the product or its packaging, how about innovating messaging instead? When a product is straight-forward, pure and simple, why not tout it? Why not tap into the prevailing consumer mood and current consumer climate to reinforce the fact they can continue to trust the simple goodness of products that have always brought them enjoyment?

Right now, the hottest trend in food and beverage marketing is all about promoting “simplicity”—that is, a handful of preferably healthy ingredients—in a highly transparent manner on packaging and in advertising. In a complex and complicated world, this concept taps into a very deep desire among consumers.

Kudos to Post Shredded Wheat’s brand managers who get this. Their product is and always has been, natural and simple. It’s a heritage product, made from 100% whole grain wheat. It has been for 117 years. A new marketing campaign orchestrated by Ogilvy, featuring the tagline: “We Put the ‘No’ in Innovation” is simply brilliant.

Face it: consumers are hungry for simplicity, and back-to-basics goodness. Post is tapping into this with its new messaging. New messaging is the right kind of innovation these times call for. New messaging might be better than dusting off nostalgic old taglines and ad spots to re-air and many CPG companies are giving in to the temptation to do this, of late. While consumers are yearning for simpler, more secure times, new messaging points to the future, not the past which none of us can return to.

Marketers: stop and think. Is product innovation what’s really needed right now? Will innovation of your heritage product and brand lead to desired, projected results or will it lead to consumer disconnects? If you already have a great product and packaging the consumer continues to connect with, then maybe what you need to innovate is your messaging.

Ted Mininni is president of Design Force, Inc., the leading brand design consultancy to consumer product companies with Enjoyment Brands™. www.designforceinc.com.